Why Treasury Secretary Paulson and His Pro-Capitalist Critics are Wrong

Last week, when the Dow plunged on the news that "blue chip" corporations were actually bankrupt because of shady get-rich investments in barely legal (for lack of government regulation) mortgage-related "derivatives" now revealed to be nothing more than pyramid "Ponzi" schemes, the public got a rare peek under the boulder of Wall Street. We saw wriggling under it the vermin in all (or at least some) of their ugliness. As we all now wonder how many more years we will have to work before we can retire with our vanishing 401-K retirement savings (oh, for the days when we used to have real guaranteed pensions), or even if we will ever be able to retire, it is galling to read how Treasury Secretary Henry Paulson (former chief executive of the huge financial firm Goldman Sachs) is orchestrating a "bailout" of the banksters that will entail taxing ordinary Americans to buy the essentially worthless assets of his Wall Street buddies to the tune of--for starters only, mind you--seven hundred billion dollars.

It's funny how, when bankers are in trouble, trillions of our tax dollars are suddenly available to bail them out, but when John Q. Public Senior needs help paying for life-saving medical care or Johnny Q. Public Junior needs help paying for college, well then there is no money to be found (except, of course, for the three trillion dollars to pay for an unjust war on the people of Iraq and Afghanistan.)

Paulson's bailout fails the "smell" test so badly that even staunch pro-capitalist experts are condemning it. For example, a Professor of Entrepreneurship and Finance at the University of Chicago, Luigi Zingales, writes in his "Why Paulson is Wrong":

"The decisions that will be made this weekend matter not just to the prospects of the U.S. economy in the year to come; they will shape the type of capitalism we will live in for the next fifty years. Do we want to live in a system where profits are private, but losses are socialized? Where taxpayer money is used to prop up failed firms? Or do we want to live in a system where people are held responsible for their decisions, where imprudent behavior is penalized and prudent behavior rewarded? For somebody like me who believes strongly in the free market system, the most serious risk of the current situation is that the interest of few financiers will undermine the fundamental workings of the capitalist system. The time has come to save capitalism from the capitalists."

The professor is certainly correct in describing Paulson's plan as one in which "profits are private, but losses are socialized." But the professor is quite wrong in suggesting that the textbook version of free market capitalism, in which, as he puts it, "people are held responsible for their decisions, where imprudent behavior is penalized and prudent behavior rewarded," is an animal that has ever or could ever exist in the real world.

I am reminded here of a passage from a work of fiction (The Illuminatus Trilogy, published in 1975 (p. 551), if you must know) that captures the naiveté of the professor quite deliciously in a scene where a bunch of big bankers (one named Drake), a "dark hawk-faced dago" and a professor are seated at a Council on Foreign Relations banquet:

Somehow the conversation got around to a new book by somebody named Mortimer Adler...One banker type at the table was terribly keen on this Adler..."He says that we and the Communists share the same Great Tradition...and that we must join together against the one force that really does threaten civilization--anarchism!"...

There were several objections...when the hawk-faced dago spoke up suddenly. "I can put the Great Tradition in one word," he said calmly, "Privilege."

Old Drake suddenly stopped looking agreeable-but-bored--he seemed both interested and amused. "One seldom encounters such a refreshing freedom from euphemism," he said, leaning forward. "But perhaps I am reading too much into your remark, sir?"

Hawk-face ...[said] "I think not....Privilege is defined in most dictionaries as a right or immunity giving special favors or benefits to those who hold it. Another meaning in Webster is 'not subject to the usual rules or penalties.' The invaluable thesaurus gives such synonyms as power, authority, birthright, franchise, patent, grant, favor and, I'm sad to say, pretension. Surely, we all know what privilege is in this club, don't we, gentlemen? Do I have to remind you of the Latin roots, privi, private, and lege, law, and point out in detail how we have created our Private Law over here, just as the Politburo have created their own private law in their own sphere of influence?"

"But that's not the Great Tradition," said...the college professor. "What Mr. Adler means by the Great Tradition--"

"What Mortimer means by the Great Tradition," hawk-face interrupted rudely, "is a set of myths and fables invented to legitimize or sugar-coat the institution of privilege. Correct me if I'm wrong," he added more politely but with a sardonic grin.

