Volume 20, Number 12
Winter Soldier Campaign
Iraq veterans against the war -- Ivaw
Eighty and Still Protesting
Nut House Econ
Behind Burma's Repression
Nukes Are Back
Eleanor J. Bader
2 Book Reviews
U.S. & Eygpt
NOTE: Z Magazine subscribers and sustainers have access to all Z Magazine articles here and in the archive. The latest Z Magazine articles available to everyone are listed in the Free Articles box at the top of the table of contents, and are starred in the list below. Questions? e-mail Z Magazine Online.
Economics in the Nut House
GOP As Party of Budget Restraint; Efficient Markets; Privatization
In her August 4 piece in the Huffington Post, “Rove Exits With His Usual M.O.’s: Delusional and Deceptive,” Arianna Huffington offers as a major Rove delusion his notion that “by Bush wielding his veto pen in the upcoming budget fight, the GOP will restore its reputation on spending restraint.” Huffington asks how this can be when Bush has bloated the budget by 50 percent and has promoted a war that will cost over a trillion dollars? Huffington is wrong on this. She fails to recognize that in this militarized society that specializes in wars of choice, and with the establishment, including the media, highly protective of the military budget, the military budget is put into an entirely separate class whose expenses are acceptably open-ended and concern over waste and literal theft is muted. So the word “restraint” jars when talking about the military budget, and conveys intimations of disregard for “national security,” which is being protected as our armed forces fight pacification wars in Iraq and Afghanistan, threaten Iran, and stand guard in scores of bases across the globe.
The Democrats understand this and have internalized this double standard and regularly strive to show their mettle by urging more funding for the military establishment. And worried over the allegations of their spendthrift proclivities, the Demo- crats are reluctant to spend on civil society, with Bill Clinton notoriously using most of the small “peace dividend” after the fall of the Soviet Union to reduce the debt rather than “putting people first.” Reagan more than doubled the national debt in his terms of office and Clinton actually succeeded in balancing the budget and reducing the debt. But this has not made any difference as there remains the important difference: the Democrats still have a modest tendency to serve their mass voting constituency, whereas the Republicans are pretty reliable about screwing the general public while blowing wads on wars, tax cuts for the wealthy, and corporate welfare. But they show real restraint in serving the general community. The Democrats are com- peting hard on this, but so far the Republicans retain the edge in “restraint.”
The business community was thrilled when the Gingrich Republicans won the 1994 election because they recognized that this new gang would unreservedly serve their interests and run roughshod over the general public. Some of the corporate community representatives were quite open in explaining that however well Clinton had been doing on their behalf, Gingrich and company would do better on things like taxes, weakening of labor, corporate access to public property, and a halt to and rollback of environmental impediments to business. Clinton’s subsidy programs to high tech were nice “but don’t compare with the GOP plans to slash taxes and regulation and to put restrictions on law suits” (“Big Business Striking It Rich in GOP ‘Contract,’” Wall Street Journal, March 7, 1995). For these benefits, the business community will tolerate Republican deficits in a way they won’t with the Democrats. George W. Bush has, of course, done wonders for the business community, which is why deficits of staggering size that would have resulted in continuous business and corporate media indignation if produced by Democrats, and vast waste in military spending on wars and boondoggles, are tolerated (and why Bush gets away with steady evisceration of the Constitution and a pre-9/11 security failure that would have led to Clinton being impeached and driven out of office). This is an illustration of the higher irresponsibility of business as their short planning horizon and completely self-interested objectives make them into grab-and-run operatives.
Market ideology has taken some heavy blows in the last several decades. In Chicago School theory, corporate executives would be driven to support stockholder interests rather than their own narrow interests because executive looting would cause earnings and therefore stock prices to fall, which would activate the directors, stockholders, and the “market for corporate control.” That is, bad managers would be ousted by directors who were “agents” of the stockholders or by stockholders selling out to outside buyers who would come in and provide more efficient and non- looting management (the market for corporate control). Stock options would link managerial to stockholder interests as they would make stock price gains beneficial to both.
