The Conservative Nanny State : A Book Review Part Three : Myths of Corporations and Truths of the Federal Reserve

Continuing our series of analysis on Dean Baker’s The Conservative Nanny State, we attempt to disrobe the corporation as the nanny state fraud it has become, and demystify the role of the Federal Reserve in profoundly affecting the livelihoods of low income earners.

In the Beginning, God Created the Corporation…

Baker offers quite a thoughtful analysis around the mythology surrounding corporations, a key feature of the conservative nanny state.  The typical argument is that corporations, free and independent, would follow the market harmoniously but for unnecessary, inefficient government interference; this laughable, demonstrably false assertion is an astonishing feat of propaganda, given even a slight historical context.

Helpful in this discussion is a few notes on the definition and history of what is this assumed-to-be essential feature of a market system : in Anglo-American law, a corporation, historically, was an organization created by a state-issued charter to raise capital for advancing some good-will state objective, such as building a bridge or paving roads.  Incorporation was a temporary status, as corporations generally (with a few notably understandable examples, such as in those managing railroads, trade, and shipping) dissolved upon completion of the state’s tasks appearing explicitly in said charter.  Charters of increasingly long duration appeared as the machine of war industry raged feverishly during America’s conflict with Britain in 1812, as discussed more thoroughly in Mansel Blackford’s The Rise of Modern Business in Great Britain, the United States, and Japan.

So if the corporate charter historically traces roots to some set of concrete state goals, why ought investors bother asking the government for articles of incorporation for other business endeavors?  After all, businessmen were free, as they certainly are now, to form partnerships to accomplish whatever financial objectives they chose.  It turns out that articles of incorporation offer something that private partnerships do not : limited liability, or state-conferred immunity for shareholders from both civil and criminal penalties, as well as a guarantee that personal losses cannot exceed the value of one’s investment in said corporation.  That is to say, I can invest, say, $100 in a corporation.  If the corporation commits any and all manner of illegality, I cannot to a large extent suffer any legal charge or punishment, unless I were actually “directly” complicit in the crimes.  More clearly, an investor is not liable for damages rendered with his investment, unless he directed or carried out damages himself.  Further, if my $100 becomes $1000, I get to keep the $900 profit.  But if the company files for bankruptcy with colossal debts say proportionate to thousands or millions with respect to my original investment, I can only lose my $100, and nothing more; lenders to the corporation eat the cost.  Sounds like a fantasy, doesn’t it?

This happens to be an example of what Baker terms takes, or one-sided exchanges offered by the nanny state to individuals.  In data science and statistics, we have another term for this phenomenon : a capped loss function, a loss being a penalty we incur given some random event.  A curious, yet substantial boon for shareholders is that of capped, left-skewed loss function; that is, they take a risk in investing their money, but they can lose no more than that, even if a company, such as Lehman Brothers, defrauds millions with overly risky speculative financial instruments, as in the financial crisis of 2007, or the Enron bankruptcy in 2001, costing thousands their retirements.

It shouldn’t be a surprise that now the government forges charters of indefinite duration.   And the masters of these corporations want more than just the perks listed above : they claim these tyrannies are, in fact, flesh-and-blood persons.  For instance, we can point to the infamous Citizens United decision in the U.S. Supreme Court in 2010 declaring that corporations can contribute vast sums to political causes under the guise of first amendment protection.  More recently, a 2014 decision in Burwell v. Hobby Lobby Stores, Inc. asserted freedom of religion for corporations by exempting them from the mandate to provide contraceptive care under the Affordable Care Act.   Though these decision receive deservedly bad press about being turning points in corporate take-over of our democratic institutions, it’s worth remembering that corporations have enjoyed the rights of personhood for quite a long time.  In 1886, the Supreme Court declared that corporations should receive equal protection under the Fourteenth Amendment of the Constitution in Santa Clara County v. Southern Pacific Railroad Co., despite the intent of the amendment being protection for emancipated slaves.  For more on the history of the corporate personhood dogma, see a report by the Brennan Center for Justice.

So Baker is quite correct in asserting that such a Big Rock Candy Mountain experience wouldn’t be imaginable without a powerful nanny state to guarantee its advantages.  Further, he argues quite pointedly that

...a serious discussion must begin with a
basic truth : the corporation does not
exist in a free market[,]

meaning the free market ideology wouldn’t bear risk of the magnitude corporations routinely undertake.  A familiar theme by now should be that the fantasy begins and ends with government intervention.  Another amenity Baker raises is shareholder anonymity : if I want to invest in a company which participates in child labor exploitation where it’s legal, I can do so without much concern about being discovered.

As it turns out, this is increasingly unavoidable with creation of multinationals, or conglomerates of varied businesses who deal across continents where legal protections for citizens vary.  It might not come as a surprise that these multinationals tend to farm out factory and dangerous work to countries where they need not observe ethical labor practices; Amnesty International has long documented such practices in Indonesia, including slave and child labor on palm oil plantations.  Other examples include Apple’s use of child labor through the manufacturing giant Foxconn and Walmart profiting from prison labor, though we can point to countless other examples of labor abuse, human trafficking, and complicity in organized crime, documented in various media reports and by the International Consortium of Investigative Journalists.

And as it turns out, the story gets worse : what should be a state tool designed to improve the general welfare has enjoyed ever-diminishing oversight while a narrowing of focus : in 1919 the Supreme Court ruled that profits are the lone objective of incorporated companies in the decision Dodge v. Ford.  That is, not only are they a shield from prosecution for shareholders and a safety net against personal financial liability, they must pursue profits, placing any other priorities as secondary.  Everything else is public relations, something to which we’ll return later.  Sounds rather destructive, doesn’t it?