"He means," the true beliver said, "the undeniable axioms, the time-tested truths, the shared wisdom of the ages, the ..."

"The myths and fables," hawk-face contributed gently.

"The sacred, time-tested wisdom of the ages," the other went on, becoming redundant. "The basic bedrock of civil society, of civilization. And we do share that with the Communists. And it is just that common humanistic tradition that the young anarchists, on both sides of the Iron Curtain, are blaspheming, denying and trying to destroy. It has nothing to do with privilege at all."

"Pardon me," the dark man said. "Are you a college professor?"

"Certainly. I'm head of the Political Science Department at Harvard!"

"Oh," the dark man shrugged. "I'm sorry for talking so bluntly before you. I thought I was entirely surrounded by men of business and finance."...

Drake interrupted. "Quite so. No need to shock our paid idealists and turn them into vulgar realists overnight. At the same time, is it absolutely necessary to state what we all know in such a manner as to imply a rather hostile and outside viewpoint? Who are you and what is your trade, sir?"

Quite so, indeed. Contrary to the "paid idealists" of the punditry, capitalism is not simply an economic system. It is a system of elite social control; an integral part of capitalism is its set of ideas--its ideology--that privileged elites use to defend and rationalize their privilege, and to confuse and demoralize the great mass of unprivileged. Part of the capitalist ideology is the myth that it is a system in which "people are held responsible for their decisions, where imprudent behavior is penalized and prudent behavior rewarded." To say that "capitalism needs to be saved from the capitalists" is to confuse the myth with the reality. It is as naive as a person in feudal times, alarmed at social upheavals resulting from the aristocracy's excessive greed, calling for feudalism to be saved from the aristocracy, as if feudalism were not, itself, a system of aristocratic privilege.

For most of the history of capitalism working people had to work until they died. The idea of being able to retire was won by class struggle. In the years prior to World War II the American working class took the offensive with a wave of mass strikes, including a general strike in Seattle and the great sit-down strikes in auto, that forced the ruling elite to send federal troops to numerous states to counter attack violently; Franklin Roosevelt's New Deal, with its novel reforms like Social Security, was aimed at convincing American workers to step back from the revolutionary course they were on. The capitalists are now evidently trying to take back what they grudgingly were forced to give in prior decades. Paulson's and his buddies' destruction of our retirements and their lowering of our standard of living and our expectations are not a departure from "true capitalism" but rather the very essence of capitalism. They are entirely in the spirit of the "Great Tradition."

Sick of McCainObama fake democracy? Read what people did once in a real democracy.

With all of the fake democracy election hoopla going on in the United States now, it is important to put it in perspective by contrasting the lies and distractions and hype of our politicians with what real democracy looks like. One way to do this is to take a look at some descriptions of what ordinary people--workers in the cities and peasants in the countryside--actually did when they were, for a brief time, in control and able to take things into their own hands. I am referring to the period 1936-9 in Spain when workers and peasants rose up in a sweeping social revolution, defeated the capitalists in two provinces and began profoundly transforming society until they were defeated by Franco's fascists with help from capitalist governments and Stalin.

This site has links to many relevant articles. The two urls below are good ones. I have copied the text from the first one, by George Orwell, below, to whet your appetite.

(The revolutionary leaders in Spain were anarchists and this is an anarchist site. Anarchism, as a revolutionary ideology distinct from Marxism, must be considered a work in progress. By 1937 some anarchists in Spain had come to the conclusion that the principle of "No State" was problematic because in practice it prevented the anarchists from taking the steps that could have defeated the forces that ultimately crushed the Spanish revolution. But that is for another day.)

http://flag.blackened.net/liberty/spunk/Spunk198.html (by George Orwell, describing Barcelona, 1936, copied below)

http://flag.blackened.net/revolt/ws99/ws56_spain.html (descriging the rural collectives)

Jimmy Carter: Friend or Wolf in Sheep's Clothing?

As reported in the Jewish Daily Forward, Jimmy Carter was sidelined at the Democratic Convention in Denver, presumably because of his outspoken criticism of Israel in his book Palestine Peace not Apartheid.

