Capitalism doesn’t give a flying fuck

Leela Yellesetty explains why the abysmal conditions endured by airline passengers and workers alike have everything to do with the bosses’ bottom line.

Airlines are cramming more and more passengers onto each flight

Airlines are cramming more and more passengers onto each flight

DURING HIS brief but memorable tenure as White House communications director, Anthony “The Mooch” Scaramucci attempted to explain Trump’s vision for health care reform:

What the president is trying to do is make the health care system freer. So why not disrupt and decentralize the system, make it more price competitive, increase competition for the insurance companies and trust the process of the free market, like in telecom, like in airlines?

Really? Yes, the health care system is awful, but did the Mooch really think a good selling point for reform would be to make it more like Comcast, the most hated company in America? Or United Airlines, which wasn’t able to beat out Comcast even by dragging a bloodied man off a plane, so they decided to kill a bunny rabbit for good measure?

“No one wants health care to be like the airlines!” talk-show host Seth Meyers quipped in response, “‘How was the hospital?’ ‘Not great. My surgery was three hours late, my bed was double-booked so they dragged me out of the OR, and then they sent my appendix to Albuquerque!'”

What’s to blame for the awful treatment of passengers and airline workers alike? The problem isn’t bad business decisions, but the drive for sky-high profits.

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FOR THOSE of us who hate the elaborate torture that is U.S. air travel–that is, all of us who can’t afford first class–we have some tentative good news. A recent ruling by the U.S. Court of Appeals directed the Federal Aviation Administration (FAA) to address “the Case of the Incredible Shrinking Airline Seat,” as one judge put it.

The ruling came in response to a petition filed by the consumer advocacy group Flyers Rights, which pointed out that the distance between seats, known as the “pitch,” has decreased from an average of 35 inches to 31, with some as low as 28, while seat widths have shrunk by an inch and half in the past decade–at the same time as the average passenger has grown larger.

The group argued that this posed a health and safety hazard by making it difficult to evacuate in an emergency and increasing the risk of passengers developing deep vein thrombosis (DVT), a potentially fatal condition caused by a blot clot as a result of prolonged sitting in cramped space.

The FAA rejected the petition, claiming–with “research” to back it up–that the issue of seat size was one of comfort and not safety. While the court agreed that the danger of DVT was not well established, on the safety claims, it blasted the FAA for a “vaporous record” of “off-point studies and undisclosed tests using unknown parameters.”

Indeed, the FAA refused to disclose most of the tests used to make its decision, claiming they were proprietary.

While the ruling simply directs the FAA to revisit the petition and doesn’t directly compel the agency to set minimum standards for seat size, it is certainly a positive development in the face of the ongoing airline assault on our safety and comfort, not to mention dignity.

Apparently not everyone is cheering this development, though.

In article sneeringly titled “Let Them Shrink: FAA Should Not Regulate Airline Seat Space,” Forbes‘ Omri Ben-Shahar argued that the airlines are actually giving consumers exactly what they asked for. That is, if we want cheaper flights, we should be prepared to suffer for them.

If you want better seats, just pay more–indeed, one reason our seats are shrinking is to make room for “premium” options for the lucky few.

William McGhee, author of the airline industry expose Attention All Passengerssummed up the attitude of Forbes writers and airline executives this way:

Things are just fine in business class and first class. I don’t think that’s coincidental. It reflects the larger issues we face as a society right now, the 99 Percent vs. the 1 Percent. I’ve talked to execs about deteriorating conditions in the back, and their response is basically, ‘You should pay for and sit up front,’ which is a bit of a ‘Let them eat cake’ response.

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AS EASY as it can be to dismiss an argument inspired by Marie Antoinette, it’s worth probing some of the claims that Ben-Shahar makes more closely.

For one thing, it’s true that airline travel is more affordable and accessible to the average person that it was in the glory days of free food and adequate legroom.

Back then, air travel was largely a preserve of the wealthy. For free-market enthusiasts like Ben-Shahar and the Mooch, therefore, the deregulation of the airline industry in 1978 was a victory for consumers, increasing competition and thereby lowering fares and improving service.

This sounds good, but it doesn’t remotely depict what has actually happened in the decades since deregulation. Instead, what’s played out is a sordid tale of rampant inefficiencies, corruption, bankruptcies, mergers and deteriorating conditions for both passengers and workers.

Right after deregulation, there were more than 400 certified carriers and 10 major airlines. Today, just four airlines control 80 percent of all domestic flights. Rather than encourage competition, deregulation removed antitrust provisions, allowing airlines to collude in raising fares while reducing service.

The 2013 merger of American and US Airways to create the world’s largest airline was accomplished by an army of corporate lobbyists, lawyers and economists, while executives and their Wall Street backers salivated at the profits to be made from the deal:

Indeed, government investigators had uncovered documents showing airline executives crowing about how mergers allow them to charge travelers more. “Three successful fare increases–[we were] able to pass along to customers because of consolidation,” wrote Scott Kirby, who became the president of the new American Airlines, in a 2010 internal company presentation…

A 2014 Goldman Sachs analysis about “dreams of oligopoly” used the American-US Airways merger as an example. Industry consolidation leads to “lower competitive intensity” and greater “pricing power with customers due to reduced choice,” the analysis said.

Another useful tool in the industry playbook is bankruptcy. All of the four remaining airlines filed for bankruptcy in the past decade–and they are now the four most profitable airlines in the world.

In fact, they were doing just fine before, but bankruptcy allowed them to slough off inconvenient costs of providing decent pay and benefits to their employees. As United Auto Workers activist Gregg Shotwell commented on American’s 2011 bankruptcy:

Capitalism isn’t above the law in the United States–it is the law. Peace and solidarity activists are hounded, harassed and arrested, but the forcible transfer of wealth from the working class to the investing class is protected concerted activity.

American Airlines’ debt doesn’t outweigh its cash and assets. In fact, American is financing its own bankruptcy. That’s not distress, it’s brass-knuckles union busting. The business press makes no bones about American Airlines’ plan to profit off the broken backs of labor contracts. In fact, they crow about it.

American Airlines ordered 460 new planes from Boeing and Airbus less than five months ago, at a cost of $38 billion. Those contracts will be honored even as American plans to dump pensions underfunded by about $10 billion for approximately 130,000 workers and retirees.

