America Is Regressing into a Developing Nation for Most People

BOOKS
A new book reveals that the U.S. is becoming two distinct countries, with separate economies, politics and opportunities.

Photo Credit: Shutterstock

This post originally appeared on the blog of the Institute for New Economic Thinking.

You’ve probably heard the news that the celebrated post-WW II beating heart of America known as the middle class has gone from “burdened,” to “squeezed” to “dying.” But you might have heard less about what exactly is emerging in its place.

In a new book, The Vanishing Middle Class: Prejudice and Power in a Dual Economy, Peter Temin, professor emeritus of economics at MIT, draws a portrait of the new reality in a way that is frighteningly, indelibly clear: America is not one country anymore. It is becoming two, each with vastly different resources, expectations and fates.

Two roads diverged

In one of these countries live members of what Temin calls the “FTE sector” (named for finance, technology and electronics, the industries that largely support its growth). These are the 20 percent of Americans who enjoy college educations, have good jobs and sleep soundly knowing that they have not only enough money to meet life’s challenges, but also social networks to bolster their success. They grow up with parents who read books to them, tutors to help with homework and plenty of stimulating things to do and places to go. They travel in planes and drive new cars. The citizens of this country see economic growth all around them and exciting possibilities for the future. They make plans, influence policies and count themselves lucky to be Americans.

The FTE citizens rarely visit the country where the other 80 percent of Americans live: the low-wage sector. Here, the world of possibility is shrinking, often dramatically. People are burdened with debt and anxious about their insecure jobs if they have a job at all. Many of them are getting sicker and dying younger than they used to. They get around by crumbling public transport and cars they have trouble paying for. Family life is uncertain here; people often don’t partner for the long-term even when they have children. If they go to college, they finance it by going heavily into debt. They are not thinking about the future; they are focused on surviving the present. The world in which they reside is very different from the one they were taught to believe in. While members of the first country act, these people are acted upon.

The two sectors, notes Temin, have entirely distinct financial systems, residential situations and educational opportunities. Quite different things happen when they get sick or when they interact with the law. They move independently of each other. Only one path exists by which the citizens of the low-wage country can enter the affluent one, and that path is fraught with obstacles. Most have no way out.

The richest large economy in the world, says Temin, is coming to have an economic and political structure more like a developing nation. We have entered a phase of regression and one of the easiest ways to see it is in our infrastructure: our roads and bridges look more like those in Thailand or Venezuela than the Netherlands or Japan. But it goes far deeper than that, which is why Temin uses a famous economic model created to understand developing nations to describe how far inequality has progressed in the United States. The model is the work of West Indian economist W. Arthur Lewis, the only person of African descent to win a Nobel Prize in economics. For the first time, this model is applied with systematic precision to the U.S.

The result is profoundly disturbing.

In the Lewis model of a dual economy, much of the low-wage sector has little influence over public policy. Check. The high-income sector will keep wages down in the other sector to provide cheap labor for its businesses. Check. Social control is used to keep the low-wage sector from challenging the policies favored by the high-income sector. Mass incarceration: check. The primary goal of the richest members of the high-income sector is to lower taxes. Check. Social and economic mobility is low. Check.

In the developing countries Lewis studied, people try to move from the low-wage sector to the affluent sector by transplanting from rural areas to the city to get a job. Occasionally it works; often it doesn’t. Temin says that today in the U.S., the ticket out is education, which is difficult for two reasons: you have to spend money over a long period of time, and the FTE sector is making those expenditures more and more costly by defunding public schools and making policies that increase student debt burdens.

Getting a good education, Temin observes, isn’t just about a college degree. It has to begin in early childhood, and you need parents who can afford to spend time and resources all along the long journey. If you aspire to college and your family can’t make transfers of money to you on the way, well, good luck to you. Even with a diploma, you will likely find that high-paying jobs come from networks of peers and relatives. Social capital, as well as economic capital, is critical, but because of America’s long history of racism and the obstacles it has created for accumulating both kinds of capital, black graduates often can only find jobs in education, social work, and government instead of higher-paying professional jobs like technology or finance— something most white people are not really aware of. Women are also held back by a long history of sexism and the burdens — made increasingly heavy — of making greater contributions to the unpaid care economy and lack of access to crucial healthcare.

How did we get this way?

What happened to America’s middle class, which rose triumphantly in the post-World War II years, buoyed by the GI bill, the victories of labor unions and programs that gave the great mass of workers and their families health and pension benefits that provided security?

The dual economy didn’t happen overnight, says Temin. The story started just a couple of years after the ’67 Summer of Love. Around 1970, the productivity of workers began to get divided from their wages. Corporate attorney and later Supreme Court Justice Lewis Powell galvanized the business community to lobby vigorously for its interests. Johnson’s war on poverty was replaced by Nixon’s war on drugs, which sectioned off many members of the low-wage sector, disproportionately black, into prisons. Politicians increasingly influenced by the FTE sector turned from public-spirited universalism to free-market individualism. As money-driven politics accelerated (a phenomenon explained by the Investment Theory of Politics), leaders of the FTE sector became increasingly emboldened to ignore the needs of members of the low-wage sector, or even to actively work against them.

America’s underlying racism has a continuing distorting impact. A majority of the low-wage sector is white, with blacks and Latinos making up the other part, but politicians learned to talk as if the low-wage sector is mostly black because it allowed them to appeal to racial prejudice, which is useful in maintaining support for the structure of the dual economy — and hurting everyone in the low-wage sector. Temin notes that “the desire to preserve the inferior status of blacks has motivated policies against all members of the low-wage sector.”

Temin points out that the presidential race of 2016 both revealed and amplified the anger of the low-wage sector at this increasing imbalance. Low-wage whites who had been largely invisible in public policy until recently came out of their quiet despair to be heard. Unfortunately, present trends are not only continuing, but also accelerating their problems, freezing the dual economy into place.

What can we do?

We’ve been digging ourselves into a hole for over 40 years, but Temin says we know how to stop digging. If we spent more on domestic rather than military activities, then the middle class would not vanish as quickly. The effects of technological change and globalization could be altered by political actions. We could restore and expand education, shifting resources from policies like mass incarceration to improving the human and social capital of all Americans. We could upgrade infrastructure, forgive mortgage and educational debt in the low-wage sector, reject the notion that private entities should replace democratic government in directing society, and focus on embracing an integrated American population. We could tax not only the income of the rich, but also their capital.

The cost of not doing these things, Temin warns, is incalculably high, and even the rich will end up paying for it.

“Look at the movie Hidden Figures,” he says. “It recounts a very dramatic story about three African-American women condemned to have a life of not being paid very well teaching in black colleges, and yet their fates changed when they were tapped by NASA to contribute to space exploration. Today we are losing the ability to find people like that. We have a structure that predetermines winners and losers. We are not getting the benefits of all the people who could contribute to the growth of the economy, to advances in medicine or science which could improve the quality of life for everyone — including some of the rich people.”

Along with Thomas Piketty, whose Capital in the Twenty-First Century examines historical and modern inequality, Temin’s book has provided a giant red flag, illustrating a trajectory that will continue to accelerate as long as the 20 percent in the FTE sector are permitted to operate a country within America’s borders solely for themselves at the expense of the majority. Without a robust middle class, America is not only reverting to developing-country status, it is increasingly ripe for serious social turmoil that has not been seen in generations.

A dual economy has separated America from the idea of what most of us thought the country was meant to be.

Lynn Parramore is contributing editor at AlterNet. She is cofounder of Recessionwire, founding editor of New Deal 2.0, and author of “Reading the Sphinx: Ancient Egypt in Nineteenth-Century Literary Culture.” She received her Ph.D. in English and cultural theory from NYU, and she serves on the editorial board of Lapham’s Quarterly. Follow her on Twitter @LynnParramore. 

