TheMillerCircle.org

Way back in the 1960s, it was a common perception to visualize a jagged rather than a sharp line of demarcation  between Republicans and Democrats. Important legislation passed in the 1960s did so with the support of Republicans and Democrats and there was such a thing as a moderate or even liberal Republican (Rockefeller). But in the fifty years since then, a giant chasm has opened up between the parties, as the Republicans have marched to the edge of that chasm, peering into their shrinking constituency and wondering if the stitching that holds their party together, such as the cultural wars, isn’t unraveling and pushing the party into the pit that they have so skillfully excavated. As the nature of business evolved in America, from manufacturing to the casino economy of Wall Street,  the Republican party marched in lock-step with this transition, as they helped, at every turn, to remove the objectionable restraints that Wall Street needed to march all of us out on the diving board and into the deep end of the pool. In the wake of this disaster, neither the Republican party nor the Wall Street tycoons have yet to acknowledge either the mechanisms of their undoing or the responsibility they must bear for our economic downfall. Many Republicans still insist that only the free market economy can get us out of our present fix. Today, the Republican Party has become the party of nihilism, as they continue their addiction to the medications sold on Wall Street. They are not just the party of social Darwinism, but the party of social Darwinism aided by government decisions and infusions of serious money into the financial sector,  to make sure that their hypothesis turns into reality: the good will succeed and most of the rest of us will fail.  Many Republicans feel it’s that way already–they already won.  They have hollowed our government to be as dysfunctional as they are. Republicans have run out of ways to disguise their blind devotion to this principle, as they feverishly pursue issues which will  further impoverish the country, while further enhancing wealth opportunities for a small cluster of the super-rich. In the 1960s, Lyndon Johnson had to recruit moderate Republicans in order to pass civil rights legislation over the stiff resistance of the Southern Democrats. When Johnson signed the new Civil Rights legislation, he remarked to Bill Moyers,  “I have just turned the South over to the Republican party.” And the rest they say is history. Well not quite. Getting the South helped to keep Republicans in power, but creating a dysfunctional party was the result of sticking with business and fully supporting the transition of American wealth from manufacturing to financial services.

Historically, the Republican party became the party of business in the latter half of the nineteenth century, after Lincoln was assassinated, as they lost their stomach for the reconstruction era following the Civil War. Reconstruction, backed by Northern troops in the South, was designed to protect the rights of slaves freed by the emancipation proclamation, followed by the Thirteenth Amendment which abolished slavery. When the Republican party abandoned the South, through the “Compromise of 1877,”  white Southern racists assumed control, the fourteenth amendment (giving all citizens the right to vote) was completely  ignored, while  ‘states rights’ argument returned as justification for denying the black vote in the South, allowing wide-scale lynching and intimidation to be pursued by the Klu Klux Klan, the largest internal terrorist organization in United States history.

But it was nearly a century later, created by the evolution of the American business model, with new emphasis on the non-manufacturing wealth of giant financial centers, that changed the Republican party from one with primary responsibility to our manufacturing sector, into a party committed to the financial services sector, where corporate greed and wealth for a small minority emerged as the Holy Grail of the party with its inevitable slide into corruption, cronyism, waste and irresponsible management. In the latter half of the twentieth century, the Republicans were able to help recreate the gilded age of the late nineteenth century, with some additional excesses thrown in for good measure. In case you didn’t pay attention, the concept of working in government as a public service obligation was no where to be seen in the GW Bush administration and Republicans in general have been more committed to tearing down Democratic governance, particularly those created during the New Deal,  rather than pursuing more coherent objectives in public policy. Republicans do not have a governing philosophy, only a vision of what they don’t like. The final Republican success was given to us in the Katrina disaster, as seen on television sets throughout the world. Most of us looked on in horror at Katrina, whereas the Republicans looked at it as a huge success: government had finally failed! Cronyism works! The pursuit of personal wealth as the only real element of the Republican party platform, is always disguised in the rhetoric of gay rights, abortion, national security, defense and anti-socialism policies, but the sole objective of the party is to help the financial sector acquire more wealth through free market reforms and then get re-elected with the help of a giant campaign war chest.

