Slouching towards neofeudalism

(9 am. – promoted by ek hornbeck)

  The financial crisis that grips our nation’s states and cities has a malicious source, and Governor Tim Pawlenty recently named that source: public school teachers.

 “It used to be that public employees were underpaid and over-benefited. Now they are over-benefited and overpaid compared to their private-sector counterparts.”

 The school teacher, the policeman, the firefighter – these are now the faces of what is wrong with America today. It doesn’t matter that studies by the Bureau of Labor Statistics say otherwise, America can no longer afford their overpaid, middle-class salaries.

  At least that is what the right-wing media is telling us. Tea party members also want to see a drastic pay cut for the same people who teach their children. A familiar comment on the internet is, “I took a pay cut last year. Why shouldn’t they?”

  This attitude goes beyond schadenfreude and goes straight to the crabs in a bucket mentality. Strangely enough this attitude of “if I can’t have it, neither should you” only extends to working class people who live next door. For some reason none of the jealousy and malice is reserved for the people who actually broke the budgets of the states and cities, i.e. the people who deserve it.

  If you really want to know why the cities and states are so broke, then you must first ask yourself where all the money went. Was the firefighter down the street from you buying vacation yachts for his tropical island? Probably not.

  However, the guys on Wall Street who sold your school district, county, and state governments complicated financial derivative products are buying yachts for their tropical islands. Maybe we should start there instead.

 Detroit Mayor Dave Bing is struggling to save his city from fiscal calamity. Unemployment is at a record 28% and rising, while home prices have plunged 39% since 2007. The 66-year-old Bing, a former NBA all-star with the Detroit Pistons who took office 10 months ago, faces a $300 million budget deficit-and few ways to make up the difference.

  Against that bleak backdrop, Wall Street is squeezing one of America’s weakest cities for every penny it can. A few years ago, Detroit struck a derivatives deal with UBS (UBS) and other banks that allowed it to save more than $2 million a year in interest on $800 million worth of bonds. But the fine print carried a potentially devastating condition. If the city’s credit rating dropped, the banks could opt out of the deal and demand a sizable breakup fee. That’s precisely what happened in January: After years of fiscal trouble, Detroit saw its credit rating slashed to junk. Suddenly the sputtering Motor City was on the hook for a $400 million tab.

  What most often happened is that Wall Street rating agencies, the same agencies implicated in corrupt business practices, downgraded the municipal bonds, thus turning the the financial deals into an albatross for broke cities, but a profitable one for Wall Street.

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 Detroit is hardly alone. No state in the union has been spared the backlash of a one-sided financial deal that transferred public wealth to the already wealthy. Wall Street is raking in huge amounts of money from our broke cities and states at the worst possible time. The SEIU did a study which shows the country’s municipal governments losing $1.25 Billion just from these interest rate swap deals alone.

 “Elected officials are simply no match for the investment banker that’s selling the deal.”

 Yet in conservative political circles there is little blame directed at Wall Street. They would rather blame the guy picking up their garbage for his $45,000 a year wage, than they would denounce the investment banker who tricked their city government out of hundreds of millions of dollars. Can these people even do math?

  The logic of this attitude reminds me of someone who drives all the way across town to “save” a couple nickles on gas, while blindly shoving thousands of dollars into their 401k that someone they’ve never meet on Wall Street manages. Matt Taibbi wrote about this phenomenon last year.

 The setup always goes the other way: when the excesses of business interests and their political proteges in Washington leave the regular guy broke and screwed, the response is always for the lower and middle classes to split down the middle and find reasons to get pissed off not at their greedy bosses but at each other. That’s why even people like Beck’s audience, who I’d wager are mostly lower-income people, can’t imagine themselves protesting against the Wall Street barons who in actuality are the ones who fucked them over.

 Taibbi describes it as a “peasant mentality”. I agree. However, Taibbi doesn’t take the logical next step and tells us what it all means – neofeudalism.