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THIS UNION busting comes with real consequences for passenger safety as well. Abysmal pay and working conditions for pilots in budget regional carriers has resulted in an increase in crashes, to give just one example.

While cutting corners on workers’ rights has helped boost airline profits and executive compensation, the impact on fares for passengers is less than meets the eye. As Carl Finamore explained in a 2010 article republished at SocialistWorker.org:

Champions of the free market boast about upwards of a 20 percent reduction in fares since 1978 when airlines were freed to set their own prices without the nuisance of government regulators. But this is very misleading. There are several factors contributing to the decline in prices. For example, booking online has almost entirely eliminated the large commissions of travel agents. Experts state these fees normally accounted for a full 10 percent of ticket prices.

And while it is true that fares to large cities has benefited from increased competition, where it exists, smaller communities have, conversely, seen substantial fare increases as their airports have experienced reduced or lost service. Millions of travelers are also forced to purchase tickets to major hub airports they otherwise would have bypassed during the period of regulation where direct flights to and from smaller markets were offered.

The last major factor making the price of flights misleading is the explosion of fees for everything from luggage to meals to wifi to the ability to board early–coming soon: the surcharge if you would like to not be beaten and dragged off the plane. This has been the single largest source of profits for airlines in the last decade, with Delta alone pulling in $5.7 billion from such fees in 2013 alone.

As Tim Wu pointed out in the New Yorker, this pricing model sets up a perverse incentive:

Here’s the thing: in order for fees to work, there needs be something worth paying to avoid. That necessitates, at some level, a strategy that can be described as “calculated misery.” Basic service, without fees, must be sufficiently degraded in order to make people want to pay to escape it. And that’s where the suffering begins.

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IS THERE any way out of calculated misery?

The current trajectory we’re on doesn’t seem promising. While the past few years saw record profits for airlines in part due to lower fuel costs, as costs begin to rise, we should expect new rounds of crisis, bankruptcies and mergers, all of which will, of course, be apaid for by further attacks on worker and passenger dignity.

Ultimately, we would be wise to heed the words of former American Airlines CEO Bob Crandall that “market forces alone cannot and will not produce a satisfactory airline industry, which clearly needs some help to solve its pricing, cost and operating problems.”

Nationalizing and making the airlines a public utility would be a rational response to the anarchic yet calculated misery of deregulation. In a sane system, we would also look for ways to reduce the amount of air travel, given its carbon footprint, but this would require reorganizing corporate practice and providing affordable, sustainable travel alternatives, such as high-speed rail, as well as providing workers more vacation days to make slower forms of travel feasible.

Of course, we should expect none of these solutions to be forthcoming from the airline executives–least of all under a certain president who, within weeks of taking office, gleefully told a group of them: “You’re going to be so happy with Trump.”

Instead our salvation from the unfriendly skies lies, as an anonymous Delta employee put it recently, in passengers and airline workers joining forces in support of each other:

Instead of indicting each other (employees and passengers), we should focus on fostering solidarity. Many of our interests are the same.

Most obviously, a passenger’s flying conditions are also an airline employee’s working conditions…The declining emphasis put on passenger comfort and airline employee working conditions can be traced back to a common cause: the deregulation of the U.S. airline industry and the relentless pursuit of profit.

https://socialistworker.org/2017/08/10/capitalism-doesnt-give-a-flying-f–k

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Bill Moyers: Donald Trump Is Turning American Democracy into Demolition Derby

NEWS & POLITICS
Affordable health care? Smash it. Fair pay for working people? Crush it. And on and on.

Photo Credit: Moyers & Company

We’re a week into the Trump administration and it’s pretty obvious what he’s up to. First, Donald Trump is running a demolition derby: He wants to demolish everything he doesn’t like, and he doesn’t like a lot, especially when it comes to government.

Like one of those demolition drivers on a speedway, he keeps ramming his vehicle against all the others, especially government policies and programs and agencies that protect people who don’t have his wealth, power or privilege. Affordable health care for working people? Smash it. Consumer protection against predatory banks and lenders? Run over it. Rules and regulations that rein in rapacious actors in the market? Knock ‘em down. Fair pay for working people? Crush it. And on and on.

Trump came to Washington to tear the government down for parts, and as far as we can tell, he doesn’t seem to have anything at all in mind to replace it except turning back the clock to when business took what it wanted and left behind desperate workers, dirty water and polluted air.

In this demolition derby, Trump seems to have the wholehearted support of the Republican Party, which loathes government as much as it worships the market as god. Remember Thomas Frank’s book, The Wrecking Crew? Published in 2008, it remains one of the best political books of the past quarter-century. Frank took the measure of an unholy alliance: the century-old business crusade against government, the conservative ideology that looks on government as evil (except when it’s enriching its allies), and the Republican Party of George W. Bush and Karl Rove — the one that had just produced eight years of crony capitalism and private plunder.

The Wrecking Crew — and what an apt title it was — showed how federal agencies were doomed to failure by the incompetence and hostility of the Bush gang appointed to run them, the same model Trump is using now. Frank tracked how wholesale deregulation — on a scale Trump already is trying to reproduce — led to devastating results for everyday people, including the mortgage meltdown and the financial crash. Reading the book is like reading today’s news, as kleptomaniacs spread across Washington to funnel billions of dollars into the pockets of lobbyists and corporations.

That may include the pockets of Donald Trump’s own family. As Jonathan Chait wrote after the election in New York magazine, “[Trump’s] children have taken roles on the transition team. Ivanka attended official discussions with heads of state of Japan and Argentina. [As president-elect, Trump himself] met with Indian business partners to discuss business and lobbied a British politician to oppose offshore wind farms because one will block the view at one of his Scottish golf courses.” Only a couple of days ago it was reported that the Trump organization would more than triple the number of Trump hotels in America. And why not? Its chief marketer works out of the Oval Office.

Jonathan Chait went on to say: “Trump’s brazen use of his office for personal enrichment signals something even more worrisome than four or more years of kleptocratic government. It reveals how willing the new administration is to obliterate governing norms and how little stands in his way.”