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Ayn Rand Rules the World: How She Conquered Silicon Valley—and Donald Trump

THE RIGHT WING
Decades after her death, the novelist is guiding America’s power brokers, from San Francisco to Washington, D.C.

Ayn Rand
Photo Credit: YouTube Screengrab

As they plough through their GCSE revision, UK students planning to take politics A-level in the autumn can comfort themselves with this thought: come September, they will be studying one thinker who does not belong in the dusty archives of ancient political theory but is achingly on trend. For the curriculum includes a new addition: the work of Ayn Rand.

It is a timely decision because Rand, who died in 1982 and was alternately ridiculed and revered throughout her lifetime, is having a moment. Long the poster girl of a particularly hardcore brand of free-market fundamentalism – the advocate of a philosophy she called “the virtue of selfishness” – Rand has always had acolytes in the conservative political classes. The Republican speaker of the US House of Representatives, Paul Ryan, is so committed a Randian, he was famous for giving every new member of his staff a copy of Rand’s gargantuan novel, Atlas Shrugged (along with Freidrich Hayek’s Road to Serfdom). The story, oft-repeated, that his colleague in the US Senate, Rand Paul, owes his first name to his father Ron’s adulation of Ayn (it rhymes with “mine”) turns out to be apocryphal, but Paul describes himself as a fan all the same.

Not to be left out, Britain’s small-staters have devised their own ways of worshipping at the shrine of Ayn. Communities secretary Sajid Javid reads the courtroom scene in Rand’s The Fountainhead twice a year and has done so throughout his adult life. As a student, he read that bit aloud to the woman who is now his wife, though the exercise proved to be a one-off. As Javid recently confessed to the Spectator, she told him that if he tried that again, he would get dumped. Meanwhile, Daniel Hannan, the Tory MEP many see as the intellectual architect of Brexit, keeps a photograph of Rand on his Brussels desk.

So the devotion of Toryboys, in both their UK and US incarnations, is not new. But Rand’s philosophy of rugged, uncompromising individualism – of contempt for both the state and the lazy, conformist world of the corporate boardroom — now has a follower in the White House. What is more, there is a new legion of devotees, one whose influence over our daily lives dwarfs that of most politicians. They are the titans of tech.

So who is this new entrant on the A-level syllabus, the woman hailed by one biographer as the goddess of the market? Born Alisa Zinov’yevna Rosenbaum in 1905 in St Petersburg, Russia, she saw her father impoverished and her family driven to the brink of starvation by the Soviet revolution, an experience that forged her contempt for all notions of the collective good and, especially, for the state as a mechanism for ensuring equality.

An obsessive cinemagoer, she fled to the US in 1926, swiftly making her way to Hollywood. She paid her way through a series of odd jobs, including a stint in the costume department of RKO Pictures, and landed a role as an extra in Cecil B DeMille’s The King of Kings. But writing was her passion. Broadway plays and movie scripts followed, until the breakthrough came with a novel: The Fountainhead.

Published in 1943, it tells the story of Howard Roark, an architect dedicated to the pursuit of his own vision – a man who would rather see his buildings dynamited than compromise on the perfection of his designs. All around him are mediocrities, representing either the dead hand of the state, bureaucrats serving some notional collective good, or “second handers” – corporate parasites who profit from the work and vision of others.

Then, in 1957, came Atlas Shrugged, whose Penguin Classic edition stretches to 1,184 pages. Here Roark gives way to John Galt, another capitalist genius, who leads a strike by the “men of talent” and drive, thereby depriving society of “the motor of the world”.

In those novels, and in the essays and lectures she turned to afterwards, Rand expounded – at great and repetitive length – her philosophy, soon to be taught to A-level students alongside Hobbes and Burke. Objectivism, she called it, distilled by her as the belief that “man exists for his own sake, that the pursuit of his own happiness is his highest moral purpose, that he must not sacrifice himself to others, nor sacrifice others to himself”. She had lots to say about everything else too – an avowed atheist, she was dismissive of any knowledge that was not rooted in what you could see in front of your eyes. She had no patience for “instinct” or “‘intuition’ … or any form of ‘just knowing’”.

The Fountainhead was serially rejected and published to ambivalent reviews, but it became a word-of-mouth hit. Over the coming years, a cult following arose around Rand (as well as something very close to an actual cult among her inner circle, known, no doubt ironically, as the Collective). Her works struck a chord with a particular kind of reader: adolescent, male and thirsting for an ideology brimming with moral certainty. As the New Yorker said in 2009: “Most readers make their first and last trip to Galt’s Gulch – the hidden-valley paradise of born-again capitalists featured in Atlas Shrugged, its solid-gold dollar sign standing like a maypole – sometime between leaving Middle-earth and packing for college.”

But for some, objectivism stuck. Perhaps her most significant early follower was Alan Greenspan, later to serve as chairman of the US Federal Reserve for 19 years. In the 1950s, Greenspan was one of the Collective, and he would be among the mourners at her funeral in 1982, where one floral wreath was fashioned into that same 6ft dollar sign, now understood to be the logo of Randism.

Greenspan is the link between the original Rand cult and what we might think of as the second age of Rand: the Thatcher-Reagan years, when the laissez-faire, free-market philosophy went from the crankish obsession of rightwing economists to the governing credo of Anglo-American capitalism. Greenspan, appointed as the US’s central banker by Ronald Reagan in 1987, firmly believed that market forces, unimpeded, were the best mechanism for the management and distribution of a society’s resources. That view – which Greenspan would rethink after the crash of 2008-9 – rested on the assumption that economic actors behave rationally, always acting in their own self-interest. The primacy of self-interest, rather than altruism or any other nonmaterial motive, was, of course, a central tenet of Randian thought.

Put more baldly, the reason why Republicans and British Conservatives started giving each other copies of Atlas Shrugged in the 80s was that Rand seemed to grant intellectual heft to the prevailing ethos of the time. Her insistence on the “morality of rational self-interest” and “the virtue of selfishness” sounded like an upmarket version of the slogan, derived from Oliver Stone’s Wall Street, that defined the era: greed is good. Rand was Gordon Gekko with A-levels.

The third age of Rand came with the financial crash and the presidency of Barack Obama that followed. Spooked by the fear that Obama was bent on expanding the state, the Tea Party and others returned to the old-time religion of rolling back government. As Rand biographer Jennifer Burns told Quartz: “In moments of liberal dominance, people turn to her because they see Atlas Shrugged as a prophecy as to what’s going to happen if the government is given too much power.”

In that context, it seemed only natural that one of the success stories of the 2012 presidential campaign was a bid for the Republican nomination by the ultra-libertarian and Rand-admiring Texas congressman Ron Paul, father of Senator Rand Paul, whose insurgent movement was a forerunner for much of what would unfold in 2016. Paul offered a radical downsizing of the federal government. Like Ayn Rand, he believed the state’s role should be limited to providing an army, a police force, a court system – and not much else.

But Rand presented a problem for US Republicans otherwise keen to embrace her legacy. She was a devout atheist, withering in her disdain for the nonobjectivist mysticism of religion. Yet, inside the Republican party, those with libertarian leanings have only been able to make headway by riding pillion with social conservatives and, specifically, white evangelical Christians. The dilemma was embodied by Paul Ryan, named as Mitt Romney’s running mate in the 2012 contest. Ryan moved fast to play down the Rand influence, preferring to say his philosophy was inspired by St Thomas Aquinas.