But in the critical theory of corporate control, dating back to A.A. Berle and Gardiner Means’s The Modern Corporation and Private Property (1932) and, even earlier, Thorstein Veblen’s Theory of Business Enterprise (1904), wide dispersion of stock and management domination of the proxy machinery gave managers effective control of the board and hence of policy; management was self-perpetuating and had a fair amount of discretion in nest-feathering. Veblen stressed how strategic position allowed the control group and bankers to manipulate and take advantage of “conjunctures”— economic disturbances, “excessive competition,” speculative booms, merger deals, and opportunities for “an alert redistribution of invest- ments from less to more gainful ventures”—to loot.
History has vindicated the critical perspectives. The spectacular rise in executive pay, very often quite unrelated (and sometimes inversely related) to corporate performance, the numerous scandals involving managerial looting via perks and excessive options with moveable or post-dated prices, merger activity that has once again been geared to ability to sell securities and reap large commissions, bought-out managers exiting with huge “golden parachutes,” with the taken-over company not better managed, but asset stripped, all show market forces failing to serve stockholders, let alone the larger community. Somehow boards of directors rarely become independent of the management and serve as effective agents of the shareholders, and the shareholders remain inactive or, if truly unhappy, follow the “Wall Street Rule” (i.e., sell the stock), as recognized by Berle and Means, Veblen and my own updating analysis of Berle and Means (Corporate Control, Corporate Power, 1981). Scandals continue to produce weak reforms with loopholes and a dependency on vigorous enforcement that fades quickly as memory recedes, market power grows, and in recent years business domination and deregulation ideology make regulation a do-nothing or corporate protective facade.
The dot-com and housing bubbles have also shown that markets continue to move out of control and produce serious macro-instability. Globalization of finance, greater complexity in financial instruments and structures beyond the comprehension of a stripped down regulatory authority, and the continued force of competition pushing risk-taking to extremes poses problems for the future that could be ultra-destabilizing. The great expansion of securitization, which supposedly spreads risks beyond the original lender, has proven in the ongoing mortgage market crisis to have encouraged new levels of risk-taking that are coming back to haunt the original lenders, as well as those who bought mortgage-based packages from “responsible” lenders on trust.
These serious market inefficiencies have so far not produced a global disaster, but this has been because governments have stepped in with easy money and bailouts that so far have done their job. But with the new unknown levels of risk hidden in the market, the great likelihood of a near-term end to the unsustainable rise in the U.S. foreign debt and dollar accumulation abroad, and the possibility of a still larger war in the Middle East, financial market trouble lies ahead.
One of the central features of neoliberalism, and the class war being waged by capital against labor and the general welfare, has been the importance of privatizing everything in sight in the alleged interest of “efficiency.” An important half-hidden motivation, made explicit by Margaret Thatcher, was to weaken government, which in semi-democratic societies is potentially responsive to the public interest, in favor of an enlarged private sector, which is not responsive. Privatization has been a central objective of the IMF and World Bank in their operations, demonstrating well their role as servants of global capital.
The case for privatization is seriously flawed, although rarely contested. One flaw is its neglect of the fact that for many services there are positive externalities that a private operator will ignore because by definition these benefits can’t be captured in revenue—for example, the benefits to the environment of public transportation; the benefits to society of preventive medical care; the benefits to both overall efficiency and a democratic order of a public education system that educates everyone and gives some emphasis to knowledge essential for democratic citizenship; and the citizenship benefits of a public radio and TV system that features intelligent debate and the provision of essential information.
A second flaw is that privatization may also increase negative externalities. It has often been grounded in the ability of privatizers to shift to non-union labor and cut wages and benefits, to more readily dump older and injured workers and abandon communities without regard to social costs, and to pass off wastes on the larger community.
