State (of) Capitalist Absurdity: Reflections Before and After Obama’s State of the Union Address
Civility for the Few, Brutality for the Rest
Preparing for a radio interview on Barack Obama’s upcoming State of the Union Address (SOUA) last Tuesday morning, I nearly became overwhelmed by some of the multiple and interrelated Orwellian absurdities at the heart of United States’ reigning media-politics culture.
Take the Kabuki drama of peace and harmony planned by U.S. senators and representatives who pledged to sit next to colleagues from the “other” party in the name of post-Tucson civility” during Obama’s speech. Both wings of the pro-business, right-tilting U.S. “one-and-a-half party system” (Sheldon Wolin) agree on core policy fundamentals that deepen the United States’ status as the most unequal and wealth-top-heavy nation in the industrialized world: giant (multi trillion dollar) taxpayer giveaways to the same parasitic financial firms that recklessly drove the U.S. and global economy over the cliff in 2008; massive tax cuts for the rich, de-regulation of business (a major cause of the 2007-08 financial meltdown); corporate-mismanaged health case; corporate globalization; an ongoing elite business assault on unions, social programs, public sector workers, and livable ecology; American hyper-militarism; big money domination of politics and policy; and dumbed-down, business-friendly schooling from K to Ph.D. Meanwhile vast social needs go unmet in a nation where the top 1 percent owns more wealth than the bottom 90 percent and 25 million are functionally unemployed – a nation scarred by a black-white median household wealth gap of 7 black cents on the white dollar. Holding hands across supposedly polarized partisan lines, elected officials from both reigning business parties offer no serious to deep problems confronting the American people—mass structural unemployment, extremes of great wealth and mass poverty, massive racial disparity, racist mass imprisonment, escalating ecological catastrophe, corporate control of media and politics, the ongoing deterioration of social infrastructure, and a vastly expensive military empire that continues to conduct criminal wars both overt and covert, and more.
The promised (and in fact performed) bi-partisan seating drama was all too consistent with Obama’s vapid, media-celebrated Tucson speech commemorating the victims of the fascist mass murderer Jared Loughner. At a memorial service titled “Together We Thrive: Tucson and America,” the president told mourners how “Scripture tells us that there is evil in the world, and that terrible things happen for reasons that defy human understanding.” Quoting from the Book of Job, the president informed his fellow Americans that “Bad things happen, and we have to guard against simple explanations afterward. None of us can know what triggered the attack or what could have been done to prevent it.” This was totally absurd. Loughner is an unbalanced fascist who lives in a savagely unequal, amoral, and insecure society that disseminates hateful and paranoid messages across its right wing media empire. That society lacks a decent mental health policy and makes deadly weapons available to disturbed and dangerous people. Loughner was deemed too mentally unstable to attend community college or join the U.S. Army, but he had no difficulty purchasing a Glock handgun and a 33-round magazine. He lives in a country that is controlled by an amoral business elite that has been ruining American lives and driving untold numbers of working and middle class people out of their minds for decades. The investor class has no use for masses of American citizens, 15 million of whom are now officially unemployed (the real number of involuntarily jobless is much higher) – the biggest number since the Great Depression.
“Together we thrive?” Arizona has the second highest official poverty rate among the nation’s 50 states, a stunning 21.2 percent (the state’s real or functional poverty rate is certainly over 30 percent) and Tucson has the highest poverty mark of any city in the state. Less than half (45 percent) of Arizona’s residents possess private health insurance, and a fifth of the state’s population, more than 1.3 million, lack health coverage of any kind. More than 70,000 homes were foreclosed in Arizona in 2010, up from just 1,000 in 2005. If there’s one thing Tucson and Arizona have not been doing recently it is “thriving.” (According to recent reports, Loughner had not received a paycheck in six months. He’d been fired from at least five jobs and filled out employment applications at more than 60 low-wage retail outlets.). And amidst this crisis, hard right media and political personalities likes Glenn Beck instruct shattered people with fragile psyches and damaged minds to “act now” (before its too late) against “socialist tyranny” – the right’s ludicrous take on Obama’s corporate centrism. Deadly, state-of-the-art human-exterminating weapons run remarkably free, like the madness and hatred on the airwaves and the Internet, where the preposterous notion that centrist, corporate-friendly Democrats are radical Marxist enemies of freedom and prosperity is standard fare. America is something of an “Armed Madhouse,” to quote a book title from Greg Palast, as is suggested in a chilling post-slaughter comment from Tea Party state representative Jack Harper (R-Arizona). “When everyone is carrying a firearm,” Harper proclaimed, “nobody is going to be a victim.” Barack “None of us can Know” Obama naturally did not challenge the powerful gun lobby by calling for any reasonable gun control legislation in his Tucson address – or in his SOUA.