What of the current moment, shaping up to be the fourth age of Rand? The Randian politicians are still in place: Ryan is now boosted by a cabinet crammed with objectivists. Secretary of state Rex Tillerson named Atlas Shrugged as his favourite book, while Donald Trump’s first choice (later dropped) as labor secretary, Andy Puzder, is the CEO of a restaurant chain owned by Roark Capital Group – a private equity fund named after the hero of The Fountainhead. CIA director Mike Pompeo is another conservative who says Atlas Shrugged “really had an impact on me”.

Of course, this merely makes these men like their boss. Trump is notoriously no reader of books: he has only ever spoken about liking three works of fiction. But, inevitably, one of them was The Fountainhead. “It relates to business, beauty, life and inner emotions. That book relates to … everything,” he said last year.

Rand scholars find this affinity of Trump’s puzzling. Not least because Trump’s offer to the electorate in 2016 was not a promise of an unfettered free market. It was a pledge to make the US government an active meddler in the market, negotiating trade deals, bringing back jobs. His public bullying of big companies – pressing Ford or the air-conditioner manufacturer Carrier to keep their factories in the US – was precisely the kind of big government intrusion upon the natural rhythms of capitalism that appalled Rand.

Which brings us to the new wave of Randians, outside both politics and conventional conservatism. They are the princes of Silicon Valley, the masters of the start-up, a cadre of young Roarks and Galts, driven by their own genius to remake the world and damn the consequences.

So it should be no surprise that when Vanity Fair surveyed these tycoons of the digital age, many of them pointed to a single guiding star. Rand, the magazine suggested, might just be “the most influential figure in the industry”. When the CEO of Uber, Travis Kalanick, had to choose an avatar for his Twitter account in 2015, he opted for the cover of The Fountainhead. Peter Thiel, Facebook’s first major investor and a rare example of a man who straddles both Silicon Valley and Trumpworld, is a Randian. Meanwhile, Steve Jobs is said by his Apple co-founder, Steve Wozniak, to have regarded Atlas Shrugged as one of his “guides in life”.

Among these new masters of the universe, the Rand influence is manifest less in party political libertarianism than in a single-minded determination to follow a personal vision, regardless of the impact. No wonder the tech companies don’t mind destroying, say, the taxi business or the traditional news media. Such concerns are beneath the young, powerful men at the top: even to listen to such concerns would be to betray the singularity of their own pure vision. It would be to break Rand’s golden rule, by which the visionary must never sacrifice himself to others.

So Rand, dead 35 years, lives again, her hand guiding the rulers of our age in both Washington and San Francisco. Hers is an ideology that denounces altruism, elevates individualism into a faith and gives a spurious moral licence to raw selfishness. That it is having a moment now is no shock. Such an ideology will find a ready audience for as long as there are human beings who feel the rush of greed and the lure of unchecked power, longing to succumb to both without guilt. Which is to say: for ever.

 

 

 

 

 

Jonathan Freedland writes a weekly column for the Guardian. He is also a regular contributor to the New York Times and the New York Review of Books, and presents BBC Radio 4’s contemporary history series, The Long View. He was named columnist of the year in the 2002 What the Papers Say awards and in 2008 was awarded the David Watt prize for journalism. He has also published seven books, including five bestselling thrillers under the name Sam Bourne. He tweets as @freedland.

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Why does Donald Trump demonize cities?

Because they show that the liberal experiment works

March 17

Will Wilkinson is the vice president for policy at the Niskanen Center and a former U.S. politics correspondent for the Economist.

President Trump is a big-city guy. He made his fortune in cities and keeps his family in a Manhattan tower. But when Trump talks about cities, he presents a fearsome caricature that bears little resemblance to the real urban landscape.

“Our inner cities are a disaster,” he declared in a campaign debate. “You get shot walking to the store. They have no education. They have no jobs.” Before his inauguration, in a spat with Atlanta’s representative in Congress, he tweeted: “Congressman John Lewis should spend more time on fixing and helping his district, which is in horrible shape and falling apart (not to mention crime infested).” He makes Chicago sound like an anarchic failed state. “If Chicago doesn’t fix the horrible ‘carnage’ going on, 228 shootings in 2017 with 42 killings (up 24% from 2016), I will send in the Feds!” he warned. His executive order on public safetyclaimed that sanctuary cities, which harbor undocumented immigrants, “have caused immeasurable harm to the American people and to the very fabric of our Republic.”

With this talk, Trump is playing to his base, which overwhelmingly is not in cities. Party affiliation increasingly reflects the gulf between big, diverse metros and whiter, less densely populated locales. For decades, like-minded people have been clustering geographically — a phenomenon author Bill Bishop dubbed “the Big Sort ” — pushing cities to the left and the rest of the country to the right. Indeed, the bigger, denser and more diverse the city, the better Hillary Clinton did in November. But Trump prevailed everywhere else — in small cities, suburbs, exurbs and beyond. The whiter and more spread out the population, the better he did.

 

He connected with these voters by tracing their economic decline and their fading cultural cachet to the same cause: traitorous “coastal elites” who sold their jobs to the Chinese while allowing America’s cities to become dystopian Babels, rife with dark-skinned danger — Mexican rapists, Muslim terrorists, “inner cities” plagued by black violence. He intimated that the chaos would spread to their exurbs and hamlets if he wasn’t elected to stop it.

Trump’s fearmongering turned out to be savvy electoral college politics (even if it left him down nearly 3 million in the popular vote). But it wasn’t just a sinister trick to get him over 270. He persists in his efforts to slur cities as radioactive war zones because the fact that America’s diverse big cities are thriving relative to the whiter, less populous parts of the country suggests that the liberal experiment works — that people of diverse origins and faiths prosper together in free and open societies. To advance his administration’s agenda, with its protectionism and cultural nationalism, Trump needs to spread the notion that the polyglot metropolis is a dangerous failure.

The president has filled his administration with advisers who oppose the liberal pluralism practiced profitably each day in America’s cities. “The center core of what we believe,” Steve Bannon, the president’s trusted chief strategist, has said, is “that we’re a nation with an economy, not an economy just in some global marketplace with open borders, but we are a nation with a culture and a reason for being.” This is not just an argument for nationalism over globalism. Bannon has staked out a position in a more fundamental debate over the merits of multicultural identity. Whose interests are included when we put “America first”?

When Trump connects immigration to Mexican cartel crime, he’s putting a menacing foreign face on white anxiety about the country’s shifting demographic profile, which is pushing traditional white, Judeo-Christian culture out of the center of American national identity. “The ceaseless importation of Third World foreigners with no tradition of, taste for, or experience in liberty,” wrote Michael Anton , now a White House national security adviser, is “the mark of a party, a society, a country, a people, a civilization that wants to die.” Bannon has complained that too many U.S. tech company chief executives are from Asia.

The Census Bureau projects that whites will cease to be a majority in 30 years. Suppose you think the United States — maybe even all Western civilization — will fall if the U.S. population ever becomes as diverse as Denver’s. You are going to want to reduce the foreign-born population as quickly as possible, and by any means necessary. You’ll deport the deportable with brutal alacrity, squeeze legal immigration to a trickle, bar those with “incompatible” religions.

But to prop up political demand for this sort of ethnic-cleansing program — what else can you call it? — it’s crucial to get enough of the public to believe that America’s diversity is a dangerous mistake. If most white people come to think that America’s massive, multicultural cities are decent places to live, what hope is there for the republic? For Christendom?

The big cities of the United States are, in fact, very decent places to live. To be sure, many metros have serious problems. Housing is increasingly unaffordable, and the gap between the rich and poor is on the rise. Nevertheless, the American metropolis is more peaceful and prosperous than it’s been in decades.