A third flaw is that for public services that are contracted out the state has to monitor the privatized operations to see that the promised services are rendered as stipulated in contracts. This means an extra administrative operation added to the real costs of privatization, a built-in source of inefficiency that the privatized operation may be hard put to overcome (see Elliott D. Sklar, You Don’t Always Get What You Pay For: The Economics of Privatization, 2000).
A fourth flaw is that privatization puts a premium on political influence that will allow privatizers to get contracts to inflate costs (and profits) and skimp on services. Where privatization involves the buying and taking over of public property (as opposed to contracts for services), political influence can allow the buyers to buy at low prices and effectively loot. This means that “competition” in the privatization process is more importantly a matter of trying to gain political favors than of getting the costs of services down. Once the contract is won, the government often becomes locked in to dealing with private owners who cultivate their political friends, while their former rivals are bought up or disappear. This is the basis of the classic phrases descriptive of military contractors: the contracts are “golden handshakes” between governments and contractors, who “buy in, get well later.” Instead of greater efficiency, we get inflated costs as the contractor gets well later.
Politicians who favor privatization will get well funded in the election process and when they attain power will be inclined to treat generously those to whom they owe office. A Thatcher or Bush are also ideo-logically inclined to be lavish toward privatizers, to load their adminis- trations with conflict-of-interest appointees, and to look the other way as public property is effectively stolen. In the Thatcher years, accord- ing to one estimate, the public property disposed of was undervalued by 33 percent just based on the difference between the sale price and market price of the privatized property one week after the sale. This didn’t include the huge sales costs, debt write-offs, and other expenses that made privatization “the greatest ever public finance fraud” (Dexter Whitfield). In even less democratic political environments, like Mexico and Russia, privatization looting was vastly greater.
Privatization has taken an especially heavy blow during the George W. Bush years, where everything in sight has been privatized, extending not only to military supply but intelligence and wide-ranging “security” services, and where the third and fourth flaws noted above have been dramatically evident. Political influence has shaped the process decisively, with conflict-of-interest appointments a matter of course, sweetheart contracts and non-competitive bidding across-the-board, minimal auditing and penalties for outright robbery, and looting built in. The Democrats have moved slowly into this area of immense abuse at taxpayer expense, just as they have moved at a glacial pace in extricating this country from the Iraq War. Perhaps they are too dependent on the contractor-financial community to be very aggressive here. After all, it is a different matter going after Hall- iburton, Bechtel, GE, Lockheed, and scores of others of similar power than it would be going after welfare mothers getting more than their just desserts.
But the big lesson is clear: privatization may not only greatly reduce efficiency, it can become a run-away looting operation in hands truly friendly to privatizing interests and responding fully to their demands.
Edward S. Herman is an economist and social and media critic. He is the author of numerous articles.
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AnnouncementsLABOR - May 1 is May Day. Workers of the world will celebrate the 124th anniversary of International Worker’s Day. Born out of a call for an 8-hour workday in the United States, this day is an opportunity for all workers to show their solidarity with one another, as well as to renew the call for labor rights.
FARM CONFERENCE - The Farm Conference on Community and Sustainability will be held May 24-26 in Summertown, TN, in partnership with the Fellowship of Intentional Communities. Tour green homes, see sustainable food production, learn about solar installations, alternative education, midwifery, and more.
Contact: Douglas@thefarmcommunity.com; http://www.thefarmcommunity.com/.
PALESTINE - The Conference of the Palestinian Shatat in North American will be held June 3-5 in Vancouver. The conference will examine the future of the Palestinian liberation movement.
Contact: email@example.com; http://www.palestinianconference.org/.
LABOR - The Pacific Northwest Labor History Association’s 45th annual conference will be held May 3-5, in Portland, OR. This year’s theme is Labor Under Attack: Learning from the Past and Preparing for the Future. A call for presentations, workshops and papers is currently underway.