Recent statements by Senator John Kyl, Republican from Arizona, explain his party’s attitude in the face of the biggest recession since the Great Depression. Paul Krugman writes in one of his columns last week, “Consider, in particular, the position that Mr. Kyl has taken on a proposed bill that would extend unemployment benefits and health insurance subsidies for the jobless for the rest of the year. Republicans will block that bill, said Mr. Kyl, unless they get a “path forward fairly soon” on the estate tax. Now, the House has already passed a bill that, by exempting the assets of couples up to $7 million, would leave 99.75 percent of estates tax-free. But that doesn’t seem to be enough for Mr. Kyl; he’s willing to hold up desperately needed aid to the unemployed on behalf of the remaining 0.25 percent. That’s a very clear statement of priorities.”

So imagine that Senator Kyl, the second leading Republican in the Senate, is willing to hold hostage an important bill for the unemployed, many of whom lost their jobs as a result of the executives in charge of our casino economy, so that the wealthy few that are affected by this additional 0.25 percent inclusion, will be able to pass on unlimited wealth to their progeny, thus providing untold riches to another generation of Americans who will not experience the dilemma their parents put the country in, a situation that is likely to last for many decades to come. Why the infamous Republican party still get votes and can win elections is a subject best explored at another time.

Another example of Republicanism at work also came from Senatory Kyl last week, as he appeared on the floor of the Senate, to offer additional justification for the obstructionist vote of Senator Bunning in holding up the unemployment compensation package to extend benefits for another month (Kyl himself did not vote against the bill and it eventually passed). Also from Krugman’s oped piece of last week, Kyl stated that   “unemployment relief doesn’t create new jobs. In fact, if anything, continuing to pay people unemployment compensation is a disincentive for them to seek new work.” Mind you, Kyl made this statement at a time when there are five unemployed workers for every job available. Had it not been for a reluctant, cautious Democratic party, incapable of pursuing the Republicans to drive a stake in their black hearts, we might have had fifty years of uninterrupted, badly needed progressive change, including the retraction of our global empire that may prove to be the financial undoing of the entire country.

In “The Collapse of British Power” the final volume of Correlli Barnett’s “Pride and Fall” he points out “The fundamental factor in the total strategy of a nation lies in industrial and commercial performance, for it is this which determines power and wealth alike.” Barnett suggests that Britain fell into a “fateful pattern of national overambition coupled with industrial underperformance.” Britain’s influence died with its economy, as it became an American dependency” (quoted from an article by Paul Roberts in CounterPunch, Vol 17, No 3, page 1). The Republican party dominated the executive branch of the American government for twenty of the last twenty-eight years by converting the South into Republicans and many frustrated blue collar workers into Reagan Democrats, primarily by having them join in the culture wars, as they abandoned the Democratic party, who lost their historic fusion with the American labor movement.  Yet, while that explains the Republican party’s return to Presidential dominance over the last quarter century, it does not account for how they acquired sole ownership of the policies of wealth promotion for those that already have it.

When manufacturing dominated the American economy, executives had to interact with labor unions and face supply and transportation constraints in order to successfully generate a profit. As productivity grew, so too did wages as part of the non-verbal agreement between labor and management, in which the CEO of the company favored the golden watch over the golden parachute. Employee retirement was secured through a corporate financed retirement plan, not a 401K worker/corporate pay-in option. But when the new economy of finance began to dominate corporate profits, huge levels of wealth could be achieved by hollowing out the manufacturing industries of America and reducing labor costs by sending giant manufacturing swaths to China. Financiers discovered that you didn’t have to work so hard to get rich and you didn’t have to deal with labor unions and suppliers. This conversion was done in piecemeal fashion initially, until the model got fully embedded, but in a relatively short period of time, beginning in the late 1980s, and greatly accelerated during the GW Bush years, manufacturing transitioned to China, followed by  jobs that were once considered safe for college graduates in America, sent over on the  second boat out of American shores into India. The financial sector of America, enthused by the profits of selling off American companies and manipulating the currencies of other countries,  abandoned their traditional role as the financiers of American growth and turned instead to making huge profits by corporate downsizing, huge labor layoffs, corporate raiding of retirement accounts, leveraged buyouts, selling assets to China and creating publicly-financed bailouts in which the public assumed risk liability while corporate finance reaped the profits. Had we simply given the $700 billion in TARP funds to Americans to spend, our economy would likely be far better off today, whereas we are still in serious danger of sliding backwards in our economic stability. It is still a fragile economy, with long-term unemployment projected far into the future and a dramatically shrinking middle class as part of the economic “Shock Doctrine” as revealed by Noami Klein.