Posing on civility while advancing brutal and plutocratic polices that turn a nation into a weapons-soaked asylum is an ugly, elitist, and uncivil exercise. It’s absurd.
What’s Good for Capital...
Another Orwellian absurdity is presented by the widely disseminated notion of an identity of economic interests between big American capital and the rest of the country has far less plausibility than it did half a century ago. The deficit-fueling tax cuts for the rich that Barack Obama recently agreed to inherit and pass on from George W. Bush have been sold to the American public as necessary for the creation of jobs and the expansion of recovery. Profits for the wealthy few, the argument goes, mean more employment and income for the people.
The claim is ridiculous. As the Associated Press (no leftist organ) reported just 13 days after Obama signed the tax cut legislation, there is currently a savage disconnect between the profits of big U.S. capital and the needs of American working people. American corporate profits and stock prices are way up, the AP reported, but hiring is not. All but 4 percent of the nation’s top 500 companies reported profits in 2010. The stock market is approaching its highest peak since the financial meltdown of 2008. But the jobs dividend that is supposed to filter down to ordinary Americans when the American rich prosper is nowhere to be seen. The official unemployment rate crept back to 10 percent (the real or functional unemployment rate is closer to 20 percent) at the end of the year. In a recent article “Profits are Booming, Why Not Jobs?” the New York Times reported that corporate “earnings” had exploded “even as 15 million [the official number, far too low – P.S] Americans remain mired in unemployment, a number without precedent since the Great Depression” and while the citizenry experiences “record levels of foreclosures and indebtedness.”
The Times found numerous logical reasons for the U.S. profits-jobs disconnect. Some big American firms are showing higher profits simply because their competition has faded. Following the financial collapse of 2008, for example, the Wall Street giants Goldman Sachs and Morgan Chase no longer have to compete with Bear Stearns, Lehman Bros. and Merrill Lynch. Many jobs disappeared with the collapse of the defeated behemoths. Many companies are sitting on capital and storing up liquidity like never before in the wake of the financial collapse. Firms who no longer believe they can borrow quickly have decided to keep a lot more cash on hand for precautionary purposes. Low interest rates produced by the recession create an incentive for many companies to simply “exploit the spread between a zero funds rate and rates on Treasury bonds.” This permits corporations to “mark profits without selling much or hiring anyone.”
At the same time, a large reserve army of unemployed workers is a profits boon to corporate American in its ongoing top down class war on workers’ income and security. Desmond Lachman, a former managing director at Salomon Smith Barney who now works as a “scholar” at the influential right-wing policy group the American Enterprise Institute, speaks about this in candid terms. “Corporations,” Lachman told the Times, “are taking huge advantage of the slack in the labor market — they are in a very strong position and workers are in a very weak position,” he said. “They are using that bargaining power to cut benefits and wages, and to shorten hours.” That’s not unemployment as an anomaly for capitalist profits; it is joblessness as a source of them.
There’s also the little matter of “American” capital’s global essence. Lachman worries that capital’s wage- and benefit-cutting strategy “serves corporate and shareholder imperatives” (Powell’s paraphrase) but “very much jeopardizes our chances of experiencing a real recovery” (Lachman). But how much does big “American” capital really care aboutAmerica’s economic health (or the economic health of any specific nation for that matter?) Another great factor behind the profits-jobs disconnect is the basic fact that the big “American” companies are actually global outfits. (The Associated Press’s end-of-the-year assessment of the American profits-jobs disconnect was titled “Where are the Jobs? Overseas.”) Insofar as the rise in U.S. corporate profits is creating jobs at all, the AP reported, the employment dividend is being enjoyed primarily abroad. The Economic Policy Institute (EPI) finds that American firms created 1.4 million jobs outside the U.S. in 2010, compared to less than 1 million in the U.S. Leading “American” firms like Caterpillar (which has invested in three new Chinese plants in the last two months), DuPont (which shrank its U.S. workforce by 9 percent and increased its Asia-Pacific workforce by 54 percent from 2005 to 2009), and Coca Cola (less than 13 percent of its 93,000 global employees are in the U.S.) are drawn to emerging markets and an increasingly skilled but low-cost workforce in south and east Asia. As EPI’s senior international economist Robert Scott told the AP, “There’s a huge difference between what is good for American companies and what is good for the American economy.”
