That there has been a class war in this country for thirty years against the middle class?

Henry C. K. Liu shows historically that this tussle between have's and have-not's has been going on almost since the beginning of the republic. Nothing new here, and the oppression since the New Deal is nowhere near as bad as it was prior to it — not to excuse what's going down now.

THE SHAPE OF US POPULISM, Part 1: A rich free-market legacy - for some

THE SHAPE OF US POPULISM, Part 2: Long-term effects of the Civil War

I've been flogging this recently because it seems to me that it very important for the people to realize just how the robber barons manage this rip-off through political and economic means.

What Liu shows is that almost from the get-go, democracy has been hijacked by a plutocratic oligarchy. The history of the US is the dialectically interplay of the dominant forces of "free market" capitalism (economic liberalism) in relation to the rest of the country (populism), pitting the rentiers, financial sector, and large corporations aginst the small business people and entrepreneurs, farmers, and workers. The economic and class warfare is conducted primarily by powerful interests, often behind the scenes in smoke-filled rooms and exclusive clubs, but also often quite violently in the open through private security forces, e.g., Pinkerton.

The Democratic politicians either do not understand this or else are in league with the plutocratic oligarchy, or a little of both. Unless the people wake up soon, more wool is just going to be pulled over their eyes again. There are no good options out there in the political arena right now.

Unless there are fundamental changes made, the system will not change. The pseudo-solutions proposed by the Dems will not work, and then eventually things will swing back to the right again for another round of rip-offs. The way of the system is rigged now, it's like gambling against the house with their loaded dice and marked cards. When the greed gets too out of hand, like now, the house is forced to give back a few chips, but not to change the game itself.

Socialism has never been very popular or successful in the US because Americans are traditionally wired differently. However, that doesn't mean we need to cave to an economic liberalism that is loaded against the small business person, entrepreneur, the self-employed, the small farmers and the workers. It's just that we need to get the lead out of the dice and the marks off the cards to level the playing field so that we are all competing on an equal footing.

i've been doing a lot of reading recently, in the small amounts of free time i can eke away from med school, about the federalist/antifederalist debates and the early years of the republic. american class warfare is even older than the gilded age of molly maguires and pinkerton gun thugs. shays rebellion (western mass, 1786-7) saw small farmers in western massachussetts taking up arms against the wealthy merchants and large farmers. the upper classes in mass were, of course, doing very well after throwing off the yoke of british control and taxation. meanwhile, they controlled the state apparatus, and ensured that the costs of the revolution would be payed by small farmers. so the small farmers got pissed, attacked springfield, and were dispersed by a poorly-paid militia supporting the state government.

the constitution was written mainly by the Federalists, representatives of the large farmers and especially merchants who held political control at the birth of the US. they wrote the constitution to dilute the will of the electorate, allowing 'the People' only to give their consent and to vote for which member of the elite would govern them. it was not intended to be democratic - the federalist papers are very explicit that political power is too important to be entrusted to actual people. (side note: the federalist fear of 'faction' is a direct ancestor of today's post-partisan rhetoric.) the american state apparatus and 'system' have, from the very beginning, been used as instruments of class warfare.

i haven't read liu, but i'd disagree with the statement "almost from the get-go, democracy has been hijacked by a plutocratic oligarchy." in my reading and thinking (mostly my reading about others' thinking), american government was established in a purposefully undemocratic system, by a plutocratic oligarchy. there was no golden age of democratic egalitarianism.

(N.B. the original american debates are relevant only to political elites vs. propertied non-elites; it doesn't even address the disempowerment of non-whites, women, or the property-less.)

The US was formed as far more democratic than anything else out there at the time. If the (capital-F) Federalists had had their way, it would have been only rhetorically more democratic (Hamilton wanted President For Life).

Ben Franklin was a genuine radical (although, like a lot of radicals, it's difficult to make him fit into any one camp). Jefferson was rich and part of the elites, but pretty damn progressive in a lot of ways. And he pretty much turned Madison (a Federalist) into an undecided.