 In 1958 John Kenneth Galbraith wrote The Affluent Society. It was a book far ahead of its time, and one of the first to use the term “neo-feudalism”. It dared to question traditional attitudes towards economics, and for that it was hated and shunned by wealthy conservatives.

 Inequality has been justified on many grounds, “principally noted for the absence of the most important reason, which is the simple unwillingness to give up what [the rich] have.” Equality has been argued to lead to uniformity and monotony (the rich sponsor the arts and education), redistribution has a musty association with godless communism, and the original Ricardian defense was that the present system was ultimately inevitable, and any attempt to change it would only lead to short-run inefficiency which would make everybody worse off.

 This attitude, that some amount of suffering is necessary in the current system, and that any major changes in it would be self-defeating, is what I call Sacrificing to the Volcano God. We have turned economics into a religion, where the mistakes are common, yet the fundamental assumptions it is based on is beyond question. Gaping flaws in logic are ignored, or even held up as unanswerable mysteries that laymen could never understand. When the Volcano God rains ash and lava upon us, it is because we angered the Volcano God with our sins of minimum wage laws, child labor laws, environmental regulations, and worker safety laws. More sacrifices are needed or the Volcano God will destroy us all.

  The High Priests of Economics never explain exactly how these sacrifices will fix the economy, nor do they mention that the sins in question might be their own. Yet we still rush to offer up our children’s futures through unpayable debts while never considering that there might be better alternatives.

“Jesus Christ is Free Trade, and Free Trade is Jesus Christ.”

– Dr. Robert Browning

 Like the Volcano God, nothing can stop globalization. There is no alternative.

  Besides, globalization is good. They tell us that it creates jobs, and you are expected to believe them even while you watch all the factories in your town close down and get sent overseas.

“Outsourcing is just a new way of doing international trade.”

– N. Gregory Mankiw, chairman of Bush’s Council of Economic Advisors

 This shouldn’t surprise anyone. David Ricardo, legendary economist and free-trade proponent, explained how this dynamic worked nearly two centuries ago.

“If instead of growing our own corn… we discover a new market from which we can supply ourselves… at a cheaper price, wages will fall and profits rise. The fall in the price of agricultural produce reduces the wages, not only of the laborer employed in cultivating the soil, but also of all those employed in commerce or manufacture.”

– David Ricardo, Des principes de l’economie politique et de l’impot, 1835

So you see, your wages are supposed to fall with free trade globalization. Those who worship the Volcano God knew this all along. They also knew that our manufacturing base was going to move south of the border when NAFTA was passed. They fail to differentiate between free trade and global labor arbitrage.

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  I never understood how the wealthy elite could think that the impoverishment of the working class could be a good thing until I ran across the story of Plutus the other day.

  Plutus, the God of Wealth, was blinded by Zeus so that he would be able to dispense his gifts without prejudice for things like need. When a couple citizens of Athens decide to give Plutus back his sight, the Goddess of Poverty intervenes. She tells them that she is the source of all progress in the world, and that if poverty was eliminated it would destroy civilization.

  That’s when I realized that the High Priests of Economics aren’t actually worshiping a Volcano God. They are worshiping the Goddess of Poverty.

“Thus you dare to maintain that Poverty is not the fount of all blessings!”

 – Goddess of Poverty, 388 B.C.

“In a little time [there will be] no middling sort.  We shall have a few, and but a very few Lords, and all the rest beggars.”

  -R.L. Bushman

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 Neofeudalism is a concept in which government policies are designed to systematically increase the wealth gap between rich and poor while increasing the power of the rich over the poor. It’s a party-neutral idea. There is no cabal pushing the plan, merely the sum effect of pressure from the wealthy elite.

  Those policies can be seen today. Just look at the fact that earned income are taxed at a higher rate than unearned income, and the repeal of the inheritance tax. Other ways are harder to measure but no less real, such as white collar criminals receiving slaps on the wrist, while the poor feel the full weight of the law. It’s a system with two sets of rules, one for the rich another one for the poor, and that is the definition of neofeudalism.