Obama “Becomes” Pro-Capitalist
And then there’s the absurd business and media claim that Barack Obama was until recently a left and “anti-business” president. Obama has recently made a number of moves calculated to win the more heartfelt allegiance of the top business players. Besides the recent tax cuts, Obama published an essay in the rabidly plutocratic editorial pages of The Wall Street Journal praising “free market capitalism” as “the greatest force for prosperity the world has ever known”) and agreeing that government often places “unreasonable burdens on business” that have a “chilling effect on growth and jobs.” (The tone of his article strongly and absurdly suggested that it wasn’t deregulation that sparked the financial collapse, but all those nasty little “big government” rules and regulations that stifle innovation and growth.) Obama signed an executive order calling for a government-wide review of regulations to remove or revise those that supposedly inhibit business. He appointed JPMorgan Chase’s William Daley – a leading agent of the corporate-globalist North American Free Trade Agreement (NAFTA) under Bill Clinton – as his chief of staff. He put Goldman Sachs’ Gene Sperling (another legendary neoliberal) at the head of the National Economic Council and tapped General Electric CEO Jeffrey Immelt to head the new President’s Council on Jobs and Competitiveness.
The new council’s title refers to specifically American jobs and competitiveness – something that made Immelt’s appointment more than a little darkly ironic and Orwellian. With fewer than half its workers employed in the United States and less than half its profits coming from U.S. activities, liberal New York Times columnist Paul Krugman noted, “G.E.’s fortunes have very little to do with U.S. prosperity.”
Some Obama fans applauded Immelt’s appointment because, they said, he represents a company that actually produces goods rather than just being a parasitic manipulator of paper, financial wealth. But this praise was ridiculous: G.E. actually “derives more revenue from its financial operations than it does from manufacturing” (Krugman).
Equally absurd is the business and media claim that Obama has recently undertaken some sort of shift to the center and away from an “anti-business” viewpoint. Obama has always been a militantly centrist corporate-neoliberal – an orientation reflected in his early cabinet appointments and in the policies of his first two years in office. With its monumental bailout of hyper-opulent financial overlords, its refusal to nationalize and cut down the parasitic too-big (too powerful)-to-fail financial institutions that have paralyzed the economy, its passage of a health reform bill that only the big insurance and drug companies could love (consistent with Rahm Emmanuel’s advice to the president: “ignore the progressives”), its cutting of an auto bailout deal that raided union pension and rewarded capital flight, its undermining of serious global carbon emission reduction efforts at Copenhagen, its refusal to advance serious public works programs (green or otherwise), its disregarding of progressive-sounding promises to labor and other popular constituencies (the forgotten Employee Free Choice Act and claims that Obama would include labor and environmental protection in NAFTA), and other betrayals of its “progressive base” (the other side of the coin of promises kept to its corporate sponsors), the “change” and “hope” (Bill Clinton’s campaign keywords in 1992) presidency of Barack Obama has brilliantly demonstrated the power of what Edward S. Herman and David Peterson call “the unelected dictatorship of money.” As Bill Greider noted in The Washington Post as Obama and his Wall Street-groomed economic team concluded his first round of high finance bailouts, “People everywhere [have] learned a blunt lesson about power, who has it and who doesn’t. They [have] watched Washington run to rescue the very financial interests that caused the catastrophe. They [have] learned that government has plenty of money to spend when the right people want it.” It’s all very consistent with Obama’s longstanding “deeply conservative,” pro-business world view, which I documented at length in an early, comprehensive, and widely ignored (even on what passes for an American left) study of Obama’s political career.
In his purportedly “progressive” 2006 campaign book The Audacity of Hope, Obama grounded the United States’ supposed distinctive greatness in its “free market” capitalist system and “business culture.” The American overclass should have been gratified by Obama’s paean to the United States’ “free-market” system of (state- and corporate-) capitalism:
‘Calvin Coolidge once said that “the chief business of the American people is business,” and indeed, it would be hard to find a country on earth that’s been more consistently hospitable to the logic of the marketplace. Our Constitution places the ownership of private property at the very heart of our system of liberty. Our religious traditions celebrate the value of hard work and express the conviction that a virtuous life will result in material rewards. Rather than vilify the rich, we hold them up as role models…As Ted Turner famously said, in America money is how we keep score.’