Human rights started with the Magna Carta, which applied only to the gentry. The concept has spread, albeit very, very slowly. Even if the founding fathers failed to match their rhetoric, they advanced the cause. Shay's rebellion is a case where they were called on their rhetoric. Shay lost the battle, but it wasn't all that long before that particular battle no longer needed fighting. Maybe by the millenial anniversary of the Magna Carta, it will actually apply everywhere.

you seem much more familiar with this than me - i'm still making up for the deficits in my college education. i did get a little carried away. the founding fathers were general radicals, and i fail when i try to imagine what it was like to create a brand new style of republican government.

my point was that it wasn't really democratic. the federalists, whom (this is definitely debatable) i'll hold to have pretty much kicked ass in the constitutional convention, were very actively concerned with limiting the direct democratic activity of citizens. i think
Federalist 10 explains a lot of this, although i don't have the Papers in front of me. in allowing for elections with broader suffrage than for the english parliament, they gave the citizenry more power than in any previous form of government since rome, if not athens. but they very consciously entrusted the duty of governing to a ruling class of enlightened legislators, i.e. themselves, who would keep the population's best interests in mind and would steer clear of factionalism and parochialism. from the beginning, they set the educated economic elite up as the political elite, and this played out in their governing policies. their rhetoric, as you point out, was ahead of their actions.

the most interesting thing about this period, as i learn more about it, is how closely it matches today - both in the post-partisan arguments, and in the rhetoric about 'freedom' and 'democracy' being so far ahead of any real policy.

I should like to interject the notion that the US is being moved by a financial elite that reminds one of what one reads about the elite in China, to wit, where roughly a mere 55,000 call the shots. I did not believe it could happen so fast here, but the mechanics of this are rather startling.

We could use a Shay's rebellion here. For there is no longer a market, as portrayed by the rhetoric on CNBC. SP recently somewhere alluded to 'pitchforks'. Anything to put some air in American soil.

http://mauberly.blogspot.com/

30 years ago marks an important turning point and a lot of things changed. Sure, class warfare is as old as humanity (read your Marx, folks) but that doesn't mean there aren't different periods in it. I fully intend to keep using the 30 year meme, because it is both accurate enough, and more politically useful than "they've always been doing it" because 30 to 50 years is within people's memory - people remember thier parent's generation or grandparents being better of than them and having more opportunity than them.

And they resent the hell out of it.

During the 1980 Reagan-Carter contest, Carter warned that Reagan's polices would increase the difference between haves and have-nots.

I know: DUH.

It tends to become real when people get off Prozac, for some reason. We may see more and more of those cases...

Will be to protect them.

It's how technological innovation being used. Bucky Fuller made the case in one of his early books, Nine Chains to the Moon, that there was enough for everyone on Earth to live in a utopia. He calculated the available energy units for production in relation to population and resources. Then, he examined how the energy and resources were actually deployed and discovered that about 90% was being allocated to military or related uses. In virtually all cases, military expenditures are related to either advancing the agenda of elites or protecting their interests, often against their own people.

Things haven't changed much since then. The world has seen remarkable technological advances since that time, and they have been largely harnessed by the military-corporatist-industrial complexes of the developed nations at the expense of the bulk of the world's population, when they haven't actually been turned against the people.

Given technological advances and available resources, there is plenty to go around for everyone if it were allocated in a sane and equitable way. Oil and nuclear would not be needed as primary energy sources, for example, if existing decentralized solutions were deployed. However, it is more profitable for the few to continue down a path that is threatening the existence of civilization itself.

I hardly think it is class warfare to oppose this insanity, based on incredible stupidity and greed. So-called free market capitalism is based on the notion that the unbridled pursuit of self-interest in an invisible hand that best allocates the use of capital and resources, favoring efficiency and effectiveness. This is a huge assumption that does not seem to be borne out by facts.

Self-interest is not necessarily enlightened self-interest, and the market is hardly free when a powerful elite — Fuller called them the great pirates — can capture a disproportionate share by skimming the cream off the top and externalizing (socializing) expenses and liabilities, due to the way the lines are drawn. As it turns out powerful elites pursuing their own self-interest as a class act parasitically on societies, eventually destroying them. This has been the fate of every great civilization of the past, and we are now witnessing the decline of the American Empire because of it.

"The rich will live in the tiny community of Israel while the majority live a Palestinian existence". When it becomes global? Not for long. They can only do that as long as their supply regions are unaffected - safe, secure and quite likely ignorant of the injustice they are perpetuating. You know, the part the US plays in relation to Israel.

If we nationalize the banking and monetary process, its profits would be public income, not skimmed off.

In a plutocratic oligarchy, nationalization just hands the whole ball of wax to the ruling elite who control the system and manipulate it for their own self-interest.

The best answer in my view is the decentralization — see A Pattern Language — necessary to create a truly free market on which there is a level playing field. Only then can the natural efficiency of the market operate. The so-called free market of economic liberalism is anything but free in this sense and leads inevitably to monopoly capital. So rules are necessary.