  Another manifestation of neofeudalism is the growing power of corporations, that leave the poor dependent on private interests more powerful than the government, a situation resembling traditional feudal society.

  Currently the top 1% of society own 40% of the nation’s wealth. The lower 50% of the nation have the mean assets worth less than $28,000. The richest 10% are worth, on average, 143 times that, or $3.976 million.

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Note the inverted relationship between marginal tax rates and wealth inequality in the charts above

 Despite this disparity, 80% of tea party members think that raising taxes on households making more than $250,000 to pay for universal health insurance is a bad idea. At the same time, 88% of tea party members think Obama, a president they despise, “favors the poor”, and 73% think that “providing benefits to the poor encourages them to remain poor”.

  Noam Chomsky in Hegemony or Survival had this to say:

 If working people depend on the stock market for their pensions, health care, and other means of survival, they have a stake in undermining their own interests: opposing wage increases, health and safety regulations, and other measures that might cut into profits that flow to the benefactors on whom they must rely, in a manner reminiscent of feudalism.

 Neofeudalism isn’t just about the powerful taking over everything. It’s about conditioning the poor to accept their designated role in society, even fighting to defend the ability of the wealthy to exploit them. It requires working people to do things that are against their own interests, and nowhere is this more true than in our current economic system.

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 How is it that we have a politico-economic system in which the government’s explicitly stated goal is to entice people to take out loans for houses and cars they don’t even need?  150 million cars on the road and we must keep buying new ones?  Millions of vacant housing units and we need to build new ones?  Homes so full of Chinese junk that half of it goes into off-site storage, and we need to shop more?  For whose benefit?

  Ever heard of debt-slavery?  How about feudalism?

 Here’s an even better word: peonage.

  It always amazed and confused me how everyone in America is obsessed with their credit rating. It’s almost as if people don’t realize that credit equals debt. Debt is something that people have feared for thousands of years, because unlike Americans today, historically debt was always associated with another scary term – slavery.

  Debt bondage, indentured servitude, slavery, they all mean the same thing. Yet somehow the establishment has convinced us that the ability to “manage” our slavery is something to be proud of. They even have a rating system for it.

 I’m not being facetious. Being heavily in debt means you don’t have the freedom to quit your job. People who have lost your job are unable to move because the enormous debt tied to homes they can no longer afford.

  Being tied to a piece of land is the definition of serfdom.

  Every once in a while our love for the wealthy elite who are exploiting us wanes. When that happens the American people need to be distracted. Perhaps it is incompetent terrorists in caves in faraway lands. Or maybe its poor immigrants who want low-paying jobs. One way or another there will always be a scapegoat, and we will need to declare war on them. As Taibbi put it:

 It’s a classic peasant mentality: going into fits of groveling and bowing whenever the master’s carriage rides by, then fuming against the Turks in Crimea or the Jews in the Pale or whoever after spending fifteen hard hours in the fields. You know you’re a peasant when you worship the very people who are right now, this minute, conning you and taking your shit. Whatever the master does, you’re on board. When you get frisky, he sticks a big cross in the middle of your village, and you spend the rest of your life praying to it with big googly eyes. Or he puts out newspapers full of innuendo about this or that faraway group and you immediately salute and rush off to join the hate squad. A good peasant is loyal, simpleminded, and full of misdirected anger.

 Welcome to 21st Century America.


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  1. I accidentally posted the start of this last night, long before I was finished with it. That’s why I deleted it.

      Sorry for the trouble.

  2. Fiscal policy (tax AND spending policy) has favored top incomes for far too long.  Instead of worrying about the size of the deficit we should be worried about how is benefiting from the deficit and whose wallet is getting lined.

    See, there is a reason why Republicans didn’t care about the deficit when they were in charge – because their policies favored the top incomes (“Trickle Down Economics”) and corporations (privatization of war + subsidies).  So, why should deficits matter now?  They only matter because people like Pete Peterson worry that the game may be over for them.  