Contrary to the narrative that Trump and his advisers promote, our cities show that diversity can improve public safety. A new study of urban crime rates by a team of criminologists found that “immigration is consistently linked to decreases in violent (e.g., murder) and property (e.g., burglary) crime” in the period from 1970 to 2010. What’s more, according to an analysis of FBI crime data, counties labeled as “sanctuary” jurisdictions by federal immigration authorities have lower crime rates than comparable non-sanctuary counties. The Trump administration’s claim that sanctuary cities “have caused immeasurable harm” is simply baseless. Even cities that have seen a recent rise in violent crime are much safer today than they were in the early 1990s, when the foreign-born population was much smaller.

Yes, cities have their share of failing schools. But they also have some of the best schools in the country and are hotbeds of reform and innovation. According to recent rankings by SchoolGrades.org , the top 28 elementary and middle schools in New York state are in New York City; Ohio’s top four schools are in Cincinnati, Cleveland, Youngstown and Columbus; and the best school in Pennsylvania is in Philadelphia. “The culture of competition and innovation, long in short supply in public education, is taking root most firmly in the cities,” according to the Manhattan Institute researchers who run the site.

And it gets things exactly backward to think of unemployment as a problem centered in cities.

Packing people close together creates efficiencies of proximity and clusters of expertise that spur the innovation that drives growth. Automation has killed off many low- and medium-skill manufacturing jobs, but technology has increased the productivity, and thus the pay, of highly educated workers, and the education premium is highest in dense, populous cities. The best-educated Americans, therefore, gravitate toward the most productive big cities — which then become even bigger, better educated and richer.

Meanwhile, smaller cities and outlying regions with an outdated mix of industry and a less-educated populace fall further behind, displaced rather than boosted by technology, stuck with fewer good jobs and lower average wages. The economist Enrico Moretti calls this regional separation in education and productivity “the Great Divergence.”

Thanks to the Great Divergence, America’s most diverse, densely populated and well-educated cities are generating an increasing share of the country’s economic output. In 2001, the 50 wealthiest U.S. metro regions produced about 27 percent more per person than the country as a whole. Today, they produce 34 percent more, and there’s no end to the divergence in sight.

Taken together, the Great Divergence and the Big Sort imply that Republican regions are producing less and less of our nation’s wealth. According to Mark Muro and Sifan Liu of the Brookings Institution, Clinton beat Trump in almost every county responsible for more than a paper-thin slice of America’s economic pie. Trump took 2,584 counties that together account for 36 percent of the nation’s gross domestic product. Clinton won just 472 counties — less than 20 percent of Trump’s take — but those counties account for 64 percent of GDP.

The relative economic decline of Republican territory was crucial to Trump’s populist appeal. Trump gained most on Romney’s 2012 vote share in places where fewer whites had college degrees, where more people were underwater on their mortgages , where the population was in poorer physical health, and where mortality rates from alcohol, drugs and suicide were higher.

But Trump’s narrative about the causes of this distress are false, and his “economic nationalist” agenda is a classic populist bait-and-switch. Trump won a bigger vote share in places with smaller foreign-born populations. The residents of those places are, therefore, least likely to encounter a Muslim refugee, experience immigrant crime or compete with foreign-born workers. Similarly, as UCLA political scientist Raul Hinojosa Ojeda has shown, places where Trump was especially popular in the primaries are places that face little import competition from China or Mexico. Trump’s protectionist trade and immigration policies will do the least in the places that like them the most.

Yet the Great Divergence suggests a different sense in which the multicultural city did bring about the malaise of the countryside. The loss of manufacturing jobs, and the increasing concentration of the best-paying jobs in big cities, has been largely due to the innovation big cities disproportionately produce. Immigrants are a central part of that story.

But this is just to repeat that more and more of America’s dynamism and growth flow from the open city. It’s difficult to predict who will bear the downside burden of disruptive innovation — it could be Rust Belt autoworkers one day and educated, urban members of the elite mainstream media the next — which is why dynamic economies need robust safety nets to protect citizens from the risks of economic dislocation. The denizens of Trump country have borne too much of the disruption and too little of the benefit from innovation. But the redistribution-loving multicultural urban majority can’t be blamed for the inadequacy of the safety net when the party of rural whites has fought for decades to roll it back. Low-density America didn’t vote to be knocked on its heels by capitalist creative destruction, but it has voted time and again against softening the blow.

Political scientists say that countries where the middle class does not culturally identify with the working and lower classes tend to spend less on redistributive social programs. We’re more generous, as a rule, when we recognize ourselves in those who need help. You might argue that this just goes to show that diversity strains solidarity. Or you might argue that, because we need solidarity, we must learn to recognize America in other accents, other complexions, other kitchen aromas.

Honduran cooks in Chicago, Iranian engineers in Seattle, Chinese cardiologists in Atlanta, their children and grandchildren, all of them, are bedrock members of the American community. There is no “us” that excludes them. There is no American national identity apart from the dynamic hybrid culture we have always been creating together. America’s big cities accept this and grow healthier and more productive by the day, while the rest of the country does not accept this, and struggles.

In a multicultural country like ours, an inclusive national identity makes solidarity possible. An exclusive, nostalgic national identity acts like a cancer in the body politic, eating away at the bonds of affinity and cooperation that hold our interests together.

Bannon is right. A country is more than an economy. The United States is a nation with a culture and a purpose. That’s why Americans of every heritage and hue will fight to keep our cities sanctuaries of the American idea — of openness, tolerance and trade — until our country has been made safe for freedom again.

An increasingly connected world needs hackers more than ever before

Internet security expert Justin Calmus explains why bug bounty programs are so important

An increasingly connected world needs hackers more than ever before
(Credit: Getty/welcomia)

As the world around us becomes more connected to the internet, the number of ways that hackers can infiltrate our lives becomes increasingly multifarious. Today data breaches are taking place in ways that were unheard of just a decade ago — from remotely hacking cars to infiltrating “smart” teddy bears.

The threats have grown so quickly that companies are overwhelmed by the increasing number of attacks, security experts say. This is not just because of the growing number of opportunities to infiltrate a network or device, but also because these attacks are increasingly automated and launched from low-priced computer hardware using open-source tools that require relatively low coding skills to deploy. Defending against such attacks can require well-paid and highly trained experts.

“We believe that cybersecurity is a correctable math problem that, at present, overwhelmingly favors the attackers,” Ryan M Gillis, vice president of cybersecurity strategy for enterprise security company Palo Alto Networks, said at a House Homeland Security Committee meeting last week about protecting the private sector from hacking. “Network defenders are simply losing the economics of the cybersecurity challenge.”

One increasingly popular way for a company or government agency to root out vulnerabilities is through a big bounty program, a policy that invites hackers to try to infiltrate its connected networks. Hackers receive financial compensation for identifying entry points that could be exploited for malicious purposes. The idea has been around since at least 1995, when internet browser pioneer Netscape initiated its “bugs bounty” program with a $50,000 budget. Today such programs are common among major companies, including United Airlines and Tesla Motors, and can be lucrative projects for the most talented hackers who can earn from $10 to tens of thousands of dollars depending on the severity of the vulnerability identified.

Last week Google and Microsoft increased their top rewards for people who can expose the most serious threats, like when code can be remotely injected and executed through network defenses. This underscores the growing popularity of bounty programs as companies compete for the attention of the most talented ethical hackers. Apple, which has resisted compensating people for identifying flaws, last year succumbed to the trend and now offers bounties of as much as $200,000.

Justin Calmus, vice president of hacker success for San Francisco-based HackerOne, which has a bug-bounty platform whose clients include the U.S. State Department, Uber Technologies and General Motors, spoke with Salon about the role bug bounties play in boosting network security.

Bug bounties have been around for about 20 years. Talk about the most recent innovations in the practice and where it might be headed.