Contact: PNLHA, 27920 68th Ave. East, Graham, WA 98338; 206-406-2604; PNLHA1@aol.com; http://www3.telus.net.
MARIJUANA - On the first Saturday of May marijuana legalization activists will hold informational and educational events, rallies and marches in over 300 cities around the world.
ECONOMICS - The Union For Radical Political Economics will hold its 39th annual conference May 9-11 in New York City.
RECLAIM THE DREAM - The 2013 Poor People’s Campaign & March from Baltimore to Washington D.C. will be May 11. Communities, schools and unions interested in participating are encouraged to contact the Baltimore People’s Assembly.
Contact: 410-500-2168; 410-218-4835; BaltimorePeoplesAssembly@gmail.com; Southern Christian Leadership Conference of Baltimore and the Baltimore Peoples Power Assembly, 2011 N. Charles St., Baltimore, MD 21218.
MOTHER’S DAY - The 17th Annual Mother’s Day Walk For Peace will be May 12th, in Dorchester, MA. The walk began in 1996 for families who had lost children to violence. The day has become a way for thousands of people to financially support the work of the Louis Brown Peace Institute.
Contact: http://www.ldbpeaceinstitute.org/; http://mothersdaywalk4peace.org/.
NATO 5 - An International Week of Solidarity with the NATO 5 has been called for May 16-21. Supports call on supporters to raise awareness of the NATO 5 and support funds for the defendants on the one-year anniversary of their preemptive arrests.
Contact: firstname.lastname@example.org; https://nato5support.wordpress.com.
MOUNTAINTOP - The 2013 Mountain Justice Summer Activist Training Camp will be held May 19-27 in Damascus, VA. It will be a week of workshops, field trips to view Mountain Top Removal coal mines, direct actions, and service project.
FEMINIST SCI-FI - The feminist science fiction convention WisCon 37 is scheduled for May 24-27 in Madison, WI.
Contact: WisCon, ? SF3, PO Box 1624, Madison, WI 53701; email@example.com; http://www.wiscon.info/.
ANARCHY FEST - A month-long Festival of Anarchy is scheduled for May in Montreal. The festival includes The Montreal Anarchist Bookfair (May 19-20).
Contact: http://www.anarchistbookfair.ca/; http://www.radicalmontreal.com/.
LABOR - The International Labor Rights Forum will present: Down the Supply Chain, Driving Corporate Accountability, on May 22 in Washington, DC. The Labor Rights Awards Ceremony and Reception will honor pioneers in supply chain worker organizing, working solidarity and international labor rights policy.
MULTICULTURE - The 26th annual National Conference on Race & Ethnicity in American Higher Education (NCORE) will take place May 28-June 1, in New Orleans.
Contact: SWCHRS, 3200 Marshall Avenue, Suite 290, Norman, OK 73072; 405-325-3694; firstname.lastname@example.org; www.ncore.ou.edu.
MEDIA - The 2013 Alliance for Community Media Annual Conference will be held May 29-31, in San Francisco, CA. Participants will include educators, community leaders, media professionals, journalists, nonprofit leaders, policymakers and students.
RADIO - The 38th Annual Community Radio Conference is schedule for May 29-June 1, in San Francisco, CA, with discussions and workshops.
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BRADLEY MANNING - On June 1, a rally will be held at Fort Meade in support of Bradley Manning.
BIKES - Bikes Not Bombs is holding its 24th annual Bike-A-Thon and Green Roots Festival in Boston, MA on June 3, with several bike rides scheduled, music, exhibitors and more.
Contact: Bikes Not Bombs, 284 Amory St., Jamaica Plain, MA 02130; 617-522-0222; firstname.lastname@example.org; www.bikesnotbombs.org.
LEFT FORUM - The 2013 Left Forum will be held June 7-9, at Pace University in New York City.
Contact: 365 Fifth Avenue, CUNY Graduated Center, ? Sociology Dept., New York, NY 10016; http://www.leftforum.org/.