 We can actually point to a much more comprehensive list of corporate atrocities in the name of profit-seeking, such as

  • vicious atrocities in Central America (described somewhat in earlier posts) perpetrated by the United Fruit Company, as described in Big Fruit,
  • business decisions to intentionally continue production of the ill-fated Ford Pinto, discussed in Mother Jonesdespite critiques of the hype of the article, the central thesis remains : Ford executives decided killing customers was the right business decision,
  • the deliberate contamination of Hinkley groundwater by Pacific Gas and Electric, the subject of the film Erin Brokovich,
  • the deliberate cover-up and falsification of research linking sugar consumption to heart disease and obesity by the Great Western Sugar Company, carefully documented in the film Sugar Coated,
  • the falsification of research by tobacco firms, documented in the thriller The Insider,
  • the burying of significant scientific research on climate change for forty years by Exxon Mobile, documented by Exxon Knew,

and so on.  In each of the cases, shareholders could lose no more than the value of their investment, despite their money financing criminal actions.  This is an extremely important point, worth belaboring.  If I personally hired someone to poison my community’s water supply, I could face capital murder.  But if I pay a corporation to do it as a shareholder, I’m in the clear.  Certainly we can argue about fine legal points such as intent, but the metaphor is apt with respect to outcomes.  So Baker suggests conservatives and market ideologues whining about the minimal government oversight of these tyrannies remember that they can always go into business together through private contracts, surrendering this limited liability.  In any case, they don’t want markets nor personal responsibility, often repeated ideals of the conservative nanny state; rather, they want a welfare safety net for themselves.

Baker nicely summarizes with the following :

[i]t takes a conservative nanny
state to create an institution...
that allows investors to cause
harm and not be held accountable.

Baker continues with more highly elucidating discussion on corporate perks, all worth reading, but I’ll move on after addressing one point I find rather important which will come up again later : the corporate income tax.  Donald Trump’s incessant shrieking that the corporate income tax being too high echoes repeated mantras from conservative pundits and think tanks (like U.S Chamber of Commerce and the ultra-conservative Heritage Foundation), complaining of crushing of entrepreneurial initiative and unfair “double taxation.”  And yet these purveyors of the nanny state fail to mention that many of the largest corporations for whom they serve as mouthpieces never pay a penny through this tax, as documented by the Institute on Taxation and Economic Policy.  Further, even if we suspend belief to partake of the melodrama, this is a very, very small price to pay for the aforementioned incredible legal protection.  So Baker correctly points out that this is a voluntary tax, meaning individuals need not incorporate to do business; the tax is a fee for the overwhelming advantage of limited liability, among other amenities conferred by government-issued charters.  If entrepreneurs don’t want to pay the fee, they can assume the risk.

So what is a reasonable, market-based alternative?  As discussed earlier, Western European countries offer some interesting possibilities.  Further, worker-owned corporations (documented earlier by the National Center for Employment Ownership), limits on charter issuance, and requirements within the charters for leadership to be liable to stakeholders rather than just shareholders would be a good start.  If all else fails, traditional contracts and partnerships are perfectly suitable approaches.

Even beyond charter issuance, most large corporations owe their beginnings to extreme government investment and intervention, something Baker calls takes, to which we’ll return later.  In that vein, how about a return-on-investment for taxpayers?  Walmart wouldn’t have been possible without the Interstate Highway System; Amazon wouldn’t be possible without the internet; where’s the taxpayer’s return?

Among the objections to the aforementioned, corporatists like to claim that “stakeholders” are customers, and that they vote with their dollars, leading to a perverse propaganda that corporations actually aren’t tyrannies.  Even if we are to believe such a preposterous framework, one must have a dollar to vote under said theory, marginalizing the poor and the disinterested customers immediately.  More still, this framework is even more preposterous when we consider externalities, or effects of transactions not taken into account.  For instance, Walmart may decide to build a supercenter near me, multiplying traffic by a factor of twenty and causing awful pollution, yet, they don’t simply vanish just because I don’t patronize their stores.  Further, even high school students learn about oligopolies and the aforementioned U.S. Chamber of Commerce, examples of special interest collectivism designed to diminish the well-known destructive effect of markets on profits; with a twist of irony, they also hate collectivism when leveraged by working people (code-named unions), to which we’ll return later.  In any case, these purveyors of the nanny state may decry these possible reforms as “government meddling in the economy”, but the corporation is  by definition precisely that.  Another objection is that progress slows without the risk protection conferred by the nanny state, as investors won’t want to take chances with their savings.  Considering that we’re decimating the ecology around us, perhaps some forms of “progress” ought to slow down.  In any case, requiring these corporatists to accept personal responsibility in making careful, conservative, thoughtful investments is better aligned with the demands they make of poor people everyday.

In summary, conservative nanny state mythology demands we accept as a law of nature that corporations are an essential feature of the most optimal economic strategy, a proposition easily debunked with elementary analysis.  Again, corporations would not survive in a true market-based system.  Alternatives are appearing throughout the economic landscape, as we’ve mentioned earlier.

What is the Federal Reserve?

Baker continues his discussion of the nanny state by unveiling the purpose of the Federal Reserve; its chairperson, a position previously held by appallingly lauded Alan Greenspan, wields perhaps the greatest power over the economy of any individual.  By shifting the so-called federal funds rate, or the short-term rate for lending between banks, this chairperson can adjust the speed of the economy; cutting rates increases lending, borrowing, and job production, while hiking them has the opposite effect.