I’ll start with the problem first. If we go back 15 years, companies would be able to recruit engineers because they were focused on specific technologies. You would have a few issues from most likely Python, [a high-level general-purpose programming language,] and you would have a website and some people who knew HTML, [the standard language for building websites]. Today we have so many different programming languages and we have different infrastructure components, like running in the cloud versus on premise, we have [Amazon Web Services, a widely used cloud-computing platform] and we have all these different operations.

The problem of security is getting bigger and bigger. How do you control your security? If you run a startup, how do you control your security as you build your business? That’s an even harder problem to solve because you don’t necessarily have the funding to hire tons of security resources. You have to figure out “How do I continue to stay secure while I scale?” That’s one of the problems bug bounties solve for.

For the most part, if you have a company, and it could be any company, you tell hackers, “Hey, I want you to do anything it takes to get access to our data and report it to us.” If you do that, you then have thousands of eyes looking into your specific programs to help you scale and help you secure your business.

Are there hackers that just do this as full-time jobs?

Yeah, we have a gentleman in Vegas that does this full-time, making a half a million dollars a year doing this. You can make a significant income from bug bounties. It’s a fantastic way to make extra income and to potentially go full-time.

Google and Microsoft recently announced big increases in their bug bounty rewards. Why do you think bug bounties are becoming more lucrative?

Imagine if Salon.com is trying to recruit the best reporter in the world, but that reporter must have specific knowledge about security — and it also wants a little bit of software engineering background because the reporter needs to talk technical, and it wants the reporter to be located in this area, and the reporter must be willing to travel. Suddenly you’re moving your needle so small that there might be three people in the world who fit the criteria.

Google is starting to have this problem. They’ve developed a lot of their own tools and they’ve developed their own [programming] language. It’s not easy to find a Google bug because there isn’t external training on what Google does, how they do it, all the different types of infrastructure. There are pretty good resources to figure this out, but to go deep on such a massive problem you need to spend hours and days and months getting to know the infrastructure to find a bug. So to dedicate all of your time and resources into Google you need to be very incentivized to look because at the end of the day you might not find anything.

We’re entering an era of the internet of things [that] connects cars, smart cities, toys with Wi-Fi connections. Are bug bounties being implemented for things like this?

We’re getting to the point to where the [makers of] hardware and the internet of things components are starting to be asked those very questions. As a hacker myself, I want to see them participate in bug bounty programs because I use Alexa, I use some of the apps connected to [the internet of things] and it’s my job to understand how the software and hardware that I buy works. Doing due diligence and being able to reverse engineer to take a look deep into a product, you may find issues and vulnerabilities; some of them may even give you access to other customers’ data. Companies need to be able to responsibly disclose all of that. For hackers to put in the time and effort to find some of these vulnerabilities — it would be fantastic if companies would reward the hackers so that they continue looking into their programs.

We’ve read a lot about how automakers are encouraging white hat hackers to root out these vulnerabilities. But is this happening with other makers of internet-connected products, like internet-connected home appliances or “smart” teddy bears?

It’s absolutely a slow roll. The tech companies get it. They have to deal with security issues day in and day out. The hardware companies don’t necessarily understand it as much as they need to. It’s a problem we’re solving for. We do have some hardware companies on board. We do have internet of things [companies] on board. But we do need to get the word out that security is a fundamental piece of everybody’s life. You need to be able to understand the security outcomes of making life more efficient or easier or whatever it may be. So do I think that we need to spread the word? Absolutely. Do I think they get it yet? Not 100 percent.

The Information Technology and Innovation Foundationrecently said that a significant number of federal government websites failed basic security benchmarks. Is the federal government falling behind in this effort to entice ethical hackers?

The Department of Defense has a bug bounty program and we’re starting to see efforts to secure all of our government services. Just speaking to higher-ups on the government side I hear them talking about “Hey, we need to find these hackers and reward them and incentivize them, see what we can do to continue to have them continue to look at our programs and even eventually hire them.” The U.S. has its own hiring criteria, but the [Defense Department] is open to anybody today, not just U.S. citizens looking to work for them.

HackerOne recently announced a platform for the open-source coding community, which is free. What inspired you to go in that direction?

We’re absolutely huge open-source fans. Open source powers our platform. It powers many platforms. We see the mission as making the entire internet safer and make sure that everyone is taken care of. We’re better off doing that for all of the open-source projects out there. We want to make sure we’re on top of that. This also helps us branch out to the best hackers out there. We’re able to leverage our ability find vulnerabilities [in open-source software] while we’re getting more connected to the hacker community.

How Uber Could End Up As Silicon Valley’s Most Spectacular Crash

ECONOMY

Lately, the curtain is being pulled back to reveal a rotten culture and troubled CEO.

Photo Credit: Prathan Chorruangsak / Shutterstock.com

Just a year ago, Uber reigned as the tech industry’s awe-inspiring, all-powerful Wizard of Oz. But lately, the curtain is being pulled back to reveal a guy who’s more like an angry drunk frantically yanking levers while taking roundhouse swings at the Tin Man and propositioning Dorothy.

Uber is in a whole lot of bad right now, and there’s growing concern that it’s about to melt down like a haywire nuclear reactor, which would leave a crater in the heart of Silicon Valley. Uber gave us on-demand transportation. Countless people all over the world love this new kind of service. The category is only going to get bigger. But it’s possible it will do that without Uber.

Rotten Culture, Bad PressAt the heart of Uber’s trouble is its culture, which seems to have been born from a one-night stand between John Belushi’s crude Bluto in Animal House and Ayn Rand’s hypercompetitive Hank Rearden. That culture got put on public display in February, when former engineering employee Susan Fowler published a blog calling out Uber’s rotten treatment of women and its general dysfunction. The place is so cutthroat, she wrote, “it seemed like every manager was fighting their peers or attempting to undermine their direct supervisor so that they could have their direct supervisor’s job.”

If anyone thought Fowler was a lone whiner, a few days later tech industry legend Mitch Kapor and his wife, Freada Kapor, who is an expert in workplace mores, published an open letter to Uber’s board. The Kapors were early investors in the company, and they were unhappy about Uber’s tepid response to Fowler’s post and fed up with Uber’s “destructive culture,” to use their term. “We are speaking up now because we are disappointed and frustrated; we feel we have hit a dead end in trying to influence the company quietly from the inside,” they wrote.

A week later, while riding in an Uber, CEO Travis Kalanick was captured on video berating the driver, who dared to complain about cuts to his income because Uber keeps reducing fares. “I’m bankrupt because of you,” the driver told Kalanick, who then erupted. After Bloomberg obtained and published the video, Kalanick found himself in the all-too-familiar position of publicly apologizing. He posted on Uber’s site, “I must fundamentally change as a leader and grow up.” Duh.

Negative publicity keeps battering Uber. The company ran afoul of the protesters who flocked to airports after Donald Trump’s travel ban, then had to fend off a #DeleteUber movement. (Some estimates say 200,000 people deleted the app in the days after the hashtag went viral.) About six months earlier, Uber took a $3.5 billion investment from Saudi Arabia’s Public Investment Fund, a move that made Uber look as if it was buddies with a government that won’t let women drive and puts gay men in jail.

One Uber investor said to Fortune about the deal, “It goes to the heart of who Travis is. He just doesn’t give a shit about optics. Ever.”

Now Uber is being painted as a technology thief by Google’s parent, Alphabet. Last year, Uber bought a company called Otto for a reported $680 million. Otto develops autonomous driving technology. A bunch of people who work there came from Alphabet’s autonomous car subsidiary, now called Waymo. Alphabet alleges that some of those people stole technical data from Waymo, and Alphabet is suing to stop Uber from using it. Uber has often stated that its future rests on having a fleet of self-driving cars—so, of course, it won’t have to share revenue with those pesky human drivers. If Alphabet wins its case, Uber would pretty much have to start building the technology all over again or pay a ton of money to buy someone else’s.