Advocating the efficiency of free markets doesn't mean that I am arguing for economic liberalism. The market does have to be tempered with public utility and harnessed for providing for the common good through rules. A good example of this the failure of markets to prevent externalization of costs, such as pollution, environmental degradation, and resource depletion. This has resulted in wholesale trashing of the commons — air, water, waterways, oceans, land, food supply, etc.

There needs to be a balance of market efficiency and social responsibility, enforced as necessary. This is called the third way, between economic liberalism and socialism. While I would prefer a more radical approach, this is a step that America could actually take after the election of Clinton or Obama.

Every system gets old and needs correcting eventually. That's the pendulum swinging between liberal social expansion and conservative civil consolidation. The irony here is that a strong social order is actually more conservative then liberal.
I do think there is a more fundamental conceptual issue that goes to the core of our essentially monotheistic paradigm. The absolute is basis, as in zero, not apex as in the singular point, so even a spiritual absolute, should you believe in one, would be the essence out of which we rise, not an ideal from which we fell. It just happens to be politically convenient to keep the populace focused on the point at the top and those occupying it, without drawing too much attention to the fact this perch rests on what's under it and not the other way around. This does start to get off topic, but the point still stands that growth is bottom up and not top down, so if we were to view the symbol of the community's wealth as a form of commons and not private property, the odds are that it will remain more widely distributed, not only because everyone would feel they had some rights, but controlling excess amount would entailextra responsibilities.
The fact is that much of the economy does work well as private enterprise, since it does place responsibility with those in control. Since this has been overdone, the pendulum is going to swing back the other direction, toward more regulation, but what I think is that if the medium of exchange were viewed as public proerty, it would reduce the need for regulation, since the benefit of accumulating currency is reduced and long term benefits would accrue to doing a good job in the first place.

This does start to get off topic,

Not off topic at all. I think this is the crux of the issue. The problem the US is facing is neither economic or political in essence but rather spiritual, in the sense of holistic — horizontal and vertical. The ideals of the country have been perverted by narrow self-interest so that the holism of enlightened self-interest promoting the common good and vice versa has been lost.

We need to get back to this core ideal of on which the US was founded. This is the ideal expressed in the Declaration of Independence, and the preamble to the Constitution, which documents were in turn based on the philosophy leading to the Enlightenment. In the meantime, the US has gotten sandbagged by the old-time religion, which has been co-opted by the ruling elite. As a result spirituality as holism has been eclipsed by self-interest in the name of the Protestant work ethic.

Humanity has come a long way since then, but the best thinking has not yet been incorporated. The solutions are already out there, but they have not yet bubbled to the fore, but remain in the background. As I mentioned above Bucky Fuller was dealing with these issues sixty years ago, and the universe of discourse among the so-called radicals of the Sixties was a lot more advanced than anything I am hearing now other than from a few of the intelligentsia and, of course, on the net. But its not yet in the streets again, let alone being a populist solution seriously being offered today.

For example, compare the platform of the miniscule Green Party to that of the Democratic Party, supposedly the party of the Left. The Dem platform is a lot closer to the platform of the GOP than the Green Platform. Until there is a major shift in the universe of discourse surrounding the economic and political problems associated with emerging globalization, the situation is going to remain Darwinian and Malthusian, expressed in terms of class warfare, instead of something like Theory Z organization or Dee Hock's chaordic management.

It's a long time from the perspective of our individual lives, but from that of history, it's less than 150 years since slavery was outlawed. In terms of genetic and sociological memory, it's an eyeblink.

Think of the last 40 years in terms of seasonal cycles. The passage from spring to winter is the evolution of aging. The passage from winter to spring is the revolution of regeneration. The old order is like winter crust, hard and decrepit. It isn't going to suddenly change, it's going to crumble as new growth pushes it out of the way. Bush has done a better job of breaking down the old order than any anarchist could ever imagine.

WHAT are the consequences of a world in which regulators rescue even the financial institutions whose recklessness and greed helped create the titanic credit mess we are in? Will the consequences be an even weaker currency, rampant inflation, a continuation of the slow bleed that we have witnessed at banks and brokerage firms for the past year?

Or all of the above?

Stick around, because we’ll soon find out. And it’s not going to be pretty.

Rescue Me: A Fed Bailout Crosses a Line

Also
F.D.R.’s Safety Net Gets a Big Stretch

The Fed's taking some flak over this.

wrote a strongly worded letter! Watch out! Maybe Ben Bernanke will be moved to tears, and Hank Paulson will fall to his knees since he's finally seen the light. After all, the Fed "Crossed the Line." Any more behavior like that and we might get the impression the Fed, Bear Stearns, and JP Morgan have no credibility, no standing, and no shame.