Perhaps the dirtiest secret of this process is a preplanned unemployment rate, meaning that in order to ensure downward pressure on wages in large segments of the economy, a steady, large supply of unemployed workers must remain available.  Ironic as it seems, this heavy-handed intervention in the economy seems perfectly natural to free market ideologues, as they generally are among the beneficiaries of such policies.  Baker discusses the Beige Book, a report published by the Federal Reserve eight times a year; during periods of low unemployment, particularly 1997 to 2000, employers lamented the increased benefits and wages necessary to entice employees from other companies, even in trades traditionally plagued with low income in the neoliberal period.  As vicious and malevolent as this form of social planning might seem, elites claim it is necessary to ensure inflation remains stable.  The human cost seems less important, as employers enjoy more access to the Federal Reserve board members, and competing on the open market for employees is something they’d prefer not to do.  Baker further discusses how Greenspan disproved conventional thinking by economists of the day that low unemployment would accelerate inflation in the late nineties, undercutting the very rationale for retaining a buffer of unemployment.  Likely, precluding inflation is a convenient cover for pressing a large swathe of the population into stagnation.  Baker describes a bit of the makeup of the agency itself, referring the reader to the official website for more detailed explanations.

Suffice it to say, the governing bankers and economists vary greatly in policy design regarding inflation and unemployment, and Baker very correctly points out that a one or two percent rise in unemployment matters significantly less to well-compensated bankers than to autoworkers or other tradespersons of mid-to-low income.  Conversely, said bankers likely will balk at even meager increases in inflation, considering this undercuts the value of existing loans.  Baker’s point is that the very people running the Federal Reserve carry a heavy bias toward policy hostile to most of the working class, something rather obvious when one considers the matter seriously.  He further remarks that the most recent three chairmen, Paul Volcker, Alan Greenspan, and Benjamin Bernanke enjoy fanciful reputations as “inflation fighters,” generally with little-to-no acknowledgement of the overwhelming sacrifices demanded of working class people who lose their jobs when these fighters hike interest rates to stem inflation. In fact, Baker, Andrew Glyn, David Howell, and John Schmitt discuss remarkable alternatives to controlling inflation with unemployment in Unemployment and Labor Market Institutions: The Failure of the Empirical Case for Deregulation; they discuss substantive case studies in collective labor bargaining with employers in Sweden, Ireland, and other western democracies, finding that when workers’ associations assess wage change on the economy at large, both inflation and unemployment remain lower than those in the United States.  Unfortunately, the vicious assault on collective bargaining here in the states has shriveled union participation to less than ten percent of workers; by contrast, a large majority of working class people in the aforementioned democracies are card-carrying union members.  And it benefits them greatly.

Next time, we’ll discuss unions more thoroughly, along with special nanny state provisions which contravene markets.

The Conservative Nanny State : A Book Review Part Two : Job Protectionism and Differing Sets of Rules

Continuing our discussion of Dean Baker’s The Conservative Nanny State, we’ll address a powerful function of the nanny state : job protectionism.  Conventional wisdom among the elite and intellectual sector is that though lower income earners face harsh competition because of a heightened labor supply (read : too many people vying for the same job), we in the higher income brackets don’t face competition because we were sufficiently lucky or prudent to seek work for which little labor supply exists.  It turns out that this self-congratulation is a bit premature.

Poor People Should Compete with Foreign Workers, But I Don’t Have To… I Shouldn’t Have ToHelp Me Nanny State!

Baker begins with discussing a rather well-known feature of the neoliberal program : the offshoring of labor and the import of foreign labor which pits low-to-mid income earning tradespersons in the United States against very cheap labor in the third world.  Thus, despite close to a doubling of the economy and worker output since 1980, these income earners’ wages have quite predictably stagnated.  Despite this, those of us in the top five percent have experienced great wealth gains in the same period, also a rather well-known but perhaps harder to explain phenomenon.  Baker suggests that the stock answer to why this is the case tickles the ears of the purveyors of the conservative nanny state, as highly compensated persons in the aforementioned bracket are important in maintaining the mythology : go to school, work hard, then make big bucks; those who ignore this advice deserve poverty.  In fact, highly educated acquaintances of mine from across the political spectrum often happily claim that the sum total of their income is due to their substantial, innate value after heeding the mythology, yet poor people either should get off their lazy asses (the conservative version) or utilize government incentives for vocational training (the so-called liberal version), a dichotomy Baker coincidentally references almost verbatim.   So what is the truth?  Baker offers a rather astonishing observation : the U.S. immigration policy, discussed in Eric Freeman’s Barriers to Foreign Professionals Working in the United States, along with protective licensing agencies and diffuse, indeterminate standards, ensures that fewer highly skilled professionals are available than are needed.  A few years ago, both the New York Times and The Atlantic offered a discussion of the difficulties facing foreign doctors in obtaining licenses to practice medicine in the U.S., describing the labyrinthine procedural hurtles depriving these competent, well-trained, desperately needed professionals of a career here in the States.  The New York Times reported in 1997 that the U.S. government actually paid hospitals in New York not to train foreign doctors.  Imagine if the U.S. government actually paid an automotive firm not to offshore manufacturing?  Baker continues by spelling out the cost of this protectionism, coinciding nicely with its very justification :

[i]f free trade in physicians brought doctors'
salaries down to European levels, the savings
would be close to $100,000 per doctor,
approximately $80 billion a year... [ten]
times as large as standard estimates of the
gains from NAFTA.