To those of us who are working to abolish Zionism (i.e. the ethnic cleansing of non-Jews from their native home in Palestine in order to make Israel a Jewish state based on an exclusively Jewish sovereignty and at least an 80% Jewish population) this raises a question: Is Jimmy Carter our friend or our foe? Does his use of the word "apartheid" to describe Israel's occupation--something no other establishment American politician has ever done--mean that Carter, unlike all the others, is our friend, helping us to turn U.S. public opinion against our government's pro-Israel foreign policy? Or is he pretending to be our friend--and agreeing to be sidelined at events like the Democratic Convention in order to make his friendship more credible--because he is really a wolf in sheep's clothing?

To answer this question, let's first ask how one can distinguish, among people like Jimmy Carter whose influence is in the realm of ideas, friends from foes of the anti-Zionist struggle. The most important criterion is this: do they help people understand clearly those things that are required for the movement to prevail, or do they help the movement's enemies spread and reinforce the lies that prevent the movement from succeeding? The reason this is the most important criterion is that the only real strength of any movement against elite power (of which Zionism is one manifestation) comes from lots and lots of people being very clear about what they want and who are their allies and enemies in the struggle to get it. Absent this clarity, we are powerless to stand up against Zionism or any other version of elite rule. History shows that mass movements against elite power fail when they lack this clarity. They are easily duped by elites into siding with their enemies and attacking their allies or potential allies.

I believe Carter is our foe. In spite of his criticism of Israel, Carter still is reinforcing the basic premises of Zionism. I understand that this seems like a harsh thing to say about a man who has, since leaving the Oval Office, written a book very critical of Israel and been verbally attacked by Zionists and sidelined at the Democratic Convention for it. And it is true that Carter in recent years has gained a reputation for being genuinely on the side of democracy because of his efforts to monitor elections in many countries and expose election fraud. But even the seemingly benign activities of President Carter's are directed toward reinforcing elite power.

Perhaps because he was followed by President Reagan, Carter is remembered by many people in a kind of rosy glow. In fact the Carter presidency prepared the sustained attack on working people in the United States and abroad, which the Reagan-Bush-Clinton-Bush presidencies embodied.

Carter is Pro-Zionist and Spreads Zionist Lies

Jimmy Carter is pro-Zionist. In his book and subsequent speeches, Carter never says that there is anything wrong with the Zionist project of making 78% of Palestine a state (Israel) in which the sovereign authority is "the Jewish people" as is asserted in Israel's Declaration of the Establishment of the State of Israel. Note that "the Jewish people" excludes 20% of current Israeli citizens, and includes millions of Jews who have never been in, and have no intention of ever going to, Israel.

Nor does Carter ever say there is anything wrong with Israel's policy of ethnic cleansing, in particular its refusal to allow the Palestinian refugees to return to their country inside what is now called Israel. As any person at all familiar with the Israel/Palestine conflict knows, Israel's denial of the Palestinians' right of return--an individual right enshrined in Article 13b of the United Nations Universal Declaration of Human Rights, a right that cannot be waived for an individual by any third body, and a right that has nothing whatsoever to do with who has sovereign authority over what geographical area--is the central grievance of Palestinians against the state of Israel. Carter's position on the right of return is, as he expressed it in his book's section on the Geneva Initiative that he helped write, that there should be a "limited right of return of Palestinians." To put this word "limited" in its true perspective, imagine the outrage that would be hurled at Carter by world leaders and pundits if Carter had suggested that there should be a "limited right of return" to Germany of Jews who left Germany to flee from the Nazis!

The denial to Palestinians, at least four million refugees, of their unconditional right of return is the central and key grievance driving the Israel/Palestine conflict. A public opinion poll conducted in 2006 by the Center for Opinion Polls and Survey Studies at An-Najah National University found that 92.1% of the Palestinian public strongly support the right of return. Yet Carter, a man arguably as familiar with the conflict as anybody on the planet, writes in his book:

"The root causes of the conflict--occupation of Arab land, mistreatment of the Palestinians, and acceptance of Israel within its legal borders--are yet to be addressed."