Someone might even take their white gloves off finger by finger and smack them across the face.

While I agree with you that most politicians and CEO's have no shame, the Fed chairman is somewhat different. He has no financial or political skin in the game, and his only stake is his reputation.

The Wizard of Bubbleland's rep is pretty much trashed now, and one would suspect that Ben doesn't relish the same fate.

Whether media criticism will sway him is another matter. But it's got a whole lot better chance than with someone like Hank the Hammer.

The Soviets found they couldn't create a better society by destroying individuality. We seem bent on finding that a better individual doesn't come at the expence of society. Gosh! There really are two sides to every coin, even though we can only see one at a time!

Bernanke was handed a poor hand. He has been more candid than obfuscatory--when compared with his predecessor, who put him--and us--in this position. But he is not immune to influence, even the same systematic, insidious, principle-deteriorating hackery that is the order of the day. Stocks going to go down precipitously? Whack 3/4 of a percent off the Fed funds rate before the markets open. Bear going down? Back 'em up with $200 billion in taxpayer-funded US treasuries.

Bear Stearns is not the only company in trouble. Bernanke will do anything to try to keep all of these actors on the stage. And he will do, and do so, and do so, and keep doing it, $200 billion or more at a clip, until the outrage makes the deals underlying all this untenable. He's not fixing the problems, he's diffusing them--killing the dollar, creating hyperinflation, creating all sorts of dislocations within the economy--to save a fucking brand name (take your pick: Bear, Citi, BoA), to save a class of people, to make sure this "didn't happen on his watch." But he's not only diffusing the problems, he's metastasizing them. To save a few of the big boys, he's bringing us all down. He's creating the instability. He's making the out-of-control spiral a generalized out-of-control spiral.

He has to go to extraordinary lengths to keep Bear Stearns running, and this means extending the discount window to a non-member and invoking a 1930s practice to do so. Is the game just helping the rich who caused this problem? I don't think so. I think the game is much more serious than that; it's helping Citibank, USB, BOA and so many others survive. What he must see coming down the road is not hyperinflation, but deflation. It's already here in the housing market and its power to destroy the economy is both frightening and now palpable.

The other practical thing he sees is that the banks simply don't have the capital to survive too many more big hits. For example, if all the homeowners who are upside down in their mortgages return their homes to the banks via foreclosure, the entire banking system in the U.S. is wiped out. There simply isn't enough equity. Not all homeowners will do that, of course, but the dollar value of upside down mortgages can easily double by the end of this year.

What's at stake is the global collapse of banking and credit, caused largely by Wall Street financial securitization, which the Fed doesn't even regulate or control. Hence the need to bring Bear Stearns in under the umbrella now.

Of course, when Lehman or Goldman or the next house falls, will he do it again? Probably, until even the Fed runs out of balance sheet to nationalize so many banks. Then he will turn to the Congress for a cash infusion to keep the game going.

We're right where you said this could go, 4+ years ago. We've probably got a trillion dollars of bank capital in the process of imploding and the Fed will have to fund the system, with the Congress on board.

If it puts people in prison later, that's fine with me. A lot of them need to be there. That will be one test whether it is simply bailing out the big boys: will it hold them accountable later?

http://mauberly.blogspot.com/

then deflation. I agree. Wasn't sure if we'd get hyperinflation or deflation, but it's looking like deflation.

Though, Bernanke could still run the presses really really hot. We'll see.

Bloomberg, By Elliot Blair Smith, March 16

With Bear Stearns Cos.' temporary rescue in place, the $200 billion subprime crisis joins the history of government bailouts to preserve jobs, homes and savings when economic disaster looms.

Ever since Treasury Secretary William Gibbs McAdoo shut the New York Stock Exchange for four months in 1914, to prevent foreign investors from cashing out and throwing the U.S. into financial chaos at the outset of World War I, American policy makers routinely have suspended their support for free markets when confronted by economic peril.

``I think the systemic risks dominate right now, which means you've got to put your finger in the dike,'' says William Silber, a finance professor at New York University's Stern School of Business. He is the author of ``When Washington Shut Down Wall Street: The Great Financial Crisis of 1914 and the Origins of America's Monetary Supremacy'' (Princeton University Press, 232 pages, $27.95).

Bailouts can buy time while policy makers try to defuse panic. Last week, the Federal Reserve Bank of New York provided financial support for Bear Stearns, the fifth-largest U.S. securities firm. It faced eroding investor confidence in the fallout from losses related to securities based on mortgages to the least creditworthy borrowers.