And oh yes, something else: David Sirota at International Business Times has just published a new report showing that the Trump administration appears to be quietly killing the federal government’s major ethics rule designed to prevent White House officials from enriching their former clients. Experts say a review of government documents shows that regulators appear to have abruptly stopped enforcing the rule, even though it remains the law of the land.

We were warned. Donald Trump himself told The New York Times, “The law is totally on my side, meaning, the president can’t have a conflict of interest.” Shades of Richard Nixon, who said, “When the President does it, that means that it is not illegal.” And who also announced, “I am not a crook.”

I know plutocracy is not a commonly used word in America. But it’s a word that increasingly fits what’s happening here. Plutocracy means government by the wealthy, a ruling class of the rich and their retainers. If you don’t see plutocracy spreading across America, you haven’t been paying attention. Both parties have nurtured, tolerated and bowed to it. Now we’re reaching the pinnacle, as Trump’s own Cabinet is rich (no pun intended) in millionaires and billionaires. He is stacking the agencies and boards of government with the wealthy and friends of wealth so that the whole of the federal enterprise can be directed to rewarding those with deep pockets, the ones who provide the bags and bags of money that are dumped into our political process today.Which leads us to the second design now apparent in Trump’s strategy of deliberate chaos. He may have run a populist campaign, but now it appears he aims to substitute plutocracy for democracy.

Yes, both Democrats and Republicans have been guilty of groveling to the wealthy who fund them; it’s a staggering bipartisan scandal that threatens the country and was no small part of Trump’s success last November, even as ordinary people opened their windows and shouted, “We’re as mad as hell and we’re not going to take it anymore.” So now we have in power a man who represents the very worst of the plutocrats — one who knows the price of everything but the value of nothing. I shudder to think where this nightmare will end. Even if you voted for Donald Trump for a reason that truly is from your heart, I cannot believe you voted for this.

Tell me if I’m wrong. Tell me whose side are you really on? The people of America or the cynics and predators at the very top who would climb atop the ruins of the republic for a better view of the sunset?

It’s beginning to look a lot like right before the Great Recession

Lesson unlearned

America looks ready to embrace the kinds of policies that prevailed before the Great Recession

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Exotic mortgages are receiving triple-A ratings. Former Goldman Sachs bankers are swarming the nexus of government and economics. Share prices for bank stocks are surging. Markets are pricing in a series of interest rate hikes. Stock valuations are nosebleed high. Drill, baby, drill. Is it late 2016 or early 2008?

It took the United States roughly half a century to forget some of the lessons of the Great Depression, and when we did, we got the banking crises of the 1980s. With the election of Donald Trump, the U.S. now appears ready to beat that record by about four decades. In a new bout of willful forgetting, America is on the verge of reverting to the kinds of policies that prevailed before — and brought on —  the financial meltdown of 2008 and the Great Recession.

First, the facts. Surprising almost everybody, the stock market has roared ever higher since billionaire businessman Trump won the presidency on Nov. 8. The S&P 500 stock index is up more than 6 percent, climbing to new record highs led by leaps in bank stocks and energy companies.

Another crisis isn’t imminent; by all accounts the U.S. economy looks quite healthy. Unemployment has fallen from a high of 10 percent in October 2009 to 4.6 percent in November. The economy has created new jobs for a record 74 consecutive months. Inflation and interest rates remain low. Corporate profits are relatively high.

Nevertheless, the economic-policy turn expected under Trump could well create some costly messes to clean up sooner rather than later.

Why? The prospect of deregulation.

Trump is expected to loosen the rules governing fossil fuel production, offshore drilling, and exploration on federal lands and the Arctic. Relaxing EPA fuel efficiency regulations would boost gasoline sales over time. The agglomeration of oil and gas industry titans in Trump’s cabinet – most notably Trump’s pick for secretary of state, ExxonMobil CEO Rex Tillerson, and for energy secretary, former Texas Gov. Rick Perry – has energy shares screaming higher (the recent rebound of oil prices has also helped push those stocks up).

Shares of financial institutions are rising on expectations that Trump will fulfill campaign promises to “dismantle” the sweeping 2010 Dodd-Frank Act, which overhauled regulation of a U.S. financial system that had essentially melted down.

Regulation adds costs, at the margin, which have made it less profitable to run giant oil companies and banks in recent years. But lack of regulation also has costs. And when bankers run amok, those costs are almost always borne by the public, at least at first.

During the worst of the Great Recession, American taxpayers were put on the hook for more than $1 trillion in loans to shore up the banking system, as well as hundreds of billions of dollars in ownership stakes in large banks and other institutions. Almost all of it was paid back once the economy stabilized.

But that doesn’t account for the damage done to the economy as a result of the recession, which has been estimated at anywhere from $6 trillion to $14 trillion, according to an analysis from the Federal Reserve Bank of Dallas.

Shareholders should also note that industries gone wild can have huge negative implications for them. The 2010 Deepwater Horizon spill in the Gulf of Mexico ended up costing BP roughly $62 billion, according to the oil giant’s final estimate.

But memories tend to fade: The best-performing stock in the S&P 500 since Trump’s election has been none other than Transocean, the offshore driller that operated the Deepwater Horizon rig.

 

VICE

Sanders’ Social Democracy vs. Trump’s Authoritarian Doctrine

What Trump’s semi-success at the Carrier plant means for the future.

adult experienced industrial worker during heavy industry machinery assembling on production line manufacturing workshop
Photo Credit: Dmitry Kalinovsky

President-elect Trump scored a remarkable victory by saving 1,000 of the 2,100 jobs that Carrier and its parent company, United Technologies, were outsourcing to Mexico. During the campaign, Trump pledged to stop those jobs from leaving the country and he has come through (much credit should be given to the United Steelworkers for keeping this issue alive).

Trump used the plight of those workers, represented by the United Steelworkers, as a battering ram to pummel Hillary Clinton on trade and the loss of decent paying U.S. manufacturing jobs. Now, his partial success could lead to a mass exodus of working people from Democratic party.

The Myth of the White Working Class

Post-election pundits are propagating the false equation that “industrial workers” equals “white working class,” and that Clinton’s crushing defeat in the Rust Belt was the result of a white worker revolt against political correctness — i.e., they’re racists!