Carter knows full well that "acceptance of Israel within its legal borders" means acceptance of a state defined as a Jewish state based on an exclusively Jewish sovereignty and dependent on the denial of the right of return of Palestinians (i.e. ethnic cleansing) to prevent the Israeli population from ever becoming less than 80% Jewish. Carter even denies that Palestinians care about the right of return, stating in his book (pg. 167) that,

"An overwhelming number of both Israelis and Palestinians want a durable two-state solution, based on well-known criteria that have been spelled out in the Quartet's Roadmap and are compatible with the Geneva Initiative."

The Roadmap, however, never mentions the right of return; the closest it comes to dealing with the central grievance of Palestinians is a passing reference to the refugees as one of many issues that "will also be addressed."

Carter, like many other "Left" Zionists, believes that the way to make Israel secure, based as it is on ethnic cleansing, is to end the Israeli occupation of the 22% of Palestine outside of Israel's 1948 boundary, allow the Palestinians to declare that remainder of Palestine a "Palestinian state," and get the Palestinians to accept the permanence of the denial of their right of return and the existence of "Israel within its legal borders." Zionists call this "Land for Peace."

Even the most right wing Zionists, however, like Israel's current prime minister Ehud Olmert, also embrace the "Land for Peace" framework rhetorically, albeit without the same passion as the "Left" Zionists. President George W. Bush also embraces it. As does Palestinian "President" Mahmoud Abbas, and yes, even Hamas. They all talk about "Land for Peace" instead of Right of Return because all of these ruling elites share a fundamental common interest. For all of them, their ability to rule over and dominate "their own" people is strengthened when "their own" people view them as protectors against a foreign enemy.

The "Land for Peace" framework reinforces this elite-friendly view by saying that the central conflict is between Jews versus non-Jews, not between ordinary people versus ruling elites, and that the solution is for the Jews and non-Jews to be separated because they are natural enemies of each other. In this framework, ordinary people are relegated to the role of a passive audience, hoping one day to have a "state of their own" ruled by wealthy elites as usual, with borders determined by an agreement between all of the elite players.

In contrast to the "Land for Peace" framework, the "Right of Return" framework says that the conflict is between those who want equality for all regardless of their ethnicity--a value shared by most ordinary people no matter what their religion--versus those who want inequality enforced by ethnic cleansing. The only way to successfully win the right of return is, as I have discussed elsewhere, to build a revolutionary mass movement against Zionism that champions working class values of equality and democracy against the elite's opposite values. The "Right of Return" framework thus threatens all of the elites.

Carter spreads pro-Zionist views that are perfectly consistent with the likes of George W. Bush and Ehud Olmert, and his "Land for Peace" framework strengthens elite rule in the region. Friends don't do this.

Why Carter's Monitoring of Elections is Not Really a Friendly Act

Jimmy Carter has gained fame as a foe of election fraud and a friend of democracy by monitoring elections around the world. Who does this actually help? Clearly, it helps those who rely on such elections to confer legitimacy on their rule.

In the United States the American plutocracy has learned how to manipulate the electoral system to place its obedient servants, like Carter, Clinton, Bush, McCain and Obama, in the Oval Office, and their trusted executives like Defense Secretary Robert Gates in top policy-making positions. Both major parties are funded and controlled by the plutocracy, so it doesn't make that much difference which candidate wins.

Al Gore and John Kerry, for example, had they won the presidency, would likely have carried out aggression in the name of fighting terrorism no less than George W. Bush. The evidence does not support the often-made claim that George W. Bush was a maverick or loose canon or installed as part of a cabal, and that his warmongering reflected only a tiny faction in the larger corporate/government elite. Were this the case, then the Democratic Party and the mass media would have opposed his invasion of Iraq with the kind of forcefulness that they used to unseat President Nixon after Watergate. But the opposite occurred. The Democratic Party was the majority in the Senate on the eve of Bush's invasion of Iraq and Democratic leaders had access to government officials who were saying at the time that Bush's pretexts for the invasion were lies. Yet they never lifted a finger to expose the lies or stop the invasion with their control of the purse strings. Likewise, the corporate-controlled media played dumb. This reflects a broad consensus among the elite that it was time to start a war on terror. The lack of any real difference between the two parties is also evident from the fact that Democrats like Obama and Clinton today have declared their willingness to attack Iran for reasons as bogus as Iraq's WMD, even threatening to drop nuclear bombs on the Iranian people.