VEGAN FEST - Mad City Vegan Fest will be held in Madison, WI, June 8. The annual event features food, speakers, and exhibitors.
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ADC CONFERENCE - The American-Arab Anti-Discrimination Committee (ADC) holds its annual conference June 13-16, in Washington, DC, with panel discussions and workshops on civil rights, media and other topics.
Contact: 1990 M Street, Suite 610, Washington, DC, 20036; 202-244-2990; firstname.lastname@example.org http://convention.adc.org/.
CUBA/SOCIALISM - A Cuban-North American Dialog on Socialist Renewal and Global Capitalist Crisis will be held in Havana, Cuba, June 16-30. There will be a 5 day Seminar at University of Havana, plus visits to a cooperative, urban garden, community development project, social research centers, and educational & medical institutions.
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NETROOTS - The 8th Annual Netroots Nation conference will take place June 20-23 in San Jose, CA. The event features panels, trainings, networking, screenings, and keynotes.
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MEDIA - The 15th annual Allied Media Conference will be held June 20-23, in Detroit.
Contact: 4126 Third Street, Detroit, MI 48201; http://alliedmedia.org/.
GRASSROOTS - The United We Stand Festival will be hosted by Free & Equal, June 22 in Little Rock, Arkansas. The festival aims to reform the electoral process throughout the U.S.
SOCIALISM - The Socialism 2013 Conference is scheduled for June 27-30 in Chicago, featuring talks and panel discussions.
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LITERACY - The National Association for Media Literacy Education (NAMLE) will hold its conference July 12-13 in Los Angeles under the heading, Intersections: Teaching and Learning Across Media.
Contact: 10 Laurel Hill Drive, Cherry Hill, NJ 08003; http://namle.net/conference/.
IWW - The North American Work People’s College will take place July 12-16 at Mesaba Co-op Park in northern Minnesota. The event will bring together Wobblies from branches across the continent to learn new skills and build One Big Union.
PEACESTOCK - On July 13th, the 11th Annual Peacestock: A Gathering for Peace, will take place at Windbeam Farm in Hager City, WI. The event is a mixture of music, speakers and community for peace. Sponsored by Veterans for Peace.
Contact: Bill Habedank, 1913 Grandview Ave., Red Wing, MN 55066; 651-388-7733; firstname.lastname@example.org; http://www.peacestockvfp.org.
CHILDREN’S DEFENSE - July 15-19, join clergy, seminarians, Christian educators, young adult leaders and other faith-based advocates for children at CDF Haley Farm in Clinton, Tennessee, for five days of spiritual renewal, networking, movement building workshops, and continuing education about the urgent needs of children at the 19th annual Proctor Institute for Child Advocacy Ministry.
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ACTIVIST CAMP - Youth Empowered Action (YEA) Camp will have sessions in July and August in Ben Lomond, CA; Portland, OR; Charlton, MA. YEA Camp is designed for activists 12-17 years old who want to make a difference in the world.
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LA RAZA - The annual National Council of La Raza (NCLR) Conference is scheduled for July 18-19 in New Orleans, with workshops, presentations and panel discussions.
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LABOR - The Eastern Conference For Workplace Democracy: Growing Our Cooperatives, Growing Our Communities, will be held at Drexel University in Philadelphia, PA, July 26-28.
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WOMEN/LYNNE STEWART- Radical Women is asking for support letters and cards to be sent to Lynne Stewart. Stewart is a civil rights attorney and political prisoner who is currently in jail. She has breast cancer and authorities have denied her request for transfer from her Texas prison to the New York City hospital where she received medical attention during a prior bout of breast cancer. Send messages and cards to: Lynne Stewart 53504-054, Federal Medical Center Carswell, P.O. Box 27137, Fort Worth, TX 76127.
Contact: 747 Polk Street, San Francisco, CA 94109; 415-864-1278; RadicalWomenUS@gmail.com; http://lynnestewart.org/; http://www.radicalwomen.org/.