    See one thing mainstream economists won’t tell you is that Gov’t Sector Deficits = Non-Gov’t Sector Savings (mostly private sector).  This means deficits help private sector with incomes and profits.  And when fiscal policy was controlled by neoliberals/conservatives those deficits helped who?

    Gov’t surpluses are the exception in history and will only serve to hurt working class Americans.

    It’s time to take back fiscal policy and make it work for all Americans.  First place to start is with a Job Guarantee Program.  

  3. 2.  That it will be worse than the last one.

    3.  That millions of people will be thrown out of work and there will be no lifeline.

    4.  That if it happens in October, Democrats will be thrown out of office in a wave, and then we will have a Republican Congress,

    5.  That in either event, nobody in the Federal government will have any idea what to do about a U6 unemployment rate that tops 30%

    6.  That if it happens in October, we will have a fascist government and response ….

    (It’s just a feeling .. but you heard it here first — (putting down marker)).

  4. For if leisure and security were enjoyed by all alike, the great mass of human beings who are normally stupefied by poverty would become literate and would learn to think for themselves; and when once they had done this, they would sooner or later realize that the privileged minority had no function, and they would sweep it away. In the long run, a hierarchical society was only possible on a basis of poverty and ignorance…

    “…Nor was it a satisfactory solution to keep the masses in poverty by restricting the output of goods. This happened to a great extent during the final phase of capitalism, roughly between 1920 and 1940. The economy of many countries was allowed to stagnate, land went out of cultivation, capital equipment was not added to, great blocks of the population were prevented from working and kept half alive by State charity. But this, too, entailed military weakness, and since the privations it inflicted were obviously unnecessary, it made opposition inevitable. The problem was how to keep the wheels of industry turning without increasing the real wealth of the world. Goods must be produced, but they must not be distributed. And in practice the only way of achieving this was by continuous warfare.

  5. By the early 90’s the trends were unmistakable and led to precisely the situation we are in now. Most people thought I was daft “but we are a democracy, they’d say.”

    One of the most important things to understand is that our “economy” is a political system. Fundamental notions in Anglo-Saxon economics are just plain wrong. There is no such thing, for example, as a “free market;” it’s like saying “free money.” A market is an exchange and it is never free and there are always costs. Whoever controls the policing of that market can control the outcome. The idea of “free-market economics” is a classic con, pure and simple.

    The problem of neofeudalism is not just about the rich tricking the poor. As you have pointed out in your excellent piece, the serfs want to be serfs and worship their masters. As long as they get their means of escape whether it is religion or pornography (and everything in-between). The poor and middle classes have decided to give up freedom for the sense of security a highly militarized and brutal set of rulers can provide. People want to believe that problems are solved by jail, torture, killing, repression, loss of civil liberties. It makes life simple. Do as you are told, turn on the TV and shut the fuck up. That’s what most people want now more than ever. I’m in the process of trying to find out why this is and why it was so easy for the oligarchs to colonize the minds of the people in this country (it is worse here by far than any other place on earth). Why would a people that pride themselves on “freedom” want to be slaves licking the jackboots of fascists? Why? What happened to us? How can Americans swagger (there are no people that swagger like us) yet be utter wimps hiding and crying when anybody looks like they want to fight? How do we explaing the cowardly reaction to 9/11? You junk the treasure of our country the U.S. Constitution so you can feel safe when there is really hardly any danger–and then you refuse to find out what really happened on 9/11 and with the anthrax attacks? How do we explain the way we fight our wars without honor. I’m sorry if I might offend veterans but there is no honor in blowing up homes and slaughtering women, children and old men — I don’t care if fighterrs are hiding behind them–the fact is as a warrior that it is shameful to kill the defenseless people–I would rather die than do what American soldiers seem ready to do on a daily basis.

