Hypocrisy Unbridled

by Stephen Fleischman

I learned my first lesson in capitalism when I was a kid during the Great Depression of the 1930s. (Yes, I was a teenager in 1933)

In our living room, we had only one electric light bulb. It hung down from the middle of the ceiling on an electric wire. My father insisted that when you left the room, even for a short while, you turned off the light. You don’t waste electricity.

Every so often the bulb would blow out and have to be replaced. It was common belief, at the time, that the manufacturers could make an electric light bulb that would never blow out, but they wouldn’t do that because they wanted to keep selling light bulbs. We believed that was true of other items as well. That’s how capitalism worked.

I now know that it was called “planned obsolescence” and it was a well known and accepted tenet of capitalist marketing.

We’re coming to the end of the road, now.

See where planned obsolescence has taken General Motors. It is one of the nation’s iconic corporations that practiced it.

This was true of the auto industry in general. The new models appeared yearly, most of the time with nothing but cosmetic changes. The American consumer was programmed. A trade-in every year or two or three was “de rigueur”, but when foreign cars started penetrating the American market, Mercedes, BMWs, Toyotas, Hondas, the American consumer wised up. Here were better products that lasted longer.

In later years, I learned other lessons about the contradictions of capitalism and the path it must take to its own destruction.

Going back to Adam Smith, the concept that the “invisible hand” of the free market would keep the capitalist economy in balance has been the conventional wisdom. Capitalism must grow or die. And grow it did. Mergers and acquisitions became the modus operandi as corporate enterprises struggled with their competitors to survive.

We have a world-wide economic system of monopoly capitalism, now, that is in a state of perpetual class struggle—capital vs. labor –or bourgeoisie vs. proletariat, as Karl Marx put it. Within it, the contradictions are legion—in all aspects of life, even within the context of one politician’s speech.

Take this one, for example, that David Henderson of Econlog points out about the Obama health care speech to a joint session of Congress, last September 9th.

He’s for a public option and against it within a single speech.

“These private companies can’t fairly compete with the government,” the President said. “And they’d be right if taxpayers were subsidizing this public insurance option.”

“But they won’t be,” Obama continued, “the public insurance option would have to be self-sufficient and rely on the premiums it collects.”

Then, two paragraphs later, he has “great concern” about how to pay for the government option. He states flatly that money will come out of Medicare and Medicaid. So, some of the money for a public option in the health care reform bill will come out of currently existing government health care programs. Is that a contradiction, or what!

Take Wall Street and Main Street. While the banks are making money again and bonuses are flying like hydrogen balloons, employment is dropping like a lead balloon. The government regulators are doing nothing about reinstating the Glass-Steagall Act of 1933 that established the Federal Deposit Insurance Corporation (FDIC) and separated commercial banks from investment banks. Like church and state, they don’t go together unless you want a gambling casino. Glass-Steagall staunched the bleeding and was pivotal in saving the financial system after the Great Depression.

By 1999, the Wall Street fat cats forgot everything they learned from that period. Apparently, they wanted a gambling casino. Provisions that prohibited a bank holding company from owning other financial companies were repealed on November 12th by the Gramm-Leach-Bliley Act—that’s Gramm as in Senator Phil Gramm, a practiced croupier at the craps table.

Wall Street went on a rampage, creating all kinds of financial gimmicks derived from derivatives you could bet on; things like packaged debt that they could bundle and sell in foreign markets and sub-prime mortgages that eventually put peoples’ homes under water.

This is what put our country into financial crisis in 2008 when we had to socialize the debt and privatize the perpetrators.

When we elected Barack Obama, we thought we were going to get change we could believe in. But Barack put the same old foxes into the chicken coop—Summers and Geithner, the ones who presided over the disaster to begin with.

Just another contradiction of Capitalism.

We are yet to see anything like Glass-Steagall reinstalled or anything that resembles it; any kind of robust regulation of the Wall Street gambling joint.