Downsizing America has affected everyone. Captain Chesly Sullenberger, the celebrated pilot who skillfully landed his damaged plane on the Hudson River last January, saving all 155 passengers on the plane, has just retired. Sullenberger’s fame catapulted him into the public limelight and he was able to generate new income from his fame through appearances and a book, with the promise of another. His salary of $130,000-$150,000 had been cut by 40%  in recent years, while his pension was cut to pennies on the dollar. Until his instant fame brought in new revenue, he thought he would have to work the rest of his life. That is the story of forcing airliners into deep public debt while reaping huge profits through excessive pay and timely stock investments for the corporate leaders who buy and sell these airline companies. Stories like that have been repeated throughout the entire spectrum of private and public functions, industry and businesses.

The failure of Democrats to step in and expose the Republican party for who they really are and hammer home what they really stand for, can in part be accounted for by the reduction in unionized labor organizations, who were once at the core of the New Deal, fashioned by FDR. At one time about 40% of our work force belonged to labor unions, but today that number is around 9%. The reductions of labor union workers, coupled with the lack of understanding of the Democratic core by the two Southern Democratic Presidents (Carter and Clinton), reduced the core strength of the Democratic party and forced many Democrats to seek campaign support from the same sources that provide Republicans with their campaign chests. One can only hope that Obama sees not only the hopelessness of negotiating with Republicans, but can also visualize the great dangers they pose for passing good public policies, including a restoration of a progressive tax code that can restore the public safety net and secure support for sensible social needs of a complex society. We have too many poor and homeless citizens and those numbers are growing rapidly.  If the financiers of America have proven anything in this last manufactured bubble of sub-prime mortgages, it is that they have too much money to play with and when they do play, they are fully capable of endangering our entire framework of economic security. The forces that crippled our economy should now be forced to pay for its resurrection with new manufacturing capabilities to support a green economy with companies run by the creative energies of our Middle Class, not the barons of Wall Street, who deserve a trip to the dust bin of history along with their Republican supporters and lackeys.

During the prominence of the New Deal, when we had powerful labor unions locked into struggles with a vibrant manufacturing economy, corporate profits had to contend with a well-paid workforce, members of whom had joined the Middle Class with no more than a high school education, but with income resources sufficient to insure that their children could attend college and have the prospects of a better life. That trend has now reversed itself. In the 1990s, when corporate profits from the financial sector began to outstrip profits from manufacturing, and we began an accelerated trend of sending manufacturing jobs to China, the Republican Party was left holding the bag, not so much for the dwindling influence of the manufacturing sector, but for the  more profitable financial sector, where credit default swaps and other “financial instruments” were generated based primarily on deceit and obfuscation, to protect a grand secrecy in profligacy and stock market bubbles that have endangered our economy. During this period, American industry got hollowed out and manufacturing CEOs were replaced by Wall Street tycoons that we thought had been left behind in shallow graves marked for the gilded age of the late nineteenth century. The term “Gilded Age” was coined by Mark Twain and Charles Dudley Warner in their 1873 book, The Gilded Age: A Tale of Today. Now we are experiencing the disastrous outcome, not only of the fiscal irresponsibility that brought our financial system to its knees and still threatens the global economy, but American financiers are still playing the same games of risk and secrecy in making profits out of financially troubled countries like Greece, Spain and Portugal. Yet, these giant financial organizations continue to operate as if nothing had happened and the Republican party continues to champion their interests as if the American public is too stupid to understand the Tsunami that swamped the shoreline of America.

Any successful righting of our listing ship will require a new wave of politically dedicated progressives who have the support of those that increasingly understand our problems–we have one party that has become too toxic to save and another that is teetering on the brink, but needs to step back and join those that are willing to invest in the real strength of America–its creative Middle Class, in much the same way that we invested after WW II and in response to Sputnik, when we launched the Golden Era of the American Research University. That period elevated the entire nation and it can be done again, with the same certain outcome. We just need a political party to sign on to these initiatives and away we go.

RFM