But America’s industrial workforce reflects the future, not the past. The 1,400-person Carrier workforce in Indianapolis, for example, is 50 percent African American. Women make up half of the workers on its assembly lines, and 10 percent of the employees are Burmese immigrants.

This means Donald Trump, bigot in chief, has just saved the decent-paying, unionized jobs of women, African Americans, immigrants and white workers. Look out Democrats.

Benign Neglect at the Democratic Party

Trump’s effort to save these jobs contrasts starkly with the failure of the established Democratic Party to do anything at all about such devastating plant closures. President Obama has never used his bully pulpit to mention even one of the thousands of facilities that shifted abroad under his watch. Similarly, Hillary Clinton remained silent about Carrier during her entire campaign, thereby allowing Trump to morph into the champion of the working class.

But none of that is particularly surprising given how deeply Wall Street/corporate elites are embedded within the Democratic Party. More troubling still is that party elites believe these relocations are economically justifiable.

Neoliberal ideology (the holiness of tax cuts, privatization, deregulation, and the free movement of capital) has become the conventional wisdom of the entire political establishment of both parties. The media in particular echoes the inaccurate notion that these facilities must move so that the parent company can keep up with competition. (Carrier, in fact, is leaving in order to secure more funds for stock-buybacks to enrich hedge funds and top corporate officers.) All of this capital mobility is pictured as result of globalization—a force akin to an act of God.

Virtually every article on Carrier opines that Trump’s quick fix cannot alter the technological march that surely will displace these blue collar workers. What they are really saying is the corporations have the right and obligation to move wherever and whenever they wish in order to boost profits and “shareholder value.” Mainstream economists then assure us that, overall, society is better off due lower-cost imported goods and higher value-added domestic jobs, even if a few workers are sacrificed along the way.

But a “few workers” have turned into millions of family members and members of devastated communities who have seen their lives deteriorate. They are heading Trump’s way.

Sanders to the Rescue?

Bernie Sanders saw all this coming. That’s why he challenged Clinton in the first place, and that’s why he’s now trying to capture the Democratic Party and turn it into the champion of working people against Wall Street and “the billionaire class.”

In the case of Carrier, Sanders is calling on Trump not to accept a compromise that will still allow half of the jobs to be moved to Mexico. Staying true to his radical politics, Sanders also is calling for new “Outsourcing Prevention Act” that would:

  1. Bar companies from receiving future contracts, tax breaks, grants or loans from the federal government if they have announced plans to outsource more than 50 jobs to other countries;

  2. Require all companies to pay back all federal tax breaks, grants and loans they have received from the federal government over the last decade if they outsource more than 50 jobs in a given year;

  3. Impose a tax on all companies that outsource jobs. The tax would be equal to the amount of savings achieved by outsourcing jobs or 35 percent of its profits, whichever is higher.

  4. Prohibit companies that offshore jobs from enriching executives through golden parachutes, stock options, bonuses, or other forms of compensation by imposing stiff tax penalties on this compensation.

Reactionary versus Progressive Populism

The stage is set for an epic struggle between Trump’s right wing populism and Sanders-style social democracy. The corporate-driven Democrats may soon be irrelevant. Either they go along with Sanders and compete for the allegiance with working people, or they get pummeled by more working class defections to Trump’s brand of populism.

Sanders believes that neoliberalism is heart of our problem — that it leads to runaway inequality, a rigged political system, an exploitative Wall Street, and the full-scale assault on the living and working conditions of working people — black, brown, white, gay and straight. That system, he believes, also leads to the dramatic rise of incarceration, urban and rural poverty, and the stalling of real wages for the vast majority of the population.

Sanders understands we only can win significant social democratic reforms if we link together the full set of victims (most of the 99%). He’s talking about the kind of programs that will appreciably improve our lives — free higher education, single-payer health care, a major attack on climate change, massive public job creation, real criminal justice and immigration reform, a Wall Street speculation tax and now the Outsourcing Prevention Act.

Getting it Right

It’s too late to take the Carrier victory away form Trump. It won’t work to belittle Trump by claiming it only covers 1,000 jobs, or that too many public tax breaks were tossed to the corporation, or that globalization will eventually make those jobs go away. One thousand jobs means 1,000 families who will not see their incomes slashed in half, or worse. More importantly it means hope, that maybe outsourcing to low-wage countries can be ameliorated.

As a result, Sanders is making a difficult request both of the Democratic Party, and of progressive activists in general. He is asking us to place working people at the center of our work: “The working class of this country is being decimated — that’s why Donald Trump won,” Sanders said. “And what we need now are candidates who stand with those working people, who understand that real median family income has gone down.”

To get there, Sanders is fanning a contentious debate: He argues that the current practice of identity politics is not a complete political program. As he bluntly stated, “It is not good enough for somebody to say, ‘I’m a woman, vote for me.’ That is not good enough. What we need is a woman who has the guts to stand up to Wall Street, to the insurance companies, to the drug companies, to the fossil fuel industries.”

So what does this mean for the efforts of tens of thousands of progressive activists who are deeply engaged in halting climate change, preventing police violence, securing equal rights the LGBTQ community, protecting immigrants, and working on a myriad of other significant causes?

Sanders implies that for any of us to succeed, we all must join the fight to enhance the lives of working people. No matter what our priority issue, we will need to devote time and resources to fight for universal programs that lift us all up. In short, we have to expand our issue silos so that fighting Wall Street and the billionaire class can link us together.Sanders could not be clearer: Either we become a broad-based class movement or we lose. The choice is ours, not Trump’s.

 

Les Leopold is the executive director of the Labor Institute in New York, and author of How to Make a Million Dollars an Hour: Why Hedge Funds Get Away with Siphoning Off America’s Wealth (J. Wiley and Sons, 2013).

 

 

http://www.alternet.org/election-2016/carrier-plant-jobs?akid=14975.265072.Got96S&rd=1&src=newsletter1068440&t=4

Trump outlines right-wing program of extreme nationalism at Cincinnati rally

usa-election_trump-51

By Joseph Kishore and Jerry White
2 December 2016

In a rally in Cincinnati, Ohio on Thursday night, US President-elect Donald Trump outlined the right-wing program of extreme “America First” nationalism of the incoming administration.