It’s worth remembering that the absurdly mislabeled “free trade agreements” NAFTA and CAFTA have virtually nothing to do with higher-compensated trades such as doctors, lawyers, and technocrats.  After all, it wouldn’t do to compete with every competent Chinese or Indian doctor, even if the healthcare savings conferred to the weary working class would be immense.  Yet anecdotally, doctors tell me that skyrocketing tuition, malpractice insurance, and the cost-of-living require much higher salaries.  Baker doesn’t address tuition and rising costs-of-living directly in this book, though I speculate he’d attribute at least the former if not both to the conservative nanny state.  Noam Chomsky has speculated that tuition hikes are a mechanism for control of young college students rather than an economic necessity in sustaining the university system.  Baker’s point here is that the protectionist barriers for doctors, lawyers, and technocrats have absolutely nothing to do with market principles, as none of us could compete in an absolutely free and open market with the wages we receive today.  The incredibly high cost of the American medical system drives hundreds of thousands of people into bankruptcy each year, roughly sixty percent of the 1.5 million people who file each year, according to The Huffington Post in 2015, no doubt partially explaining a phenomenon known as medical tourism, or Americans traveling abroad to receive medical treatment.  CNN reports that the increasingly growing industry grants Americans access to world-class healthcare at maybe thirty to forty percent the cost of the same care here.

Yet another device of protection for physicians is the American Medical Association, an organization of physicians with substantial political clout, largely responsible for ensuring tough immigration standards and difficult standards.  It turns out we have another label for this : a trade union.  “Union” has become a terribly dirty word in Americana, as what should be a revered, indispensable public institution has largely succumbed to a massive, unremitting campaign of propaganda; we’ll return to this topic shortly.

So is this really happening?  Baker suggests that denialism is the most widely cited defense against these allegations.  He refers to hilarious anecdotes such as “my doctor is Pakistani” as the defense mounted by those who stand the most to lose by acknowledging this protectionism.  I could make the same observation that I’ve worked with many foreigners over the course of my career in technology, so even my initial knee jerk response was disbelief.  Baker retorts that citing a Mexican avocado in an American grocery store as proof that the U.S. government doesn’t restrict agricultural trade would receive unbridled derision and heart laughter right out of the economics profession.  Per Baker, we should treat this denialism in kind.  He argues, rather poignantly, that

[t] truth is that the "free traders" don't
want free trade--they want cheap nannies--
but "free trade" sounds much more noble.

So what can we do?  First, we recognize the protectionism extant in our own fields; next, we recognize the solidarity we should share with those less fortunate tradespersons not conferred the enormous benefits of said protectionism.  Finally, we fight for a better path forward.  Baker’s proposal, which he by no means claims is the only means of improvement, is to enact true free trade agreements which establish international standards meeting or exceeding our own in each industry.  Further, highly-skilled professionals migrating to America could pay a percentage of their incomes back to their home nation for the purpose of training other professionals; many repatriates send money home to their families in any case, generating demand in third world nations, an obviously desirable feature if we’re to speak of serious market application.

Baker ends this section with an important point about a more egalitarian market-based approach reducing salaries for highly compensated earners : if the cost of doing business falls because of an increased pool of workers, the cost transfers to the population at large.  This, in turn, tends to reduce the cost of living for everyone.  None of these changes would happen immediately, but it’s nonetheless worth remembering that reductions in healthcare costs means more money for wages for everyone, including those of us in the technocracy.

The other point worth making here is that protectionism, if applied at all, ought to apply equally.  Factory workers, welders, and janitors ought to receive equal protection for their livelihood.  As we’ve suggested before, the rise of Trump easily follows from a highly disenchanted working class marginalized by globalization and a hostile overclass enemy; these are issues not just critical to good citizenship, but now perhaps for the very survival of our species.

Never Make a CEO Compete…

Before moving on, I feel it’s important to address thoroughly one point Baker omits in his discussion on protectionism for the well-to-do (though he picks up the general topic later in the book) : the most highly-compensated sliver of the economy, particularly CEOs.  I’ve worked in technology companies for over a decade, some of whom are in the Fortune 500, and an (admittedly) anecdotally pervasive theme is the frustration with, disapproval of, and devaluing of each respective executive leadership team.  Generally the sentiment is that chief executive officers (CEOs) and their directs are pampered, overpaid, egotists whose positive contribution dwindles as the machine grows : by the time corporation reaches a slow stage of monolithic decay, say as in a defense contractor, the CEO doesn’t seem to serve any function except to drain resources from the remaining parts of the business.  My first job, stated before, was in precisely such a company, and we referred to the executives collectively as “mahogany row,” owing to the rather beautifully polished paneling in their luxury, separate-but-not-equal building complete with covered parking (fellow Texans understand that perk, considering heat and hailstorms).  Our offices, by contrast, reminded me of my elementary school : seemingly ancient construction with doubtless asbestos-filled flooring and lowered ceilings to conceal the cigarette smoke stains, an artifact of the smoke-filled days of yesteryear.  In any case, my thinking is somewhat more elementary : whatever skills an executive requires to perform his duties no doubt exist elsewhere.

Considering the well-documented, exorbitant increase in CEO pay with no obvious, market-based cause, we might suspect they somehow are gaming the system.  Baker describes CEO pay later in the book, referencing L. Mishel, et al.’s The State of Working America, an exposition on the stunning explosion of the CEO-to-average worker pay factor, roughly forty in the 1970s, obscene three hundred in late 1990s, then back to still obscene two hundred as of the mid 2000s.   He also points to The Growth of Executive Pay by Lucian Bebchuk and Yaniv Grinstein, a discussion measuring pay of the top five executives in each of 1500 corporations over 1993 to 2003; they conclude that CEO pay jumped at least twice as quickly as could be explained by a number of success metrics, including company profits, industry mix (concentration by region of business types), and market capitalization (the total value of the corporation).  That is to say, scarcity and demand of a business, value of the business, and profitability of the business fail to explain skyrocketing executive pay over the period studied.  Continuing with Mishel’s analysis, Baker explains that CEO pay in the United States is two-and-a-half to five times larger than that of CEOs in Canada, France, and Japan, despite industry leaders in these nations wresting substantial market share from their American competitors, meaning the American system somehow rewards incompetence with skyrocketing wages.  Worse yet, American executives often enjoy zany contract clauses conferring the so-called golden parachute, a severance package so exorbitant that ordinary Americans could easily retire on it.  Imagine living in a world where taking a job is win-win; even if you find yourself fired for aforementioned incompetence by the board of trustees, you’ll depart with barrels of cash.  Aside from the astonishingly anti-market nature of this practice in principle, there are many measurable, deleterious effects in action as well, documented in Bebchuk et al.‘s “Golden Parachutes and the Wealth of Shareholders” appearing in the Journal of Corporate Finance.  In any case, the practice persists : what a country club indeed.

