Neoliberalism Is A Cancer: Namaste: If Not Now, When? Chapter 24 (Part 2)

Author’s Note: Each chapter of this book can be read as a stand-alone and it is not necessary that they be read in numerical order. All of the previous chapters are posted here and in my Diaries at Firedoglake/MyFDL.

I welcome comments and will respond as time allows. Thanks for reading.

Chapter 24

Neoliberalism Is A Cancer (Part 2)

Friedrich Hayek (1899-1992) revived interest in free market, or neoliberal economics with his best selling book, The Road to Serfdom, which is Amazon’s all time highest selling political book. He wrote it in the 1930s to counter the argument that fascism was capitalism’s last dying gasp.

Hayek was an Austrian and, among other appointments, he taught at the University of Chicago from 1950 to 1962 where he met and no doubt influenced Milton Friedman.

In 1991 President George H. W. Bush awarded Hayek the Presidential Medal of Freedom, one of the two highest civilian awards in the United States, for a “lifetime of looking beyond the horizon.”

Hayek did not believe in democracy. When asked what he thought about the Chilean dictator General Augusto Pinochet, who overthrew and assassinated the popularly elected social democrat President Salvador Allende in 1973 and presided over a 17-year brutal dictatorship that disappeared 3,000 suspected dissenters, Hayek said,

Personally I prefer a liberal dictator to democratic government lacking liberalism. My personal impression — and this is valid for South America – is that in Chile, for example, we will witness a transition from a dictatorial government to a liberal government.

By liberal, of course, he meant free markets liberated from government regulation and oversight.

Milton Friedman (1912-2006) was an even more influential advocate of neoliberal free markets.

He joined the faculty at the University of Chicago in 1946, where he later founded the Chicago School of Economics. He served as Senator Barry Goldwater’s chief economics adviser during Goldwater’s unsuccessful 1964 campaign for President and, after retiring from the University of Chicago in 1977, he served unofficially as Ronald Reagan’s economic adviser during Reagan’s successful campaign for President. During President Reagan’s eight years in office, he served as a member of the President’s Economic Policy Advisory Board.

Hayek and Friedman were anything but liberal, as that term is commonly understood today. Ronald Reagan adored both of them.

Barack Obama, who also taught at the University of Chicago and adores Reagan, is also a neoliberal. He too believes in free markets, including free trade agreements, even though they invariably create jobs in foreign countries at the expense of increasing unemployment here at home. He objects to imposing any restrictions on corporations outsourcing jobs, and he opposes any form of effective regulatory oversight on the banks and insurance companies.

With the single exception of his willingness to bail out failing banks and corporations at taxpayer expense, which is corporate socialism, he has not shown any interest in or support for implementing socialist policies. People who claim he is a communist or a socialist are lying, stupid, or not paying attention.

Walter Benn Michaels, a professor of English at the University of Illinois at Chicago said in the November, 2010 issue of Le Monde,

In reality, there’s nothing the slightest bit socialist about Obamacare, much less about immigration. In fact, unlike the Tea Party, Chicago-school economists identify open borders with free markets and argue that it’s not immigration but “immigration controls” that are “a form of socialist central planning”. Even more to the point, there’s nothing communist about illegal immigration which, from an economic standpoint, is preferable to legal immigration because it “responds to market forces in ways that legal immigration does not” and thus “benefits both the undocumented workers who desire to work… in the US and employers who want flexible, low-cost labour”. So when [Glen]Beck, speaking for all the Tea Partiers, pronounces his judgment – “Immigration good; illegal immigration bad” – he may think he’s opposing communism, but what he’s actually opposing is neoliberalism in its purest form. The thing the Tea Party regards as the greatest threat to capitalism is capitalism itself.

In the name of free trade (cutting labor costs in order to increase profits), which is another neoliberal goal along with free markets, corporations have outsourced more than four million jobs by transferring operations and building new sweat-shop factories in foreign countries where they can and do exploit labor and pollute the environment with impunity. As a result, in Fiscal Year 2010, corporations reported higher profits than ever before. Yet, they paid no taxes on income earned outside the United States and they parked all of that money outside the country in offshore banks.

Meanwhile, there are 29.5 million people in the United States who are unemployed, underemployed, and too discouraged to continue looking for jobs that do not exist.

According to telephone surveys of households back in July 2010, the real unemployment rate was 22% and I suspect it has increased since then. There are not even enough new jobs being created to keep up with the number of new people entering the work force each month.

The unemployment situation is so bad that earlier this year, over one million people applied for 50,000 new jobs advertised by McDonalds.

Businesses are hoarding money and refusing to hire new employees because there is not enough demand for their goods and services to justify the expense.

There is not enough demand because nobody has any money to spend. People do not have money to spend because they are unemployed, underemployed, or afraid they are going to lose their jobs and their homes to Forfeiture Gate.

Therefore, it is unreasonable to believe that the private sector will create jobs.

There is nothing on the horizon that warrants a reasonable belief that the economy is going to improve in the foreseeable future without massive government spending to create jobs.

Nevertheless, Obama is grimly determined not to do that under any circumstances. Instead, he insists on imposing austerity measures to reduce government spending. That means slashing social security, Medicare, and Medicaid. This is another goal of neoliberalism: eliminate the safety net.

There is no credible evidence to support a belief that reducing government spending will do anything except increase unemployment, reduce demand for goods and services, and pitch our economy over the cliff into the abyss with no safety net to break the fall.

Obama has no plan and he is not even working on a real plan to create jobs. As the legendary Dude said in The Big Lebowski,

This aggression will not stand, man.

Cross-Posted at Firedoglake/MyFDL and the Smirking Chimp.

Namaste: If Not Now, When? Is my intellectual property. I retain full rights to my own work. You may copy it and share it with others, but only if you credit me as the author. You may not sell or offer to sell it for any form of consideration. I retain full rights to publication.

My real name is Frederick Leatherman. I was a criminal-defense lawyer for 30 years specializing in death-penalty defense and forensics. I also was a law professor for three years.

Now I am a writer and I haul scrap for a living in this insane land.




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