The Cincinnati speech was unlike any delivered by a president or president-elect in US history. It was a combination of blatant contradictions, exaggerations, wild hyperbole, empty demagogy and praise for himself as the man who would fix all the problems facing the country. It combined threats against political enemies with pledges to work with anyone and everyone to overcome gridlock and restore American jobs.

While couched in rhetoric about protecting the “American worker,” Trump’s policy proposals centered on massive tax cuts to corporations and deregulation, combined with increasing the size of the military, expanding police powers and sharply curtailing immigration. During the rally Trump also announced that his choice for secretary of defense is retired general James “Mad Dog” Mattis.

Trump’s remarks were clearly shaped and likely written by Trump’s chief strategist, Stephen Bannon, the former head of Breitbart News who has ties to fascistic organizations. Bannon has called for the formation of a new “movement”—a term Trump repeated throughout his remarks—based on economic nationalism and opposition to “globalists.”

A major theme was the need to “unify” the nation in opposition to Washington politicians who have subordinated “American interests” to foreign powers. “There is a lot of talk about how we are becoming a globalized world,” Trump said, “but the relationships people value in this country are local… There is no global anthem, no global currency, no certificate of global citizenship. We pledge allegiance to one flag, and that is the American flag.”

“From now on it is going to be America First,” Trump added. “We are going to put ourselves first… Our goal is to strengthen the bonds between citizens, to restore our sense of membership in a shared national community.”

As was the case during his campaign for president, Trump made a demagogic appeal to social anger over declining wages and social inequality. “Our government has failed to protect the interests of the American worker,” he said. “A shrinking workforce and flat wages are not going to be the new normal.”

There is a vast chasm between this empty populist rhetoric and the personnel that Trump has selected to populate his government. The speech followed a series of cabinet picks, including billionaire asset strippers, Wall Street bankers, and dedicated opponents of financial and corporate regulations, public education and Medicare and Medicaid, to lead the Treasury, Commerce, Education and Health and Human Services departments.

For all his talk of national “unity,” a Trump administration will be one of brutal class war. Trump’s “action plan” is centered on freeing corporations from any restraints on profit-making and exploitation. “Right now we punish companies for doing business in America,” he said. To bring back jobs, the new administration would “massively lower taxes, and make America the best place in the world to hire, to invest, to grow, to create and to expand.”

He added that he would “eliminate every single wasteful regulation that undermines the ability of our workers and our companies to compete with companies from foreign lands.”

Trump touted the deal with Carrier to continue production at its Indianapolis factory, which Carrier’s parent company, United Technologies Corp. (UTC), planned to shut by 2019 and shift production to Mexico. Carrier will retain only 800 of the 1,400 production workers at the plant, and the deal also sanctions the closure of the UTC factory in Huntington, Indiana, which will wipe out the jobs of another 700 workers.

In discussions late last month, Trump told UTC CEO Gregory Hayes that his plans to slash corporate taxes and gut labor, health and safety and environmental regulations would prove far more profitable for the company than the $65 million in annual savings it would gain from shifting production overseas. In exchange for the deal, Carrier was given another $7 million in state tax cuts and other subsidies. It is also likely that UTC, a major defense contractor, was promised even larger contracts under a Trump presidency.

Trump reiterated his proposal for major infrastructure projects, a plan that would be a boondoggle for corporations and essentially hand over public infrastructure to private companies. These measures, combined with greater restrictions on trade, would “usher in a new industrial revolution.”

Trump combined his program of tax cuts and deregulation with a call for sharp restrictions on immigration. “We will restore the sovereignty of the United States,” he said. “We will construct a great wall at the border” and “liberate our communities from the epidemic of gang violence and drugs pouring into our nation.”

Trump said little on foreign policy, except to criticize the $6 trillion spent on wars in the Middle East. He also said the US should “stop looking to topple regimes and overthrow governments” and instead focus on “rebuilding our country.” Under a Trump administration, he asserted, the US “will seek shared interests wherever possible and pursue a new era of peace, understanding and good will.”

In fact, Trump’s “America First” nationalism will be accompanied by a massive escalation of military violence. In his speech, Trump pledged a “national effort to build our badly depleted military” and called for a major campaign to “destroy ISIS.”

More significant is the selection of Mattis as secretary of defense. Mattis is a fanatic anti-Islamic militarist who played a significant role in the US invasion of Afghanistan and led the brutal 2004 assault on Falluja, Iraq. Speaking of his experiences in Afghanistan, Mattis said in 2005 that “it’s a hell of a lot of fun to shoot them.”

While leading US Central Command under Obama from 2010 to 2013, Mattis was critical of the White House for not waging war aggressively enough in the Middle East and for being too conciliatory toward Iran.

In an indication of the dominance of the military in a Trump administration, Mattis would be the first ranking general to be defense secretary since George Marshall in 1950–51. Federal law stipulates that generals must be retired for seven years before leading the Pentagon, but Mattis is expected to get a waiver from Congress. He has the support of Senate Republicans, including Senator John McCain, the chairman of the Senate Armed Services Committee.

Mattis will work closely with Trump’s national security advisor, another retired general, Michael Flynn.

The unions and the Democratic Party have praised Trump, echoing his economic nationalism and echoing the lie that the billionaire real estate mogul, who will head up the most right-wing government in history, is a champion of the working class.

US Senator Joe Donnelly (Democrat-Indiana) said he hoped to work with Trump to “build on momentum created by your agreement with United Technologies” and adopt a federal “outsourcing” proposal that would “deny and claw back certain tax benefits to companies that move jobs offshore.” Directing his comment at Trump, he added, “I strongly encourage you to make it clear that efforts to ship jobs offshore to chase cheap wages will be addressed head on by the Trump Administration. I stand ready to assist in any way possible.”

WSWS

It was the Democrats’ embrace of neoliberalism that won it for Trump

People have lost their sense of security, status and even identity. This result is the scream of an America desperate for radical change

Davos
‘Elite neoliberalism unleashed the Davos class. People such as Hillary and Bill Clinton are the toast of the Davos party. In truth, they threw the party.’ Photograph: Ruben Sprich/Reuters

But this leaves out the force most responsible for creating the nightmare in which we now find ourselves wide awake: neoliberalism. That worldview – fully embodied by Hillary Clinton and her machine – is no match for Trump-style extremism. The decision to run one against the other is what sealed our fate. If we learn nothing else, can we please learn from that mistake?

