The U.S. Economy Is Socialism for the Rich

This post is part of a larger document that was prepared for the Convening on Community Values in May 2008.

In the United States, far-Right Republicans and Democratic liberals alike have sold many people on the notion that the market should be the main force to drive the economy and define social relationships. They maintain that government should stay off people's backs and out of our wallets. They promote rugged individualism and consumerism couched in terms like "personal responsibility," "freedom" and "independence." "Greed is good!" was the mantra of Michael Douglas' character, Gordon Gecko, in the 1980s movie "Wall Street," and those became the words to live by in the '80s and '90s. The philosophy and value of greed was taken to heart by many a corporate CEO, and, over the past three decades, this twisted logic -- underlined by the values of individualism and the culture of consumerism -- has turned back the clock on human development with devastating consequences.

The Chicago Boys' Disaster

Naomi Klein's landmark work The Shock Doctrine: The Rise of Disaster Capitalism summarizes the last 30 years of the neoliberal (aka neoconservative) project. These policies have had a stranglehold on the global economy for decades. But Klein argues persuasively that it is primarily in moments of societal or natural upheaval that capitalist extremists, trained by gurus like Milton Friedman at the University of Chicago, have been most able to impose their political and economic agenda. Even if a natural disaster didn't present itself, Friedman's disciples, like Kissinger, Nixon, Reagan, Bush and Clinton, had no problem wreaking their own violent havoc on vulnerable countries.

By now, the mantra of the "Chicago Boys" has become all too familiar: Eliminate regulations, cut taxes, slash public spending, privatize public services, etc. Their policies dominated the global political landscape, unraveling the gains of centuries of social movements, while a new global elite has been enriched beyond imagination. A handful of people have become super-wealthy, and megacorporations have become even bigger and more powerful.

"Free trade" policies and the loan sharks that have run the World Bank and the International Monetary Fund have destroyed national economies. Millions of people have been forced into poverty, and entire communities have been displaced from the countryside. Multinationals and northern industrial nations siphon wealth from the developing countries. Those that migrate from their homelands to make a living in the north are greeted with walls, bullets and racism. In the United States, millions are homeless, unemployed, in prison, or one paycheck away from bankruptcy. The social wage has been beaten down to unsustainable levels -- real wages are lower now than they were 30 years ago. Yet the costs of fuel and raw materials have skyrocketed, causing worldwide food shortages. We have wiped out public budgets by eliminating taxes on those who profit most. Vital public infrastructure and services cannot meet basic needs like maintaining the levees in New Orleans and reconstructing the Gulf Coast, or controlling the devastating blazes in Southern California. Yet the majority of our federal budget sponsors the wars and occupation in the Middle East, the warehousing of generations of the poor and people of color, the witch hunt of immigrant refugees of U.S. foreign and trade policy, and the growing national debt.

Capitalism unchecked has given us Big Oil, Blood Diamonds, Enron and Halliburton. They have given us Afghanistan, Iraq, Guantanamo and the Wall of Death on the U.S.-Mexico border.

The rise of the neoliberal regime has occurred in the same era that we are experiencing the decline of the economic and political dominance of the United States empire. Scholar Immanuel Wallerstein observes that economically the United States has been losing its top economic position since the 1970s as other regional economies have expanded. The country is staring economic collapse in the face, driven by the bursting of the housing bubble. This bust is enough to make even billionaire George Soros nervous, arguing that there is a profound difference between this downturn and other recent ones:

... the current crisis marks the end of an era of credit expansion based on the dollar as the international reserve currency. The periodic crises were part of a larger boom-bust process. The current crisis is the culmination of a super-boom that has lasted for more than 60 years.

Soros argues that with the deregulation of the financial industry, many of the mechanisms put in place to withstand a significant bust cycle have been eliminated. The Federal Reserve and the government may no longer have the tools to stave off a recession.