  6. taken over by popular, puppet uprisings (fanned thru the same “channels” we know so well today) that will pass retroactive laws and vitiate contracts. I see a kind of political cannibalism, with federal and state policing authorities acting as necessary referees. Courts and legislatures will be intimidated. Money for the public good will very slowly evaporate (except in states that have fabulous natural resources to sell). Our federalist system will be challenged with Balkinization a real possibility.  

  7. Fuck” Program, AND

    I’ll tell people


    As an aside, since my teens in the 70’s, most of my work / school time has been focused on getting marketable skills to stay the fuck off of welfare, cuz, it sucks. Oh yeah, as another aside, financial aid also sucks. As another aside, instead of getting a populace grateful for these shitty fucking programs willing to break their asses for the en-noblement of the k-school nobles who throws us nothings crumbs like welfare and financial aid, you got a bunch of people who know the programs suck.

    So, in 1980 I’m a 20 year old 4 buck an hour, poli sci major drop out cook.  I can tell Raygun is a lying, stealing christo-fascist fuck – as is falwell and the rest of his merry band of scum. Aided and abetted by total shit Dem messaging, Raygun wins, and I feel – a lot of people, NOT me, deserve this piece of shit.

    A few years later I get the hell outta Holyoke, again, to Boston and $5.25 an hour cooking, living in Tip O’Neils district … and along comes ’84 and ’86 and Dud-kakis in ’88 and every time you spit you hit some ivy hot shot, or wannabee hot shot, who’ll tell you all the excuses for losing to lying fucking fascists … and … and …

    here I am 22 years later in career #3 and living in the state of wishy-warshy, pacified northwest, a member of 1 of the last big unions in the country or in our state,

    and … and … and …

    just like in 1980, there is only so much I can blame lying fucking fascist thieves, democrats who are political incompetents and democrats who are DLC sell out pieces of shit …………………..

    people gotta pull their heads outta their XBox NASCAR NBA NFL American Survivior Lost Assholes.

    IF you’re stupid enough to let people piss on your head,

    and tell you it is lemonade,

    THEN maybe you belong on your knees,

    licking it up like a subservient spineless sack of shit.


  8. I think that a lot in the younger generations (X, Y – are we at Z now?)  have gotten snookered by it.

  9. It has already come out, in advance of the Bilderberg meeting in Spain that engineered economic disaster is to continue for another year.

    Here is a rather large crowd of “normal” citizens in a modern day 21st century version of Roman Gladiator games.

    You should not however trust, especially radical moonbats such as myself.  Get your “news” from “credible” sources.

    But what actually has to be destroyed ultimately is America.  This myth of freedom just has to go, lost to the our true zero order violent species nature.  War follows long periods of relative peace.  Question is in what month do things really start devolving and how.

  10. because I have a brain in my head and do not buy into the ratings of debt, I have no debt to these assholes other then a mortgage which is through a local credit union/community bank. Of course they too must be beholden to the feds via Franny or Freddy crooks. You are of no use if you aren’t desperate or greedy.  They are the company store and only get you another day older and deeper in debt. The game we are supposed to play for the wealth and benefit of the gangsters who are now our duly elected officials.

    I never bought into the credit ratings join the suckers game never will. It is illogical to place your faith or your money in a system that whole purpose is ‘wealth creation’ for those who will kill or impoverish you in order to make a profit.They know no law other then their greed and numbers of growth of themselves. The government currently uses these as measures of our economy. It’s not our economy it’s our death rattle. So unhinged it is unbelievable that we the people when told to eat the poisonous cake just roll over and say how about some more and thank you for stopping the too big’s from wrecking your global takeover that saves us all from commies or the far left or teabaggers?      

  11. blaming GM’s Union Workers, for America’s economic problems.

    then Millionaire Tom, goes on to blame

    the uppity Workers in Greece,

    for that Country’s economic problems

    No Mention of those uppity Bankers though — Unbelievable!

    here’s the Right Wing Talking Points video, on GMA:

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