Dissatisfied Drivers, Bleak Financials. While Uber is counting on a hazy future of self-driving cars, in the meantime it has to keep its 160,000 drivers happy, and they are not, as Kalanick’s video encountered showed. Drivers want the Uber app to allow tips; Uber won’t do it. Uber has fought court cases brought by U.S. drivers asking for employee benefits. It settled a suit for $20 million for posting ads that were misleading about how much its drivers can earn. Rival Lyft has been running ads lampooning Uber’s treatment of drivers, hoping to lure away Uber drivers—and convince conscientious riders they should prefer a company that treats its drivers better.  Strategically, Kalanick and his team seem guilty of constant overreach. Does anybody ever order a falafel from UberEats? Who at Uber thought it was a good idea to take on Seamless? Not only did Kalanick buy Otto to get into self-driving cars, but in February he hired a former NASA scientist to develop flying cars. Trump likes to say we always lose to China—well, Uber proved him right by going into China ill-prepared. Last summer, Uber cut a deal with China’s Uber clone, Didi Chuxing, to leave China in exchange for 17.5 percent of the Chinese company and a $1 billion investment by Didi. Is that setting up Didi to eventually beat Uber worldwide? Trump will have a seizure if the day ever comes when U.S. riders no longer say they’re going to “Uber” somewhere and instead say they’re going to “Didi.”And then there is Uber’s financial picture. The company is private, but some of its numbers have been leaked. Bloomberg reported that Uber lost $800 million in the third quarter of 2016. Some speculate Uber may have lost $3 billion last year. Uber is a costly business to run. To serve more customers, it needs to bring in and pay more drivers, so the company can’t take advantage of economies of scale. It has little pricing power because it still faces competition from Lyft and taxis and other newcomers including Maven, which is a unit of General Motors. In order to have the cash to fund operations and expansion, Uber has brought in round after round of private investment, pumping up the valuation of the company to nearly $70 billion. That would make Uber worth more than GM. Raise your hand if you think that makes sense.

The sky-high valuation may be haunting Uber. Kalanick has famously refused to take Uber public, even though the company, at eight years old, is in the sweet spot of when many tech companies do an initial public offering. He makes his stance sound like a maverick’s declaration of independence from public markets, but whispers now are that Uber’s finances might not justify an IPO at a valuation high enough to make current investors happy. If that’s true, Uber is in a hole. It won’t be able to raise money from anyone who has passed sixth-grade math.

If Uber stalls, it isn’t going to be saved by a loyal consumer fan base. There is no stickiness to Uber. It has no frequent-rider program. It has no social component. It prevents users from forming bonds with drivers. No one gets a heightened sense of self by identifying as an Uber rider versus some competitor. We’ll stick with Uber as long as it continues to get us where we want to go at a price we like. Someone else comes along with a better service or lower price, we’ll use it.

Drexel of the 2010s?It’s hard to imagine the devastation that would come with an Uber collapse. Its dozens of investors range from venture capital companies to individuals like Kapor and companies such as Microsoft and Citigroup. The company employs 11,000 people (excluding drivers), mostly around Silicon Valley, and is in the process of spending $250 million on new offices. The blow to Silicon Valley’s ego might be up there with the pain the Democratic Party has been feeling lately.

Uber has done amazing work in its short life. It created, defined and has so far dominated a new market of on-demand transportation, changing the way we do things today and profoundly changing the way we think about the future of urban transportation. It is a historically important company. No one will ever take that away from Kalanick and his crew. But Uber has proved to be a flawed company. To find a business tragedy that’s an appropriate warning for Uber, go back to Drexel Burnham Lambert in the 1980s, when Kalanick was in grade school. (He is, believe it or not, 40 years old.) Drexel, led by investing legend Mike Milken, defined and dominated junk bonds as a category of finance. This changed Wall Street and business forever. Drexel was a superstar. But the company had a flawed culture of insane pressure to perform, so employees took sketchy risks that ultimately led to criminal charges. Within a couple of years, the company fell from the pinnacle of Wall Street power to filing for bankruptcy. Milken went to prison for securities fraud.

The category Drexel created lives on. Today, junk bonds are a $1 trillion market, without Drexel.

The Kapors are pushing Kalanick to reinvent Uber’s culture so it can become an enduring company. It would be awesome if Uber can fulfill its promise and stand next to companies like Apple and Amazon. But as Uber’s bad days pile up, it often looks as if Kalanick has built the Drexel of the 2010s.

Kevin Maney is a best-selling author and award-winning columnist.

 

The Deep State and the Dark Arts

There’s a superb scene in the movie Syriana where CIA bureaucrats distance themselves from one of their agents, Bob, played by George Clooney, who has become a troublesome asset for the agency. Terry, the pack leader, begins to extemporize a narrative to his subordinates. With cool detachment, he tells them: “Put some space between us and Bob. Bob has a long history of entrepreneurial operations. We haven’t really had a handle on Bob for years. After 9/11, some people got a lot of leeway, let their emotions get the best of them. These are complex times. There’s already an active investigation into Bob’s activities in…help me out here.”

At this point, the group flesh out the details of how they’re going to burn the agency’s connection to Bob, painting him as an agent gone rogue, slipping the net of agency supervision, defying protocol, and ultimately selling himself to unsavory elements that want a U.S. asset killed. In this way, the leviathan spits out a loyal servant, rendering him obsolete with a fable and a slander, sanctified by the imprimatur of the officialdom.

We should note the importance of the media in all this storyline, albeit fictional. The dark arts of propaganda aren’t overtly mentioned, but they are the pivotal tools that will animate the destruction of Bob’s career. All sound strangely familiar? It should. It’s pretty much the script the intelligence community uses as its modus operandi when it needs to deal with an inconvenient public servant.

Theater of the Absurd

With rumors of detente crackling through the ether, the imperialist machinery of anti-Russian foreign policy has cranked into high gear, leveraging leaks and the press to mute Trump’s overtures of peace. Leaks to the The Washington Post were leveraged in last month’s excommunication of National Security Advisor Michael Flynn. Flynn was rather easily vanquished by a leak from within the American intelligence community outing him as a confabulator and, in pundit spin, a man vulnerable to blackmail by the Kremlin.

After Flynn’s unceremonious ouster, Attorney General Jeff Sessions was the next target, pilloried by Democrats for his contacts with the Russian ambassador Sergey Kislyak, something he declined to mention in his confirmation hearings. A third interaction has now been surmised, with tantalizing rumors Sessions was in the same room as Kislyak during a cocktail party. Did they conspire over canapes? Smuggle thumb drives wrapped in prosciutto? Exchange piquillo peppers stuffed with nuclear codes? The possibilities blossom like a mushroom cloud. Can you feel the frisson of treason?

Of course, the FBI has been investigating more mundane contacts between the Trump team and Moscow, a project that will either result in Trump’s impeachment for some manner of treason or his complete and utter subjection to the foreign policy whims of the foreign policy establishment. A Times article reported that the Obama administration furiously laid the foundation for this investigation by disseminating innuendo that Trump was under Russian influence during the peace laureate’s last days in office. Typically, the unofficial commentariat in the comments thread praised Obama’s patriotism, as though this wanton Wall Street servant was doing anything other than performing last-minute janitorial services for his venal party.