So what explains stratospheric CEO pay?  It seems rather elementary, as American CEOs can raise their own wages by appointing friends to his corporate board, the body responsible for setting his wages.  He, in turn, serves on their respective boards, returning the favor in a spectacularly golden tsunami of quid pro quo, unaccountable to shareholders because of the difficulties of organizing them and the many shenanigans encoded in the corporation’s charter, such as stock proxying; that is, if the shareholders hold a vote on replacing the current CEO, any shareholder who fails to vote by default votes for the CEO to remain.  Imagine if that were common practice in our government elections : the incumbents would be virtually unbeatable!  Baker concludes his chapter on CEO pay with suggestions on how to improve the system, including tying executive pay not to profits only (such as what happens when the cost of oil skyrockets), but relative performance to the industry, and more Congressional oversight.  He cites the Private Securities Litigation Reform Act, passed by Newt Gingrich’s Congress in 1995 over Bill Clinton’s veto to further diminish shareholders’ access to the courts when executives manipulate stock prices, as an example of the power Congress can exercise, though this was in a destructive direction.  As usual, empowering the super-rich and undercutting everyone else somehow receives the lyrical moniker “reform”, a staple of the conservative nanny state’s propaganda.

It turns out there’s more to the story on how CEOs siphon vast cash reserves from corporate profits above and beyond what first-order effects can explain : anecdotal discussions with corporate insiders reveal a rather odd practice of organizing compensation committees intent on basing CEO pay on some arbitrary percentile, say the seventy-fifth, of market pay.  Any astute data scientist understands such implications : a steady-state solution requires CEO pay to grow until all resources deplete.  That is, if a CEO joins a company, the committee decides his pay should target the 75th percentile.  By increasing the rate of pay of a single CEO, the 75th percentile gradually eases upward independent of other market metrics.  Recent scholarship by the Economic Policy Institute lends credence to rather dodgy practice, apparently owing to what economists call “rents”, or excessive increases in market cost for whatever purpose. Aside from the silly, baseless justifications for this practice, why not let CEOs compete on the open market?  Again, to one of Baker’s central theses, markets simply aren’t the desired mechanism for these folks.

So how can we make these folks compete?  We’ll touch on corporations in an upcoming part of the series, but suffice it to say there are many examples of worker owned businesses, documented by the National Center for Employee Ownership in 2016, designed often so that if employees want management changes, they fire their leadership.  Imagine if an incoming CEO recognized fully that he is accountable to the employees?  It turns out that employee-owned companies could be a means of requiring the shareholders and the stakeholders to be more closely aligned.  Another key question is to what extent an organization of employees needs a CEO : decentralized autonomous organizations represent one extreme possibility, in which leadership largely follows computer-encoded rules; some of these organizations exist as of the time of this writing.  Certainly, a robot CEO wouldn’t ask for extreme pay.  In any case, it seems as though more democratic control within the organization could ensure that unnecessary leadership overhead vanishes, and where leadership is required, greater control would rest with the employees; perhaps employees could take turns playing the CEO.  In the world of start-ups and technology, businesses could operate more easily in this mold, adopting as part of their charter a constitution, if you will, fostering a more egalitarian, democratic operating principle.  As Baker points out, and we’ll discuss it more thoroughly later, the classic corporation framework isn’t necessarily the optimal solution (and we have pretty good evidence to the contrary), nor is it a law of nature.

We’ll continue in the next discussion with trade unions, and Baker’s definition of the Federal Reserve.

The Conservative Nanny State : A Book Review Part One : An Introduction

In a series of posts, we’ll be analyzing and reviewing Dean Baker’s The Conservative Nanny State, an excellent discussion of the mythology of conservatives with respect to the government, corporations, and economics.  Instructive is how this mythology can apply in recent events, a review of which follows.  Donald Trump may serve an ideology of nothing more than “me first,” but behind the scenes, the nanny state machine continues to perpetuate a heavily propagandized mythology of markets, capitalism, and government..

All in a Day’s Work : Conservative Market Mythology

Donald Trump’s recent tantrums around the Republican failure to “repeal and replace” the Affordable Care Act adorn the craven, viciously insipid strategy of the Paul Ryan / Mitch McConnell crowd : for eight years, they’ve vowed incessantly to supplant Obamacare with a better version upon gaining both majority power in Congress and a rubber stamp in the White House, yet in those eight years, they’ve managed to formulate absolutely nothing in the way of a cogent substitute.  This bears repeating : despite more time than is necessary to complete a doctorate in the most abstract, difficult theoretical fields in mathematics, the devout acolyte of Ayn Rand that is the vapid Paul Ryan has formulated absolutely no solution to our healthcare quagmire, aside from the tired, intellectually bankrupt admonishments of impotency about poor people being lazy and workers not trying hard enough.  Subject to the market fanaticism they worship so completely, they should be fired immediately for such astonishingly blatant incompetence.  Trump, by slight contrast, seems to care nothing for the details, wanting only to piss all over every last accomplishment of Obama; never mind all the campaign promises of universal healthcare.  He prefers to destroy Obamacare now, perhaps unaware of the malevolence and cruelty in destabilizing the exchange and kicking off coverage at least twenty to thirty million people, a estimate reported by NPR.  He’s apparently too busy

and so on.  His character assassination of Sessions for attention seems to be the last straw among a mountain of bundles, drawing ire from his shrieking media base of support (documented in The Atlantic) since Sessions is an alternative right folk hero.  Noteworthy is a quote from an arch-conservative writer for The American Conservative, Rod Deher, who didn’t support Trump but bears rather preposterous ideas :

I believe the Democratic Party today wants to
do as much damage as it possibly can to social
and religious conservatism. I believe the
Democratic Party would empower some of the worst
people in America. But at least you know what
they’re going to do. Trump really is an unstable
lunatic whose word means nothing, and who sees no
higher obligation than serving himself.