Given their control of the major political parties, the only thing about the elections that truly matters to the ruling plutocracy is that the government is perceived as legitimate because the election is perceived as "fair." America's ruling class likes this method of rule and encourages rulers in foreign nations to adopt it. This is the meaning of our government's claim to be "spreading democracy."

Jimmy Carter, not surprisingly, agrees. By monitoring elections in places like Liberia, Carter praises ruling regimes that successfully mimic the American method of conferring legitimacy on elite rule, and he gently embarrasses those elites who botch the job by having to resort to transparently unfair election fraud.

Real democracy, contrary to Carter's definition, means ordinary people shaping society by their values. Real democracy is when ordinary people on the job, not corporate CEOs beholden to rich investors, make the decisions about how and for what purpose they will labor. Real democracy is when peasants and other rural workers, not large landowners, decide how to share the land and how to use it to produce crops or tap natural resources in order to benefit ordinary people. Fake democracy is when people get to vote and the votes are accurately counted, but the winning politicians inevitably work to prevent real democracy from happening.

There Is No Evidence That Carter Has Turned a New Leaf

As President, Carter claimed to be fighting for human rights around the world. The reality was exactly the opposite, with his sending the Contras to terrorize the people of Nicaragua being typical of his foreign policy. As a former president, Carter remains active on the world scene through his Carter Center that, in its own words, is "waging peace, fighting disease, building hope" and "resolving conflicts, strengthening democracy, and advancing human rights worldwide." Given Carter's heinous past, however, isn't a healthy dose of skepticism in order here? We've already seen how Carter "advances human rights" in Palestine by rejecting the human right of return for Palestinians even though it is the central issue in the conflict that Carter pretends to want to solve so badly. We've also seen how the "new" Carter lies for the elite. He tells people that anti-democratic elites are democratic because they count the votes fairly. He tells people that the U.S. government is a force in the world for democracy and human rights. He tells Americans that Palestinians have no valid reason to object to the existence of a Jewish state in Palestine, thereby reinforcing the propaganda claiming that Palestinians who fight against the existence of Israel are irrational hateful terrorists. This is exactly the lie the plutocracy uses to conjure up the image of "terrorism" that makes the War on Terror seem like it is about protecting Americans when in fact it is a method the plutocracy uses to control Americans with politicians like Bush and Obama and McCain posing as our protectors against terrorism.

If Carter had truly done a 180 degree turnaround from his days as President when he trampled on people's human rights, then he would be telling the public that he had indeed made a 180 degree turn. He would be explaining why what he had done in the past was wrong, and why what he is doing now is very different. Furthermore, if he had genuinely "switched sides" from the elite he once served to ordinary people, he would be informing the public what he learned when he served the corporate elite--how they lie about the real aims of their policies, which are intended to control people, not make life better for people. But he doesn't. The explanation for Carter's deafening silence here is, of course, that he has not switched sides at all. His past and his present roles are the same--he helps the elite to stay in power, by brute force when he was president and with lies afterwards.

Jimmy Carter rose suddenly from obscurity to become President because the Rockefeller-controlled Trilateral Commission wanted him to be president, to carry out its policies. The plutocracy appreciated his role in the past and it is not unlikely that it appreciates Carter using the word "apartheid" in his book title today. It's not that the plutocracy wants people rising up against apartheid. On the contrary. They want this dangerous word rendered less effective as a word that can rally people against Zionism. Carter neutralizes the dangerous word "apartheid" by posing as a champion of Palestinian victims of apartheid, but defining "apartheid" to mean not the official discrimination against non-Jews that is the essence of the state of Israel itself, but rather the wrongful occupation of foreign land by Israel--a state that Carter insists has every right to exist even though (as Carter does not admit) the basis of its existence--that it is a state only of the Jewish people and that it requires ethnic cleansing to exist--is anti-democratic to the core. Carter could never have succeeded so effectively in his effort to detach the word "apartheid" from the reality of its being an apt description of the state of Israel per se, if he hadn't developed his reputation for being a critic of Israel.