A few weeks ago, a Congressman (Rep. Darrell Issa) obscurely called for the appointment of a special prosecutor. But now Lindsey Graham has embraced the call, suggesting one be named if contact between Trump aides and Moscow were found, regardless of the content of that contact. It reminds one of the proverb that Caesar’s wife must be above even unfounded suspicion, let alone actual wrongdoing. In any event, Graham and his monomaniacal bedmate, John McCain, continue their lurid press junket, now looking to subpoena intelligence agencies for wiretaps of Trump phone calls, though former Director of National Intelligence (DNI) James Clapper refuted the wiretap rumor, as did FBI Director James Comey, albeit by the oblique means of asking the Justice Department to do so. In any event, the banishment of Flynn, the tarring of Sessions, and the net of suspicion cast over the Trump administration are fierce warnings from a rattled foreign policy community, a modern equivalent of the severed heads of Roman soldiers set on pikes as a message from Visigoth hordes.

The enveloping of the president in a cacophony of innuendo is likely a collaborative effort between the Justice Department, the National Intelligence Agency, the CIA, and crucially, the mainstream press. Beyond the corridors of the Capitol Hill, civil-society organizations like the George Soros-funded MoveOn.org and Barack Obama’s robust Organizing for Action (OFA) are turning up the heat on the streets, creating the visible signs of unrest, sometimes violent, that have capsized governments from Venezuela to Ukraine at the behest of Western oligarchs.

In recent weeks, President Donald Trump’s appointment of delusional hawk H.R. McMaster as National Security Advisor, a call for an unnecessary $54 billion dollar expansion of the military budget, his sudden demand for the return of Crimea to Ukraine, his fulminant echoes of Bush administration hysteria over Iran, among other hawkish developments, can be read as an unsettled president’s efforts to appease a foreign policy establishment that is ruthlessly using the media to undermine, and reign in, a wayward steward of empire.

Full-Spectrum Dominance vs. Clear-Headed Detente 

But why is Russia such a perennial target of Washington’s? Why are peaceful overtures toward Moscow so scorned? As the Trump administration found out, de-escalation is a no-no in Washington. Russia, along with China, are the leading targets of American long-term foreign policy. They represent the only two nations that might seriously rival the U.S. in Eurasia, which is considered the fulcrum of the 21st century global economy. Preventing the rise of new rivals is long-standing U.S. policy, most explicitly articulated by Paul Wolfowitz on behalf of the Clinton administration in early 1990s.

None of this should come as a surprise. Consider what was at stake. At the macro level, the entire program for global hegemony is under threat. Outlined over decades by foreign policy luminaries such as George Kennan, Allen Dulles, Wolfowitz, and Zbigniew Brzezinksi, the general plan is for full-spectrum dominance, meaning control of land, sea, air, and space, on a planetary basis, with a special emphasis on “Eurasian landmass,” as the ghoulish McMaster called it in a recent anti-Russian speech.

If history is any guide, it is unacceptable for a U.S. president to thaw relations with Russia unless that thaw consists of Russia capitulating to American demands. Mikhail Gorbachev’s trusting dismantling of the Soviet Union and the Warsaw Pact led to a decade of Western looting of Gorbachev’s country. Vladimir Putin has since restored a measure of Russia’s economic and military strength. Where Gorbachev was exploited, Putin is proving resistant to such entreaties, except on the economic front, where he appears to have bought into some of Western neoliberal policy.

Instead, Putin is posing a threat to the forward progress of Washington’s neoconservative foreign policy. He has actively promoted a variety of pipeline projects that would speed Russian oil and gas to Western Europe, undercutting profits of Western multinationals and addicting NATO nations to the energy teat of the Russian Federation. And he has conducted a few military maneuvers that have enraged the Washington elite, which are used to being conciliated by effete comprador elite in developing nations. This is different. A nuclear nation that can’t be overrun or bombed into submission. And it shows.

After successfully dismembering Yugoslavia, Congo, Afghanistan, Iraq, Libya, Yemen, the West-led spread of chaos across the Middle East stalled in Syria. After happily expanding NATO throughout Eastern Europe with little opposition, expansion hit a wall in Ukraine. In both instances, it is Moscow behind the holding action preventing the American project of global dominion from advancing. That’s why Putin has replaced Hugo Chavez as the West’s most demonized public figure.

Worryingly for covetous D.C. schemers, there’s a lot of new economic activity afoot in Eurasia, little of it involving the U.S. This activity includes plans for a Eurasian Union headed by Russia, a metastasizing Shanghai Cooperation Organization (SCO), and the rapidly advancing One Belt, One Road vision of the Chinese. The latter would effectively be a New Silk Road stretching from Vladivostok to Lisbon, animating Chinese and Russian economic influence across the Asian and European continents, and lifting countries like Kyrgyzstan, Kazakhstan, Tajikistan, Turkmenistan, and Uzbekistan. This is Washington’s nightmare scenario, since no serious geo-strategist believes global hegemony is feasible short of dominion in Central Asia. This understanding fuels the underlying animus toward Moscow and Beijing. It has nothing to do with ceaseless repeated lies about Russian aggression in Eastern Europe and Chinese aggression in the South China Sea. And it has nothing to do with lies about Moscow rigging the election for Donald Trump or Michael Flynn lifting sanctions in a nefarious quid pro quo.

The Deep State vs. the Nation State

Long-time Congressional staffer Mike Lofgren refers to the murky agencies at work to ensure this planetary plan stays on track as the “deep state,” in his book of the same name. He writes that it includes key elements of the national security state, which ensure continuity of policy despite the superficial about-faces from one administration to the next. The deep state is effectively a warlike oligarchy, hell-bent on full spectrum dominance, driven by a lust for wealth and power, and anxious to inscribe its name in history. Specifically, Lofgren says, the deep state includes the Department of Defense, the State Department, the National Intelligence Agencies, Wall Street, the defense industry, and the energy consortium, among other major private players. They share common agendas, operate a revolving door of employees, and have a collective distaste for democracy, transparency, and regulation. The deep state is the link between military interventions and trans-pacific trade deals, between sanctions and IMF loans. All of these tools, be they arms or loans or legal structures, serve a single purpose: the overarching control of world resources by a global community of corporate elites. One can also see how these three instruments of policy and power all do tremendous damage to a particular entity, the nation-state. It is the nation-state that is considered by elites to be the sole remaining barricade between populations in nominal democracies and their unfettered exploitation by multinationals, although one might reasonably argue that the state more often abets exploitation rather than deters it.

The Dystopia to Come

So where is this all headed? Aside from the theatrics of the Trump presidency and its sequestration or removal. What would full-spectrum dominance look like? Probably something like a one-world market, populated by enfeebled states, ruled by a worldwide raft of interlocking investor rights agreements that allowed private capital to plunder natural resources free of state restraints, such as labor safeguards, environmental protections, reasonable tax regimes, capital controls or border tariffs. Faceless multinationals would pillage the planet, their anonymous appointees manning the joysticks of power behind the reflective glass of their cloud-draped spindles, unreachable and unelected by the armies of the destitute that prowled the wastelands below. The amalgamated forces of corporate elitism would coolly play labor arbitrage across continents, threaten and destroy defiant economies through currency flight and commodity manipulation, and continue to consume an outsized percentage of the world’s resources. This would fulfill the hegemonic dreams of former State Department Director of Policy Planning Kennan, who once argued that we must dispense with humanitarian concerns and “deal in straight power concepts,” the better to control and consume an outsized portion of the world’s resources, presumably a privilege reserved for elite whites, and a selection of mandarins from other ethnicities with special clearances.

A criminal corporate commonwealth, supported by a fiat dollar as global reserve currency enforced by threat of war and economic collapse, will be deaf to protest from below, its weaponized satellites aimed at populations like sunlit magnifiers at a column of ants. Currency itself would be wholly digitized. This move would be sold as a positive advance as it would provide better tax accountability and therefore fund future programs of social uplift. Rather it will be employed as a means of totalitarian financial control over populations. Their wealth will be institutionalized. The concept of withdrawal will fade along with the fiction of ownership.