Here is what we need to understand: a hell of a lot of people are in pain. Under neoliberal policies of deregulation, privatisation, austerity and corporate trade, their living standards have declined precipitously. They have lost jobs. They have lost pensions. They have lost much of the safety net that used to make these losses less frightening. They see a future for their kids even worse than their precarious present.

At the same time, they have witnessed the rise of the Davos class, a hyper-connected network of banking and tech billionaires, elected leaders who are awfully cosy with those interests, and Hollywood celebrities who make the whole thing seem unbearably glamorous. Success is a party to which they were not invited, and they know in their hearts that this rising wealth and power is somehow directly connected to their growing debts and powerlessness.

For the people who saw security and status as their birthright – and that means white men most of all – these losses are unbearable.

Donald Trump speaks directly to that pain. The Brexit campaign spoke to that pain. So do all of the rising far-right parties in Europe. They answer it with nostalgic nationalism and anger at remote economic bureaucracies – whether Washington, the North American free trade agreement the World Trade Organisation or the EU. And of course, they answer it by bashing immigrants and people of colour, vilifying Muslims, and degrading women. Elite neoliberalism has nothing to offer that pain, because neoliberalism unleashed the Davos class. People such as Hillary and Bill Clinton are the toast of the Davos party. In truth, they threw the party.

Trump’s message was: “All is hell.” Clinton answered: “All is well.” But it’s not well – far from it.

Neo-fascist responses to rampant insecurity and inequality are not going to go away. But what we know from the 1930s is that what it takes to do battle with fascism is a real left. A good chunk of Trump’s support could be peeled away if there were a genuine redistributive agenda on the table. An agenda to take on the billionaire class with more than rhetoric, and use the money for a green new deal. Such a plan could create a tidal wave of well-paying unionised jobs, bring badly needed resources and opportunities to communities of colour, and insist that polluters should pay for workers to be retrained and fully included in this future.

It could fashion policies that fight institutionalised racism, economic inequality and climate change at the same time. It could take on bad trade deals and police violence, and honour indigenous people as the original protectors of the land, water and air.

People have a right to be angry, and a powerful, intersectional left agenda can direct that anger where it belongs, while fighting for holistic solutions that will bring a frayed society together.

Such a coalition is possible. In Canada, we have begun to cobble it together under the banner of a people’s agenda called The Leap Manifesto, endorsed by more than 220 organisations from Greenpeace Canada to Black Lives Matter Toronto, and some of our largest trade unions.

Bernie Sanders’ amazing campaign went a long way towards building this sort of coalition, and demonstrated that the appetite for democratic socialism is out there. But early on, there was a failure in the campaign to connect with older black and Latino voters who are the demographic most abused by our current economic model. That failure prevented the campaign from reaching its full potential. Those mistakes can be corrected and a bold, transformative coalition is there to be built on.

That is the task ahead. The Democratic party needs to be either decisively wrested from pro-corporate neoliberals, or it needs to be abandoned. From Elizabeth Warren to Nina Turner, to the Occupy alumni who took the Bernie campaign supernova, there is a stronger field of coalition-inspiring progressive leaders out there than at any point in my lifetime. We are “leaderful”, as many in the Movement for Black Lives say.

So let’s get out of shock as fast as we can and build the kind of radical movement that has a genuine answer to the hate and fear represented by the Trumps of this world. Let’s set aside whatever is keeping us apart and start right now.

Guardian

Neoliberalism – the ideology at the root of all our problems

Financial meltdown, environmental disaster and even the rise of Donald Trump – neoliberalism has played its part in them all. Why has the left failed to come up with an alternative?

Ronald Reagan and Margaret Thatcher at the White House.
‘No alternative’ … Ronald Reagan and Margaret Thatcher at the White House. Photograph: Rex Features

Imagine if the people of the Soviet Union had never heard of communism. The ideology that dominates our lives has, for most of us, no name. Mention it in conversation and you’ll be rewarded with a shrug. Even if your listeners have heard the term before, they will struggle to define it. Neoliberalism: do you know what it is?

Its anonymity is both a symptom and cause of its power. It has played a major role in a remarkable variety of crises: the financial meltdown of 2007‑8, the offshoring of wealth and power, of which the Panama Papers offer us merely a glimpse, the slow collapse of public health and education, resurgent child poverty, the epidemic of loneliness, the collapse of ecosystems, the rise of Donald Trump. But we respond to these crises as if they emerge in isolation, apparently unaware that they have all been either catalysed or exacerbated by the same coherent philosophy; a philosophy that has – or had – a name. What greater power can there be than to operate namelessly?

So pervasive has neoliberalism become that we seldom even recognise it as an ideology. We appear to accept the proposition that this utopian, millenarian faith describes a neutral force; a kind of biological law, like Darwin’s theory of evolution. But the philosophy arose as a conscious attempt to reshape human life and shift the locus of power.

Neoliberalism sees competition as the defining characteristic of human relations. It redefines citizens as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency. It maintains that “the market” delivers benefits that could never be achieved by planning.

Attempts to limit competition are treated as inimical to liberty. Tax and regulation should be minimised, public services should be privatised. The organisation of labour and collective bargaining by trade unions are portrayed as market distortions that impede the formation of a natural hierarchy of winners and losers. Inequality is recast as virtuous: a reward for utility and a generator of wealth, which trickles down to enrich everyone. Efforts to create a more equal society are both counterproductive and morally corrosive. The market ensures that everyone gets what they deserve.

We internalise and reproduce its creeds. The rich persuade themselves that they acquired their wealth through merit, ignoring the advantages – such as education, inheritance and class – that may have helped to secure it. The poor begin to blame themselves for their failures, even when they can do little to change their circumstances.

Never mind structural unemployment: if you don’t have a job it’s because you are unenterprising. Never mind the impossible costs of housing: if your credit card is maxed out, you’re feckless and improvident. Never mind that your children no longer have a school playing field: if they get fat, it’s your fault. In a world governed by competition, those who fall behind become defined and self-defined as losers.