‘The result of this business culture has been a prosperity that’s unmatched in human history. It takes a trip overseas to fully appreciate just how good Americans have it; even our poor take for granted goods and services – electricity, clean water, indoor plumbing, telephones, televisions, and household appliances – that are still unattainable for most of the world. America may have been blessed with some of the planet’s best real estate, but clearly it’s not just our natural resources that account for our economic success. Our greatest asset has been our system of social organization, a system that for generations has encouraged constant innovation, individual initiative and efficient allocation of resources…our free market system’ (Barack Obama, The Audacity of Hope: Thoughts on Reclaiming the American Dream [New York, 2006], 149-150).
Audacity left it to actual left progressives – characterized by Obama and many of his supporters as insufficiently “realistic” and excessively “moral absolutist” carpers, “cranks,” “zealots,” and “gadflies” (Obama’s insulting description of the populist U.S. Senator Paul Wellstone in 2006) – to observe some of the undesirable and less-than-“efficient” outcomes of America’s heavily state-protected “free market system” and “business culture.” Those results include: the allocation of more than a third of the nation’s wealth to the top hundredth of the U.S. population; business-ruled workplaces and labor markets steal “individual initiative” from millions of American workers subjected to the monotonous repetition of often imbecilic and soul-crushing operations conducted for such increasingly unbearable stretches of time – at stagnating levels of material reward and security – that working people are increasingly unable to participate meaningfully in the great “democracy” Obama trumpets as the Founders’ great legacy; and the catastrophic, climate-warming contributions of an eco-cidal nation that constitutes 5 percent of the world’s population but contributes more than a quarter of the planet’s carbon emissions. Other notable effects include the generation of poverty for tens of millions of U.S. children while executives atop “defense” firms like Boeing, Lockheed-Martin, and Raytheon rake in billions of taxpayer dollars for helping the United States maintain the deadly and controversial occupation of Iraq and Afghanistan.
The Myth of the Suffering Business Elite
Of course, few things could be more absurd than the widely propagated notion that big “American” business has suffered in the Age of Obama. That belief is on par with Big Brother’s claims (in Orwell’s Nineteen Eighty Four) that 2 + 2 = 5, that war is peace and that love is hate. The last two years have seen the taxpayer-funded restoration of record corporate profits and extravagant Wall Street bonuses as millions of ordinary Americans continue to run out of ammunition in the war against destitution. Only a supine slave of the opulent Few could agree with the financial and corporate elite’s claim to have suffered under leftist government control in 2009-2010. The American rich have been doing splendidly well, other Americans’ less than merely coincidental suffering aside.
His Collaborationist, Center-Right Self
Another absurdity worth mentioning is the widely disseminated view that Obama was defeated, chastened and forced to reign in his supposed left-progressive dreams by the great Republican and Tea Party triumph in the mid-term elections last November. This is completely false. Increased Republican power is precisely Obama’s centrist, post-partisan and neoliberal comfort zone. It’s where he thrives. He’s in his conciliatory, fake-civil element now. As the indispensable black radical political commentator Glen Ford reminds us, “the Democratic [Party] disaster has created the conditions in which President Obama can be his collaborationist, center-right self while being praised as a statesman who knows how and when to compromise. Obama is closer than ever to achieving his wished for grand consensus with the GOP – as Clinton did with NAFTA and banking deregulation. That’s why he’s once again hired Clinton’s old economic team.”(Glen Ford, “Obama’s Comfort Zone: King of Collaboration,” Black Agenda Report, January 12, 2011, at http://www.blackagendareport.com/?q=content/obama%E2%80%99s-comfort-zone-king-collaboration).
“The Best Place on Earth to do Business”
Which brings me, belatedly, to the president’s right-leaning State of the Union Address itself. I found it absurd. As politicians from the two “polarized” business parties sat next to each other (the multi-millionaires John Kerry and John McCain made a fetching pair) in the name of loving kindness, the Great Conciliator advanced the top-down class war of the rich and powerful against the rest of us. As politicians from the two reigning business parties sat next to each other in the name of civility, the Great Conciliator advanced the top-down class war of the rich and powerful against the rest of us. Obama’s speech was a paean to the glories of American capitalism and its supposedly suffering, over-burdened business and financial “leaders.” The president claimed to have “broken the back of the recession” – this while millions of Americans struggle with the continuing obscenity of a “jobless recovery.” Obama bragged about how “the stock market has come roaring back” and “corporate profits are up.” He parroted business class concerns about “the deficit,” ignoring the urgent need for more (not less) government spending and the role of his and George W. Bush’s plutocratic tax cuts for the rich in the undermining of positive government. He said nothing about the need for the sustainable, downward redistribution of wealth– something very different than standard eco-cidal pursuit of quantitative growth. Claiming that “our free enterprise system is what drives innovation,” he showed no recognition that the restoration of corporate and financial super-profits was achieved by transferring trillions of public dollars from taxpayers to the investor class. He advanced no bold proposals to address American hyper-inequality and joblessness. He had nothing to say about hunger, homelessness, foreclosures, and poverty. These problems went completely unmentioned “despite sharp increases in all four during the first two years of Obama’s tenure” (Patrick Martin, “Obama Outlines right-Wing, Pro-Corporate Agenda in State of the Union Speech,” World Socialist Web Site, January 26, 2011). Also not mentioned were the problems of racially disparate mass incarceration (the world’s imprisonment leader the US saddles 1 in 3 of its black adult males with the crippling lifelong mark of a felony record) and the relentless out-sourcing of U.S. jobs.