Terrorism will become the chosen tool of this elite power (insofar as it isn’t already). Surgical strikes, be they military, economic, or news-driven, will “keep the rabble in line” as all societies become subservient to the portents of war, the fear of inaccessible funds, and the black smears of an amoral media. The ‘deep state’ will become an obsolete term, as the nation-state will recede in memory as a relic of a strife-ridden dark age.

After all, the laissez faire cult of the beltway actually believes the planet would prosper sans nation-states. As another scene from Syriana reminds us, elite capital has a very different worldview from the majority of labor, who continue to believe the state has a role to play defending their interests. At one point in the film, Texas oil man Danny Dalton lectures lawyer Bennett Holiday on the true definition of corruption, “Corruption!? Corruption is government interference in market efficiencies in the form of government regulation. That’s Milton Friedman! He got a goddamn Nobel Prize!” The U.S. already practices free-market militarism, refusing to recognize borders, legal constraints, or geostrategic jurisdiction. Why not free-market finance and trade?

The good news is that, if you can clamber into the top one percent of the U.S. population, for instance, serving as a parasite on the grizzled hide of the corporate beast, you might yet partake of unimaginable luxuries, high in the clouds, sipping Mimosas as you transit between the ring-fenced metropoles of the world, where stateless elites intermingle.

Jason Hirthler is a veteran of the communications industry and author of The Sins of Empire: Unmasking American Imperialism. He lives in New York City and can be reached at jasonhirthler@gmail.com.

http://www.counterpunch.org/2017/03/10/the-deep-state-and-the-dark-arts/

WikiLeaks Has Joined the Trump Administration

VOICE
WikiLeaks Has Joined the Trump Administration

As a presidential candidate, Donald Trump declared, “I love WikiLeaks!” And he had good reason to display affection to this website run by accused rapist Julian Assange. By releasing reams of emails stolen from the Democratic National Committee and Hillary Clinton campaign chairman John Podesta, WikiLeaks helped tilt the 2016 election in Trump’s favor.

As president, Trump hasn’t come out and said anything laudatory about WikiLeaks following its massive disclosure of CIA secrets on Tuesday — a treasure trove that some experts already believe may be more damaging than Edward Snowden’s revelations. But Trump hasn’t condemned WikiLeaks. The recent entries on his Twitter feed — a pure reflection of his unbridled id — contain vicious attacks on, among other things, Arnold Schwarzenegger, the New York Times, and Barack Obama but not a word about WikiLeaks. Did the president not notice that the intelligence community he commands has just suffered a devastating breach of security? Or did he simply not feel compelled to comment?

Actually there is a third, even more discomfiting, possibility:

Perhaps Trump is staying silent because he stands to benefit from WikiLeaks’ latest revelations.

Perhaps Trump is staying silent because he stands to benefit from WikiLeaks’ latest revelations.On Saturday, recall, Trump was making wild-eyed accusations that Obama had ordered the U.S. intelligence community to wiretap him. “How low has President Obama gone to tapp (sic) my phones during the very sacred election process. This is Nixon/Watergate. Bad (or sick) guy!” The White House could not come up with one iota of evidence to support this irresponsible allegation, which was denied by FBI Director James Comey and former Director of National Intelligence James Clapper. But Trump would not be dissuaded from pursuing this charge, which serves as a convenient distraction from the far more serious accusations of possible collusion between the Trump campaign and the Kremlin while Russia was interfering with the presidential campaign.

Is it just a coincidence that WikiLeaks dumped a massive database pertaining to CIA hacking and wiretapping just three days after Trump made wiretapping a major political issue? Perhaps so. But there is cause for suspicion.

In the first place, WikiLeaks has often timed its leaks for maximum political impact. It released 20,000 stolen DNC emails just three days before the Democratic National Convention on July 25, 2016. As expected, WikiLeaks generated headlines about DNC staffers disparaging Sen. Bernie Sanders, buttressing a Trump campaign effort to prevent Clinton from consolidating Sanders supporters. DNC Chairwoman Debbie Wasserman Schultz resigned as a result, and the Clinton campaign suffered significant public relations damage.

In the second place, WikiLeaks, which has often leaked American but never Russian secrets, has been identified by the U.S. intelligence community as a front for Russian intelligence. In January, the Office of the Director of National Intelligence released a declassified estimate that found “with high confidence that Russian military intelligence … relayed material to WikiLeaks.” This was done with a definite purpose: “Putin and the Russian Government aspired to help President-elect Trump’s election chances when possible by discrediting Secretary Clinton and publicly contrasting her unfavorably to him.”

Trump has consistently resisted the intelligence agency’s conclusions, insisting that some 400-pound couch potato might have committed the hacking before grudgingly accepting the findings but continuing to claim that the Russian hack had no impact on the election. (Given that 70,000 votes in three states were his margin of victory, how does he know what affected the outcome and what didn’t? And if WikiLeaks was so inconsequential, why did he tout its revelations in almost every appearance during the last month of the campaign?)

The intelligence community’s finding that Putin helped him win the election spurred Trump to pursue a vendetta against it. For example, he accused the spooks — with no support — of being behind BuzzFeed’s publication of a damning dossier compiled by a former British intelligence officer claiming that the Kremlin had compiled compromising materials on him. Trump outrageously tweeted: “Intelligence agencies should never have allowed this fake news to ‘leak’ into the public. One last shot at me. Are we living in Nazi Germany?” His animus against the intelligence agencies has continued down to his more recent accusations that they allowed themselves to be used by Obama to wiretap him. The consistent (if hardly believable) storyline from Trump is that he has no connections to Russia, and that he is a victim of the nefarious machinations of the American “deep state.”

It is significant, therefore, that one of the major storylines to emerge from the latest WikiLeaks release is that the CIA supposedly has a program to reuse computer codes from foreign hackers, thus disguising CIA fingerprints on a hacking operation. Never mind that there is no evidence that the codes used to break into the DNC were part of this CIA database. Right-wing outlets are nevertheless trumpeting these revelations with headlines such as this one on Breitbart: “WikiLeaks: CIA Uses ‘Stolen’ Malware to ‘Attribute’ Cyberattacks to Nations Like Russia.” Russian-controlled Internet “bots” are also said to be playing up these claims online.

The implication is clear. Trump was a victim of a “false flag” operation wherein CIA hackers broke into the DNC and blamed the Russians. This may be nutty, but it’s eminently believable to an audience conditioned to believe that 9/11 was an inside job and that the Sandy Hook massacre was staged — favorite tropes of the radio talk-show host Alex Jones, whose work Trump has praised. Other WikiLeaks revelations — for instance, that the CIA can use Samsung smart TVs as listening devices — lend further credence to Trump’s charge that he was secretly wiretapped.

Quite apart from its specifics, the WikiLeaks release changes the subject after a bad few days for Trump highlighted by Attorney General Jeff Sessions’s decision to recuse himself from any Kremlingate probe after he was revealed to have lied under oath when he denied meeting any Russian representatives. Last week it was Trump on the defensive. Now it’s his nemeses in the U.S. intelligence community who are answering embarrassing questions about how this leak could have occurred and the contents of the leaked information.

Again, maybe this is entirely coincidental, but WikiLeaks’ history of being used by Russian intelligence to support Trump should lead to much greater scrutiny not only of who leaked this information — is there a mole in the CIA? — but why it was released now. Even if there is no active collusion between the White House and the Kremlin, the extent to which their agendas coincide is striking. Both Putin and Trump want to discredit the U.S. intelligence community because they see it as an obstacle to their power.

Photo credit: OLI SCARFF/Getty Images

WikiLeaks Has Joined the Trump Administration