Among the results, as Paul Verhaeghe documents in his book What About Me? are epidemics of self-harm, eating disorders, depression, loneliness, performance anxiety and social phobia. Perhaps it’s unsurprising that Britain, in which neoliberal ideology has been most rigorously applied, is the loneliness capital of Europe. We are all neoliberals now.

***

The term neoliberalism was coined at a meeting in Paris in 1938. Among the delegates were two men who came to define the ideology, Ludwig von Mises and Friedrich Hayek. Both exiles from Austria, they saw social democracy, exemplified by Franklin Roosevelt’s New Deal and the gradual development of Britain’s welfare state, as manifestations of a collectivism that occupied the same spectrum as nazism and communism.

In The Road to Serfdom, published in 1944, Hayek argued that government planning, by crushing individualism, would lead inexorably to totalitarian control. Like Mises’s book Bureaucracy, The Road to Serfdom was widely read. It came to the attention of some very wealthy people, who saw in the philosophy an opportunity to free themselves from regulation and tax. When, in 1947, Hayek founded the first organisation that would spread the doctrine of neoliberalism – the Mont Pelerin Society – it was supported financially by millionaires and their foundations.

With their help, he began to create what Daniel Stedman Jones describes in Masters of the Universe as “a kind of neoliberal international”: a transatlantic network of academics, businessmen, journalists and activists. The movement’s rich backers funded a series of thinktanks which would refine and promote the ideology. Among them were the American Enterprise Institute, the Heritage Foundation, the Cato Institute, the Institute of Economic Affairs, the Centre for Policy Studies and the Adam Smith Institute. They also financed academic positions and departments, particularly at the universities of Chicago and Virginia.

As it evolved, neoliberalism became more strident. Hayek’s view that governments should regulate competition to prevent monopolies from forming gave way – among American apostles such as Milton Friedman– to the belief that monopoly power could be seen as a reward for efficiency.

Something else happened during this transition: the movement lost its name. In 1951, Friedman was happy to describe himself as a neoliberal. But soon after that, the term began to disappear. Stranger still, even as the ideology became crisper and the movement more coherent, the lost name was not replaced by any common alternative.

At first, despite its lavish funding, neoliberalism remained at the margins. The postwar consensus was almost universal: John Maynard Keynes’s economic prescriptions were widely applied, full employment and the relief of poverty were common goals in the US and much of western Europe, top rates of tax were high and governments sought social outcomes without embarrassment, developing new public services and safety nets.

But in the 1970s, when Keynesian policies began to fall apart and economic crises struck on both sides of the Atlantic, neoliberal ideas began to enter the mainstream. As Friedman remarked, “when the time came that you had to change … there was an alternative ready there to be picked up”. With the help of sympathetic journalists and political advisers, elements of neoliberalism, especially its prescriptions for monetary policy, were adopted by Jimmy Carter’s administration in the US and Jim Callaghan’s government in Britain.

After Margaret Thatcher and Ronald Reagan took power, the rest of the package soon followed: massive tax cuts for the rich, the crushing of trade unions, deregulation, privatisation, outsourcing and competition in public services. Through the IMF, the World Bank, the Maastricht treaty and the World Trade Organisation, neoliberal policies were imposed – often without democratic consent – on much of the world. Most remarkable was its adoption among parties that once belonged to the left: Labour and the Democrats, for example. As Stedman Jones notes, “it is hard to think of another utopia to have been as fully realised.”

***

It may seem strange that a doctrine promising choice and freedom should have been promoted with the slogan “there is no alternative”. But, as Hayek remarkedon a visit to Pinochet’s Chile – one of the first nations in which the programme was comprehensively applied – “my personal preference leans toward a liberal dictatorship rather than toward a democratic government devoid of liberalism”. The freedom that neoliberalism offers, which sounds so beguiling when expressed in general terms, turns out to mean freedom for the pike, not for the minnows.

Freedom from trade unions and collective bargaining means the freedom to suppress wages. Freedom from regulation means the freedom to poison rivers, endanger workers, charge iniquitous rates of interest and design exotic financial instruments. Freedom from tax means freedom from the distribution of wealth that lifts people out of poverty.

Naomi Klein documented that neoliberals advocated the use of crises to impose unpopular policies while people were distracted. 

As Naomi Klein documents in The Shock Doctrine, neoliberal theorists advocated the use of crises to impose unpopular policies while people were distracted: for example, in the aftermath of Pinochet’s coup, the Iraq war and Hurricane Katrina, which Friedman described as “an opportunity to radically reform the educational system” in New Orleans.

Where neoliberal policies cannot be imposed domestically, they are imposed internationally, through trade treaties incorporating “investor-state dispute settlement”: offshore tribunals in which corporations can press for the removal of social and environmental protections. When parliaments have voted to restrict sales of cigarettes, protect water supplies from mining companies, freeze energy bills or prevent pharmaceutical firms from ripping off the state, corporations have sued, often successfully. Democracy is reduced to theatre.

Another paradox of neoliberalism is that universal competition relies upon universal quantification and comparison. The result is that workers, job-seekers and public services of every kind are subject to a pettifogging, stifling regime of assessment and monitoring, designed to identify the winners and punish the losers. The doctrine that Von Mises proposed would free us from the bureaucratic nightmare of central planning has instead created one.

Neoliberalism was not conceived as a self-serving racket, but it rapidly became one. Economic growth has been markedly slower in the neoliberal era (since 1980 in Britain and the US) than it was in the preceding decades; but not for the very rich. Inequality in the distribution of both income and wealth, after 60 years of decline, rose rapidly in this era, due to the smashing of trade unions, tax reductions, rising rents, privatisation and deregulation.

The privatisation or marketisation of public services such as energy, water, trains, health, education, roads and prisons has enabled corporations to set up tollbooths in front of essential assets and charge rent, either to citizens or to government, for their use. Rent is another term for unearned income. When you pay an inflated price for a train ticket, only part of the fare compensates the operators for the money they spend on fuel, wages, rolling stock and other outlays. The rest reflects the fact that they have you over a barrel.

In Mexico, Carlos Slim was granted control of almost all phone services and soon became the world’s richest man. 

Those who own and run the UK’s privatised or semi-privatised services make stupendous fortunes by investing little and charging much. In Russia and India, oligarchs acquired state assets through firesales. In Mexico, Carlos Slim was granted control of almost all landline and mobile phone services and soon became the world’s richest man.