Certainly, the fact-free fantasy land of the conservative establishment is nothing new, ranging from the Powell memorandum discussed in earlier posts, to Reagan’s supply-side blather denounced even by George H.W. Bush as “voodoo economics”, to Trump’s mind-numbingly stupid insistence of widespread voter fraud by illegals, to Mike Pence’s insistence that smoking isn’t harmful,  to Pat Robertson’s claims that Trump represents God’s will, and the list continues.  Supply-side economics, like the young earth hypothesis, seems immortally immune to the colossal three-decade record of failures, long documented by the Center for American Progress.  Take the recent shenanigans in Mississippi and Kansas : both state governments slashed taxes with the promise of economic boosts, and both states have subsequently slashed services, some with disastrous import, such as curtailing of medical school faculty salaries.  Astoundingly, the party of so-called “fiscal conservatism” seems not to understand why less water flows when one turns the faucet down.

Big Government and the Poor : Supervillains

Conservatives and so-called new Democrats have long argued that so-called “big government” is universally a bad thing, indicative of avaricious largesse at best and vicious totalitarianism at worst; from my early life, I’ve heard conservatives in my home state of Texas bemoan the overwhelming burden of government regulation and taxation asphyxiating an otherwise highly efficient, wealth-and-job-creating small businesses. They argue further that welfare, otherwise known as Temporary Assistance for Needy Families (TANF) poisons the resolve of potential workers and feeds a lazy, repulsive underclass always in the market for cheating hard-working business owners out of their hard-earned profits.  So deep was the racism and disdain for welfare recipients that we greatly feared the marginalized black community in my hometown, despite having been on the welfare rolls ourselves soon after my mother and father divorced back in 1987, the irony being that we as poor whites had more in common with the poor blacks than we did upper middle class Texans.  Despite my college curriculum lifting partly the veil of ignorance, at least with regard to history, I nonetheless took my first “big-boy” job at a defense contractor believing, rather naively, that the conservatives there really were serious about eliminating government waste and pursuing honest efficiency to benefit the organization.  Imagine my surprise to discover that almost the exact opposite is the case : with some notable exceptions (see my LinkedIn connections), the organization was rife with effete, wasteful protectionists, all-too-willing to bend contractual obligations with the U.S. government to butter their own bread and conceal their incompetence.  Supplanting genuine concern for the government customer was a sneering cynicism at even their most sacred public institution of all : the military.  They held contempt even for arch-conservative Dick Cheney himself, as he had a long history of opposing the Osprey V-22 program in the first Bush administration.  In the more religious pockets of my social sphere of those days, welfare recipients were the target of ire, with the lobotomous justification that “the heart is desperately wicked… who can know it?”  That is, the innate wickedness of the human creature discussed in the Bible suggests that helping a poor person ever is a mistake contravening the will of the Most High; only the filthy rich deserve a second thought.  Then again, local faith leaders in my home community offered social commentary on a vast array of topics, including dubious claims that Santa Claus, in fact, is a woman masquerading as a jolly old man (Santa somehow sounded female), that Rudolph the Red Nose Reindeer, is in fact an alcoholic (owing to a condition known as telangiectasia), and perhaps most intriguing, that devotees of Catholicism are, believe it or not, addicted to cats.  Serious analysis aside, ahem, Pat Robertson would no doubt explode with pride, as wealth is godliness in his refined estimation; after all, why else would Operation : Blessing feature more return shipments of diamonds from than food shipments to impoverished Zaire?  His cozy relationship with bloodthirsty Mobutu Sese Seko clearly paid dividends.  All of this seems underscores a profoundly destructive paradigm in which we measure a person’s worth, exclusively, by her capacity to generate capital.  Whether the means by which she raises the capital is good for society is largely irrelevant, but if she fails to generate said capital, she’s discounted.  The industrial revolution heralded this cruel dogma; Noam Chomsky suggests that though feudalism and slavery were horrendous, brutal tyrannies, the intrinsic value of a person in each caste at least wasn’t taken for granted; the caste values were viciously low,  but the value wasn’t questioned.  Post-industrial revolution and with the abolition of slavery, industry leaders discovered more profit in shrinking compensation for workers below that of a living wage.  Though the natural knee-jerk response to such a statement is understandable, one must bear in mind the effects of our state capitalist system on the global population, not just those in our own country.  Also bear in mind this is in no way an endorsement of either of the aforementioned antiquated, monstrous frameworks, but it’s worth noting the shift in values and its origins, something we’ll discuss later in this series.

Enter Dean Baker, Economist

It turns out that laissez-faire market ideology and small government are, in fact, grand hoaxes, the former of which we’ve discussed in a little depth previously as we referenced American-flavor state capitalism.  Quite instructive on the latter topic is The Conservative Nanny State : How the Wealthy Use the Government to Stay Rich and Get Richer, written by Dean Baker, economist and co-founder of the Center for Economic Policy and Research.   Weighing in at just over one hundred pages, the book is a treasure trove of powerful evidence-based arguments targeted at refuting the myths surrounding what he calls the conservative nanny state, an apt and resonant depiction of big government in support of the overclass.