HAITI/WOMEN - Haiti’s government is considering a legal reform measure that would prohibit and punish all sexual assault, including marital rape. MADRE and the International Campaign to Stop Rape & Gender Violence in Conflict are launching a petition to raise international support for this push to address violence against women in Haiti.
Contact: 121 West 27th Street, #301, New York, NY 10001; 212-627-0444; firstname.lastname@example.org; http://www.madre.org.
SYRIA/MIDDLE EAST - The Middle East Children’s Alliance (MECA) is currently seeking funds to assist more than 200,000 refugees fleeing violence in Syria.
FOLK FESTIVAL - The Falcon Ridge Folk Festival will be held August 2-4, in the Berkshires, NY.
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WAR RESISTERS - The War Resisters League will hold its 90th anniversary conference, Revolutionary Nonviolence: Building Bridges Across Generations and Communities, August 1-4, at Georgetown University. The event will focus on the U.S.’ long history of antimilitarism.
Contact: 339 Lafayette Street, New York, NY 10012; 212-228-0450; firstname.lastname@example.org; http://www.warresisters.org.
POPULAR ECONOMICS - The Center for Popular Economics is holding its 2013 Summer Institute August 4-9 at Hampshire College in Amherst, MA. No background in economics is needed for this intensive training. This year’s theme is, The Care Economy: Building a Just Economy with a Heart.
Contact: Center for Popular Economics, PO Box 785 Amherst, MA 01004; 413-545-0743; email@example.com; www.populareconomics.org.
VETERANS - Veterans for Peace is holding the 28th annual convention August 6-11 in Madison, WI. This year’s theme is, Power To The Peaceful.
DEMOCRACY - The Democracy Convention will take place August 7-11 in Madison, WI. The convention brings together nine conferences including topics such as media, education, defense, race, environment and others.
MEN - The 38th National Conference on Men & Masculinity: Forging Justice: Creating Safe, Equal and Accountable Communities, presented in partnership with HAVEN, will be held in Detroit, MI, August 8-10.
Contact: firstname.lastname@example.org; http://www.nomas.org/.
OCCUPY - An Occupy National Gathering will be held in Kalamazoo, MI, August 21-25.
Contact: email@example.com; http://occupynationalgathering.net/.
COMMUNITIES - The Communities Conference is a networking and learning opportunity for co-operative or communal lifestyles, with workshops, events and entertainment; scheduled for August 30-September 2 at the Twin Oaks Community in Louisa, Virginia.
LABOR DAY - The 29th annual Bread and Roses Festival, a celebration of the ethnic diversity and labor history of Lawrence, MA, will be held September 2, in honor of the 1912 Bread and Roses Strike. There will be music, dance, poetry, drama, ethnic food, historical demonstrations, walking & trolley tours.
Contact: PO Box 1137, Lawrence, MA 01842; 978-794-1655; http://www.breadandrosesheritage.org/.
OCCUPY WALL STREET - September 17 is the two-year anniversary of the Occupy Wall Street movement. Events are planned in New York City and worldwide.
TEACHERS - The 13th Annual Conference, “Teaching for Social Justice: The Politics of Pedagogy,” will be held October 12 in San Francisco, CA. The free event features workshops, resources, and free childcare.
Contact: 415-676-7844; firstname.lastname@example.org; http://www.t4sj.org/.
HAITI - International Action, which brings clean water and chlorinators to Haiti, seeks office space capable of housing up to six people and their office equipment.
Contact: Zach Bremer, Zbrehmer@haitiwater.org; 202-488-0735; http://www.haitiwater.org/.
MEDIA - The Union for Democratic Communications and Project Censored are sponsoring a joint conference on media democracy, media activism and social justice to be held November 1-3 at the University of San Francisco. Proposals for presentations, workshops and panels from activists and critical scholars are invited.