Obama called for the United States to meet the challenge of increasing economic competition from foreign countries with increasingly educated workforces by becoming “the best place on Earth to do business.” He ignored the multinational nature of the leading “American” business firms and the critical fact that “American” capital invests in overseas production largely because of its interest in exploiting cheap and oppressed workers. Required by U.S. law to put shareholder’s interests above all others, the coordinators of elite “American” capital gravitate like moths to light towards low-priced and super-exploited labor in places like Foxconn's Longhua factory campus in Shenzhen, China— where “a dutiful army of 300,000 employees eats, sleeps, and churns out iPhones, Sony (SNE) PlayStations, and Dell (DELL) computers.” Employing more than 920,000 workers across 20 mainland Chinese factories, Foxconn “leverag[es] masses of cheap labor, mainly 18-to-25-year-olds from rural areas, to make products like the iPhone at seemingly impossible prices” (Business Week).. Foxconn does business with leading “American” multinationals, including IBM, Cisco, Microsoft, Sony, Hewlett-Packard, and Apple. Foxconn factor workers receive a mere $176 per month in return for performing specialized labor tasks under conditions so alienating that 11 of the company’s workers committed suicide in early 2010, most of them by leaping from Foxconn’s high-rise worker dormitories. (The company subsequently strung “more than 3 million square meters of yellow-mesh netting around its buildings to catch jumpers and set up a 24-hour counseling center staffed by 100 trained workers.”). According to Business Week, the entrance to the Longhua campus “looks like a border crossing, with seven toll-booth-like lanes and uniformed guards.” The “drab and utilitarian” production complex includes “huge LED screens that flash public-service announcements and cartoons, and a bookstore that sells, among other things, the Chinese-language translation of the Harvard Business Review.” The bookstore prominently displays biographies of Foxconn founder and CEO Terry Gou, the so-called “Henry Ford of China,” estimated by Forbes to enjoy a personal fortune of $5.9 billion. One of the Gou biographies collects his many pithy aphorisms, including "work itself is a type of joy," "hungry people have especially clear minds," "an army of one thousand is easy to get, one general is tough to find,” and "a harsh environment is a good thing” – all no doubt comforting to the Foxconn workers telling the company’s crisis-line counselors of their depression (Frederick Balfour and Tim Culpan “The Man Who Makes Your Iphone,” Business Week, September 9, 2010 at http://www.businessweek.com/magazine/content/10_38/b4195058423479.htm).
National differences in education matter, but the grueling nature of working class life in Shenzen and across the peripheries of the world economic system is a leading factor behind the fact that American workers no longer make any but a small portion of many of the consumer goods sold in the U.S. A harsh environment for labor is a good and profitable thing for globally mobile capital. Be very worried and think of Shenzen and Bangalore and the sweatshops of Bangkok, Guatemala City,and Taipei when “your” fake-progressive, corporate-neoliberal president leans his collaborationist, center-right, and corporate-funded self into the idea that the U.S. should be “the best place on Earth to do business.”
Paul Street (www.paulstreet.org) is the author of many articles, chapters, speeches, and books, including Empire and Inequality: America and the World Since 9/11 (Boulder, CO: Paradigm, 2008; Racial Oppression in the Global Metropolis (New York:Rowman & Littlefield, 2007; Segregated Schools: Educational Apartheid in the Post-Civil Rights Era (New York: Routledge, 2005); Barack Obama and the Future of American Politics (Boulder, CO: Paradigm, 2008); and The Empire’s New Clothes: Barack Obama in the Real World of Power (Boulder, CO: Paradigm, 2010). His next book Crashing the Tea Party: Mass Media and the Campaign to Remake American Politics (co-authored with Anthony DiMaggio) will be published next May. He can be reached at firstname.lastname@example.org.