He discusses in awesome detail

  • the sly yet devastatingly powerful protectionism for upper-income earners such as doctors, lawyers, and technocrats accompanying the better-known globalization and immigration policies leading to downward wage pressure on lower-income earners,
  • the union-busting governmental muscles flexed to diminish collective bargaining in America,
  • the skyrocketing CEO pay in the United States stemming from the corporation, a legal fiction conferred enormous power by the government,
  • the government supplied monopolies on inventions and creative work through patents and copyrights,
  • the government punishment of debtors down on their luck accompanying happy-go-lucky freedom from debt corporations enjoy, both a product of a thing dubiously labeled “bankruptcy reform,”
  • the government crackdown on individual’s capacity to sue run-away corporations and the decidedly one-sided nature of the two-way street of eminent domain and government investment,
  • the government protections for small businesses which are actually quite harmful to the economy and the environment,
  • the government coddling of high-dollar tax evaders while systematically demonizing recipients of the safety net,

among many others.  In this series of posts, we’ll analyze his arguments, addressing additional points and more recent evidence.

The Spanish Pearl Part Five : Eisenhower and the Push-Pull of Intelligence

We’re spending a good deal of time in the pivotal space of Cuba’s revolution of 1959 and the early days of Castro with good reason : the shallow villainy of Castro in Americana has persisted for the many decades spanning his autocratic rule, and though we shouldn’t condone violence and immorality by anyone, let alone a dictator, it’s crucial to understanding the American role in said history, if one is to divine ethical policy decisions today with respect to Cuba, or any other foreign body.

Previously, we discussed the turmoil in Cuba generated by the corrupt Batista dictatorship and American dominance and negligent nonchalance in Cuban politics and economics.  Despite internal concerns about the red inclinations of Castro, members within the intelligence community, notably Alfred Cox, head of one of the paramilitary divisions of the State Department, suggested

A practical way to protect United
States interests in this matter would
be to make secret contact with Castro,
assure him of the United States sympathy
with some of his objectives, and
to offer him support. The individual
chosen to make the contact should be
of such background that[ ]it is clear
that he speaks with the authority of
the United States Government.
Obviously, the support must be given
covertly so as not to endanger United
States relations with Batista. The most
effective means of help to Castro would
be arms and ammunition. Air dropping of
this equipment might be dangerous from
the security aspect. Allowing a shipload
of equipment manned by a Cuban
crew to evade our Coast Guard would
probably be a better method. The most
secure means of help would be giving
the money to Castro, who could then
purchase his own arms. A combination
of arms and money would probably be
best[,]

according to official historical record of the Bay of Pigs invasion released in 1998 under the Freedom of Information Act.  That same document details how the Eisenhower administration attempted in December 1958 to curry favor among Cubans opposed to both Castro and Batista, hoping to appease the growing anti-Batista sentiment while curtailing pro-Castro forces.

These same documents indicate Washington monitored Cuba carefully, expecting Castro’s government to collapse quickly.   Four months after the January 1959 overthrow of Batista, Castro visited the United States to meet with press clubs, American citizens, and any willing government officials; intelligence experts expected the trip to differentiate success from failure for Castro, though some experts refused to admit a possible thawing of Castro’s anti-Americanism boosting his popularity in Latin America :

[i]t would be unwise to assume from the
minor indications to date that Fidel has
undergone a serious change of heart as a
result of his visit to the United States.

Aside from the previously discussed misrepresentation by Nixon and snub by Eisenhower, Castro’s visit was a public relations success.  Castro returned to turmoil at home, his anti-communist statements in America (requested by Nixon) fomenting difficulties as communist and anti-communist members of the Cuban government vied for prominence.  Castro’s government instituted early reforms, included

  • mass school construction,
  • laws empowering women and providing greater equality for African Cubans,
  • land reforms providing allotments and coops for poorer Cubans,
  • programs to improve literacy and education availability,

among others.  Far from a perfect picture, Castro organized the Committees for the Defense of the Revolution (CDRs), agencies of local informants aimed at isolating “counter-revolutionaries,” apparently including homosexuals.

Eisenhower’s administration remained involved in Castro’s government, dispatching diplomats and carefully weighing options, as the internal documents mentioned above demonstrate.  Some elements, notably in a Related Mission Directive (RMD) dated December 1959, admonished temperance, suggesting

[f]or the moment, CIA operations should
be carried out on the assumption that the
revolutionary government is basically non-Communist,
with legitimate reform goals
that deserve US respect and support. Covert
operations should support overt efforts
to arrive at a rapprochement with the present
government and to eliminate the conditions
described above without resorting
to forceful means.

Further, the aforementioned report writes,

[a]s 1959 drew to a close, a final Special National
Intelligence Estimate, "The Situation in the Caribbean
through 1960," indicated that Castro was in to stay,
despite internal difficulties. The SNIE saw no serious
threat to Castro's continued rule, and it pointed out
that if there was direct US intervention, "Most Cubans
including the military, would react violently [emphasis mine]."

Along similar lines, General C.P. Cabell, among others, maintained Castro’s non-communist position, though he conceded that communists could overcome Castro with some effort.

Another program underway in Eisenhower’s administration was overthrow : J.C. King, chief of the western hemisphere (WH) division of the CIA, wrote in a December 11, 1959 memorandum :

[t]he overthrow of Castro within
one year, and his replacement by a junta friendly to
the United States which will call for elections 6
months after assumption of office,

an obvious reversal of course.  Determining where Washington’s passivity ended and sudden hysteria began naively can be a challenge, as public statements of the day spoke of communist containment and democratic empowerment.  Perhaps instructive is a diplomatic missive to Washington from Havana dated May 26, 1959 in which American officials bared the ugly truth :

These demonstrations obviously welcome,
but possibly most significant aspect is
demonstration once again, enormous power
Castro, who with few words made anti-Communism
popular position. By same
token he could reverse trend at any time,
and skeptics speculating that current
stand is sop intended to make it more
difficult for u.s. interests to protest
effectively against stringent agrarian
reform law [emphasis mine].