Financialisation, as Andrew Sayer notes in Why We Can’t Afford the Rich, has had a similar impact. “Like rent,” he argues, “interest is … unearned income that accrues without any effort”. As the poor become poorer and the rich become richer, the rich acquire increasing control over another crucial asset: money. Interest payments, overwhelmingly, are a transfer of money from the poor to the rich. As property prices and the withdrawal of state funding load people with debt (think of the switch from student grants to student loans), the banks and their executives clean up.

Sayer argues that the past four decades have been characterised by a transfer of wealth not only from the poor to the rich, but within the ranks of the wealthy: from those who make their money by producing new goods or services to those who make their money by controlling existing assets and harvesting rent, interest or capital gains. Earned income has been supplanted by unearned income.

Neoliberal policies are everywhere beset by market failures. Not only are the banks too big to fail, but so are the corporations now charged with delivering public services. As Tony Judt pointed out in Ill Fares the Land, Hayek forgot that vital national services cannot be allowed to collapse, which means that competition cannot run its course. Business takes the profits, the state keeps the risk.

The greater the failure, the more extreme the ideology becomes. Governments use neoliberal crises as both excuse and opportunity to cut taxes, privatise remaining public services, rip holes in the social safety net, deregulate corporations and re-regulate citizens. The self-hating state now sinks its teeth into every organ of the public sector.

Perhaps the most dangerous impact of neoliberalism is not the economic crises it has caused, but the political crisis. As the domain of the state is reduced, our ability to change the course of our lives through voting also contracts. Instead, neoliberal theory asserts, people can exercise choice through spending. But some have more to spend than others: in the great consumer or shareholder democracy, votes are not equally distributed. The result is a disempowerment of the poor and middle. As parties of the right and former left adopt similar neoliberal policies, disempowerment turns to disenfranchisement. Large numbers of people have been shed from politics.

Chris Hedges remarks that “fascist movements build their base not from the politically active but the politically inactive, the ‘losers’ who feel, often correctly, they have no voice or role to play in the political establishment”. When political debate no longer speaks to us, people become responsive instead to slogans, symbols and sensation. To the admirers of Trump, for example, facts and arguments appear irrelevant.

Judt explained that when the thick mesh of interactions between people and the state has been reduced to nothing but authority and obedience, the only remaining force that binds us is state power. The totalitarianism Hayek feared is more likely to emerge when governments, having lost the moral authority that arises from the delivery of public services, are reduced to “cajoling, threatening and ultimately coercing people to obey them”.

***

Like communism, neoliberalism is the God that failed. But the zombie doctrine staggers on, and one of the reasons is its anonymity. Or rather, a cluster of anonymities.

The invisible doctrine of the invisible hand is promoted by invisible backers. Slowly, very slowly, we have begun to discover the names of a few of them. We find that the Institute of Economic Affairs, which has argued forcefully in the media against the further regulation of the tobacco industry, has been secretly funded by British American Tobacco since 1963. We discover that Charles and David Koch, two of the richest men in the world, founded the institute that set up the Tea Party movement. We find that Charles Koch, in establishing one of his thinktanks, noted that “in order to avoid undesirable criticism, how the organisation is controlled and directed should not be widely advertised”.

The words used by neoliberalism often conceal more than they elucidate. “The market” sounds like a natural system that might bear upon us equally, like gravity or atmospheric pressure. But it is fraught with power relations. What “the market wants” tends to mean what corporations and their bosses want. “Investment”, as Sayer notes, means two quite different things. One is the funding of productive and socially useful activities, the other is the purchase of existing assets to milk them for rent, interest, dividends and capital gains. Using the same word for different activities “camouflages the sources of wealth”, leading us to confuse wealth extraction with wealth creation.

A century ago, the nouveau riche were disparaged by those who had inherited their money. Entrepreneurs sought social acceptance by passing themselves off as rentiers. Today, the relationship has been reversed: the rentiers and inheritors style themselves entre preneurs. They claim to have earned their unearned income.

These anonymities and confusions mesh with the namelessness and placelessness of modern capitalism: the franchise model which ensures that workers do not know for whom they toil; the companies registered through a network of offshore secrecy regimes so complex that even the police cannot discover the beneficial owners; the tax arrangements that bamboozle governments; the financial products no one understands.

The anonymity of neoliberalism is fiercely guarded. Those who are influenced by Hayek, Mises and Friedman tend to reject the term, maintaining – with some justice – that it is used today only pejoratively. But they offer us no substitute. Some describe themselves as classical liberals or libertarians, but these descriptions are both misleading and curiously self-effacing, as they suggest that there is nothing novel about The Road to Serfdom, Bureaucracy or Friedman’s classic work, Capitalism and Freedom.

***

For all that, there is something admirable about the neoliberal project, at least in its early stages. It was a distinctive, innovative philosophy promoted by a coherent network of thinkers and activists with a clear plan of action. It was patient and persistent. The Road to Serfdom became the path to power.

Neoliberalism’s triumph also reflects the failure of the left. When laissez-faire economics led to catastrophe in 1929, Keynes devised a comprehensive economic theory to replace it. When Keynesian demand management hit the buffers in the 70s, there was an alternative ready. But when neoliberalism fell apart in 2008 there was … nothing. This is why the zombie walks. The left and centre have produced no new general framework of economic thought for 80 years.

Every invocation of Lord Keynes is an admission of failure. To propose Keynesian solutions to the crises of the 21st century is to ignore three obvious problems. It is hard to mobilise people around old ideas; the flaws exposed in the 70s have not gone away; and, most importantly, they have nothing to say about our gravest predicament: the environmental crisis. Keynesianism works by stimulating consumer demand to promote economic growth. Consumer demand and economic growth are the motors of environmental destruction.

What the history of both Keynesianism and neoliberalism show is that it’s not enough to oppose a broken system. A coherent alternative has to be proposed. For Labour, the Democrats and the wider left, the central task should be to develop an economic Apollo programme, a conscious attempt to design a new system, tailored to the demands of the 21st century.

https://www.theguardian.com/books/2016/apr/15/neoliberalism-ideology-problem-george-monbiot