Just hold your breath and cross your fingers. Maybe the scales will fall away from eyes. That’s what scales usually do when truths become self-evident.

Beware the Predator

by Stephen Fleischman

Senator “Chuck” Grassley (R) Iowa, roiled up over the proposal for a public option in the health reform bill, called government a “predator not a competitor”.

Government has been called many names, good and bad. Predator. That’s a new one.

If Chuck feels that way about government, why doesn’t he get out of it? Resign from the Senate.

Government is a neutral thing. Government is simply the organization through which control or administration of a city or state is exercised. It is used in the service of the entire nation not for a few special interests.

The conventional wisdom is that government cannot operate as efficiently as private industry.

It’s a classic myth, the result of years, decades, even centuries of brainwashing. The propaganda of capitalism. Keep the notion of “public options”, government run programs, out of peoples’ minds. Demonize them as “socialism”.

After all, if the working class got the idea that they, through a socialized government, can manage the means of production as efficiently as the capitalists, they might decide to do just that.

Entrepreneurs don’t like to tackle that problem head on. They don’t attack government, per se. They attack “big government”.

“Big government is bad” –the common disparaging cliché.

The badness of big government is often raised when discretionary spending is being considered for some program to benefit the people. It signifies taxes and rich people don’t like to pay taxes. Let the middle and working classes pay them. Rich people favor tax cuts, remember? They loved George W. Bush for that.

The rich don’t mind discretionary spending for increases in the defense budget, for wars against small and weak countries that can’t fight back. This means big bucks for the arms makers and the parasitic corporations that thrive along with them.

We’ve amassed a 2 trillion dollar deficit on that kind of discretionary spending. But not one dime for a universal single-payer health care system. Medicare is like a bone stuck in the throat of the health insurance industry.

For some unexplainable reason, we, as a nation, must keep a totally useless gang of blood-sucking corporatists, called a health insurance industry, a thousand pound gorilla, on our backs.

Republicans have declared they will do anything to kill any health care reform legislation. Their cry is that the Democrats are trying to restructure one-sixth of the economy, “writing a bill that will affect almost every American, every business and every doctor and hospital in the country,” reports The New York Times. (10-4-09) The Democrats say the challenges are daunting.

True, the challenges are “daunting”. They might not be so daunting if we could elect a congress of honest people, legislators who can’t be bought off by the health insurance industry; legislators who represent us instead of them.

Hasn’t the government taken on daunting jobs before? How about Medicare and universal health care for all Congressmen and Senators?

And besides… what’s wrong with restructuring the economy. Isn’t it about time?

We should use San Francisco as a model.

Maria L. La Ganga reports in The Los Angeles Times (10.4.09) that over the last two years, three-quarters of San Francisco’s uninsured adults have been enrolled in a public program that guarantees access to medical care called “Healthy San Francisco”.

So far, more than 46,000 adults have been enrolled in this city-run universal health care plan, the first in the nation. It has received high marks in recent independent studies.

Patients receive preventive services and ongoing treatment for chronic conditions. Prescriptions are covered and so are hospital stays.

A unique feature of the plan, patients must pick a “medical home” out of a network of more than thirty public and private clinics, physicians groups and hospitals within the city limits. The idea is that patients get consistent care and the system avoids duplicating services. Kaiser Permanente, a major private HMO, just joined and plans to accept up to 3000 patients.

The program is funded in part by an employer mandate, a controversial component of the plans now under discussion in Washington for the federal health care reform bill.

San Francisco Mayor, Gavin Newsom, described the program as “a public option”, “a strategy to provide health care regardless of your ability to pay, regardless of any pre-existing conditions”.

The city’s plan is government run and subsidized—a “public option”—and has not caused workers or employers to bail out of private insurance, another lesson for the national debate.

It might be a good idea for Chuck Grassley to drop everything, make a trip to San Francisco, and take a look at this predator. That might make him decide to resign from the Senate—or he may learn something that will help him complete a health care reform bill with a “public option” that will pass the House and Senate and be signed into law by President Barack Obama.