Wednesday, July 27, 2011

Shock Doctrine-style coup d'etat?

From an email:
"You might view the entire crisis as a Shock Doctrine-style coup d'etat by the rentier class."
I would not say "might" here. This is a solidification of a creeping coup that began some time ago. The ground work was laid in the Nixon administration, the foundation constructed in the Reagan-Bush 43 years, after Carter had begun deregulation, the superstructure begun under Clinton-Rubin, and largely finished under Bush 44, especially with the conservative business-friendly supreme court that came with Alito and Roberts, which was the de facto coup d'état (as I wrote about at Daily Kos at the time as the real issue rather than Roe v. Wade). The Obama administration is simply putting on some finishing touches.

I would not say that this is anything new. It was the case prior to the New Deal, which only came into being due to elite overreach. The New Deal can be viewed as a hiatus rather than a reversal, since the right, dominated by industrial and finance capital, began working immediately to reverse the ND through political allies. It's just taken awhile for them to implement the plan.

I won't go into the blow-by-blow here since I think that everyone here [email addressees] knows what the scenario has been. The point I am making is that this is all a part of a piece. This is clearly a manufactured crisis. There can be no doubt that it is being used to impose political and economic change that polls show the overwhelming majority opposes.

This is not going to change until the US gets the money out of politics and closes the revolving door. Money talks and politicians walk. The media is compromised, first because of ownership, and secondly, because reporter have to tred lightly to maintain access. The system is thoroughly corrupt to the core.

This is nothing new. The US has been a plutocratic oligarchy since the victory of Hamilton, representing Northern capital, over populists, Pennsylvania democrats, and Southern agriculturalists. In this scenario, it is not at all accidental that Hamilton was the first Treasury secretary.

As a matter of strategy, it seems to me to be necessary to show a significant number of people that MMT and allies provide the knowledge necessary for reversing this pernicious trend before overreach leads to GDII. I think this means being more frank in telling it like it is politically in addition to focusing on the economics — although I think that a global depression is very likely already baked in, and the best we can do is provide a plan that can be picked up when the smoke settles after Reagan-Thatcherism has finally run its course. But the last mile is closing fast, so there may yet be time.


mike norman said...

Tom, thanks for posting!

Manasia said...

Great Post Tom!

paul meli said...

I hate to agree with something so grim.

mike norman said...


How do we get money out of politics?

beowulf said...

Jim Rogers had a good idea (which lobbyist would hate)-- require congressmen to vote online from their home district.

More on point, law professor Larry Lessig shifted his focus from IP law reform to campaign finance reform a few years ago when he realized that's the bottleneck and he started a group that's pushing for publicly funded elections.

Both Lessig and his "Fix Congress First" partner Mark McKinnon are big fans of former LA Gov. Buddy Roemer, a dark horse GOP candidate for President who's pushing campaign finance reform and who's limiting contributions to $100.

I like the guy but I'd hate to see Roemer get in-paradigm on economics anytime soon. Any GOP voter not already turned off by his political reform crazytalk would become a lost cause if Roemer (or any Republican in this environment) started talking about how the deficit is too small. :o)

Tom Hickey said...

"How do we get money out of politics?"

The surest way that can not be eroded is a constitutional amendment. Anything short of this will be incrementally neutralized and then disassembled.

Anti said...

Unfortunately, I won't be surprised if all of this is true. I agree that we need a Constitutional amendment that forbids the wealthy from buying politicians.

Matt Franko said...

"require congressmen to vote online from their home district."

Could cause a problem for Paul Ryan's palate...does anybody believe you could even find a $350 bottle of wine in Waukesha ?

Anonymous said...

Tom has become the ideological front man for MMT.

Anthony said...

The New Deal also pitted nineteenth-century, labor-intensive industries like steel, coal, and textiles, against newer, consumer-oriented industries and like-minded bankers (such as Winthrop Aldrich). The former wanted to screw down labor and cut costs, while the latter favored higher wages, adopted a softer attitude toward unions, and generally wanted to turn workers into customers and/or property owners. That there were corporate types on both sides is, of course, often lost on the Reagan-Thatcherites, who want to dismantle the New Deal while recreating the conditions that led to it in the first place. I commend a handy collection of essays by Gerstle and Fraser titled "The Rise and Fall of the New Deal Order" for those who wish to read further. Looking at the New Deal in this light raises the question of where MMT can go to find allies in the business community.

Anonymous said...

"There can be no doubt that it is being used to impose political and economic change that polls show the overwhelming majority opposes."

As far as I know polls show a majority in favor of reining in government spending so I'm not clear what it is the overwhelming majority opposes in your reference above.

Of course when you get specific on cuts, the numbers change.

Anti said...

Americans not currently receiving Medicare or Social Security benefits are apparently stupid enough to fail to realize that, if they're may age(35)their parents may shortly move in with them if Republicans get their way enough, or that they will have to move in with their kids if they're my parents age. Too many of those just trying to enter the workforce may never leave their parents' homes in the first place, the way things are going.

Of course, they'll all be paying the same payroll taxes though, after these temporary cuts expire.

Leverage said...

Please, think politically, because like any depression this is time of political conflict.

Let tea nuts have their little default, if good in the long run. Remember: the western world now is in a fight for a political regime change, it is about democracy surviving and MORE democracy or about the end of democracy and the rise of oligarchy for final (the European Empire controlled by oligarchs and ‘technocrats’ and the same in USA) control.

A short default and all the damage it would cause to the people is preferable now than later. A gradual degradation of the economy may destroy output capacity and make the government so dysfunctional that eventually a currency collapse could happen (that’s what Tea Party “hard money” nuts and some oligarchs want). So close-down the goverment, cut spending and let the world economy bunk a bit.

And then Tea Party and all the retarded free market fundamentalist will be gone for good for a while, hopefully the banks will fall too and we can get real political reform and decent economic policy going.

Some damage now could be better for the future than continue slowly killing thee world economy.


Is not only destruction of output that would have to happen but other things [for hyperinflation]. For example a drop in necessary inputs because of an increase in prices (gradual depreciation of the currency), eg. oil. And a lose of confidence in USA political system (which I agree tho, that a temporal damage could be counter-productive to the credit of USA government too, there is a risk that this may offset long term gains).

I think something of this sort could be seen in my own country or in some other periphery nations of Europe (Greece) if there was a sudden exit of the euro right now, with extreme balance of trade deficits and goods and huge internal problems (for example raising unemployment which would be politically unstabilizing).

But ultimately it wouldn't be an economical issue but a political issue: with government in disarray and desperate dysfunctional system (for example the rejection to pay taxes by a part of the population).

yes I know it looks like a doomsday scenario, but if you add cost-push inflation, unbalances and a depression which has just started; the erosion of the system could go for years. A sudden shock right now could be for the good or for the bad: 1) either it wakes up policy makers and enforces the governments to do something and reform the system; or b) it's used 'shock doctrine' style to advance the agenda of undercover anarcho-capitalists (dismantle the government, social net and taxes) which would lead to conflict in the future and probably collapse, and in any case to a extremly dysfunctional society (ala Mexico).

Check Latino America or Asia of how a 'new normal' can be slowly pushed on the population while it's accepted gradually. This has happened and continues to happen in a lot of places.