That is to say, Castro very well could intend genuine reform, not be a communist, and represent a boon for Cubans, but his charisma and capacity to shift public opinion represented a perhaps intolerable threat to American foreign policy : the unabated, free access to plunder resources at the expense of those living there.

King continues with a strategy of propaganda no doubt capable of winning even Nazi strategists over :

1. Clandestine radio attacks on Cuba,
from liberal Caribbean countries.
2. Intrusion operations against Castro's
TV and radio, to be mounted from within Cuba.
3. Formation of pro-US opposition groups
to establish by force a controlled area
within Cuba.

Finally, he suggests outright assassination, tempered by a hand-written edit by CIA director Allen Dulles :

Thorough consideration be given to the
elimination [removal from Cuba] of Fidel Castro. None of those
close to Fidel, such as his brother Raul
or his companion Che Guevarra [sic] \ have
the same mesmeric appeal to the masses.
Many informed people believe that the
disappearance of Fidel would greatly accelerate
the fall of the present government.

Most noteworthy in all of this is a clear lack of desire to work with a popular figure capable of smoothing relations : why not give peace a chance?  Batista was despised by his own people, and so unpopular globally that John F. Kennedy pegged Eisenhower’s support of him as complicity in war crimes during his 1960 bid for the presidency against Vice President Nixon :

Fulgencio Batista murdered 20,000 Cubans in seven years...
and he turned Democratic Cuba into a complete police
state—destroying every individual liberty. Yet our aid to
his regime, and the ineptness of our policies, enabled
Batista to invoke the name of the United States in support
of his reign of terror. Administration spokesmen publicly
praised Batista—hailed him as a staunch ally and a good
friend—at a time when Batista was murdering thousands,
destroying the last vestiges of freedom, and stealing
hundreds of millions of dollars from the Cuban people,
and we failed to press for free elections.

Even suggesting a “working with” exposes the faulty framework from which we often discuss foreign policy : why should Cubans work with us to support mostly American companies?  What threat did Castro really represent in 1959? Even if one is imbecilic enough to believe Soviets represented a threat here, by our own intelligence, there was no connection.  Yet within a year, Eisenhower’s intelligence wonks were steeling for a fight.  The rub is simple : Castro represented defiance demonstrated in various other Latin American countries against American business interests, just as the memo described above suggests.  We’ll examine Kennedy’s take next time.

 

The Spanish Pearl Part Four : Batista, Castro, Eisenhower, and the Laying off of Cuba

We concluded previously with a discussion of mounting economic tensions in Cuba as American protectionism further imperiled an already gluttonous over-production of cane sugar, damaging demand and thus widening the income gap among Cubans.   A fascinating position paper by Jose Alvarez, professor at the department of food and resource economics, describes in greater detail the intricate economic intertwining between Cuba and the United States during the nearly six decades of “tender patriarchal democracy.”  Mostly uniform is the American dominance in the sugar production in Cuba and the restriction to that single export, with a few exceptions of seasonal fruits and vegetables.  The larger theme is that of the following, one any of us working in corporate America can easily understand : imagine forcible restriction by management to a particular subset of your skills, and imagine further that management eventually deems said subset obsolete.  What happens to you?  Generalizing the analogy to a country requires painful recognition of grave immorality and craven avarice : Blue Marble Citizen records Cuba’s population as ranging from five to seven million over the 1950s.  Alvarez’s paper describes a rural landscape containing thousands of farms and a distribution of land types, though as one would expect cane sugar dominated in era of American patriarchy, characterized uniquely by majority consumption of Cuba’s sugar by America and majority imports into Cuba coming from America.

It’s worth understanding this relationship as clearly as possible : imagine if your survival depends crucially on the whim of exactly one mostly irreplaceable person who easily can and does stymie any peaceful or gradual motions toward your own autonomy, and that master/slave relationship persists over decades.  Suppose further that the master, whether for legitimate reasons or not, no longer has any use for you, but in your present form you cannot survive without his relinquishment of domination.  What happens next?  Common sense dictates a process.

Fulgencio Batista protested to President Dwight Eisenhower that a further curtailing of American sugar imports could decimate the Cuban economy, as described in research by Ann Marie Holmes.  According to Robert Freeman Smith in The United States and Cuba: Business and Diplomacy, 1917-1960, the Cooley Bill mentioned earlier and other protectionist policies by 1959 reduced America’s imports of sugar to fifty percent of Cuba’s exports, down from ninety-six percent just three years earlier.  Compounding the problem was the economic outcome of imperialism, nicely summarized by analyst Natasha Geiling of Smithsonian Magazine:

U.S. financial interests included 90 percent of Cuban mines,
80 percent of its public utilities, 50 percent of its railways,
40 percent of its sugar production and
25 percent of its bank deposits—some $1 billion in total[.]

Essentially, Batista’s failure in persuading Washington to lighten the trade restrictions and furnish agriculturists to cultivate a crop diversification program, together with his overwhelming corruption and embedding with organized crime (documented in T.J. English’s How the Mob Owned Cuba — and Then Lost It to the Revolution reviewed in the Washington Post) crippled his support among most Cubans, as they stood nothing to gain from American imperialism and a criminal dictatorship defined by avaricious excesses, nicely symbolized by a golden telephone.

Meanwhile the Castro brothers had regrouped in Mexico with revolutionary Ernesto (Che) Guevara, in exile after the CIA-backed coup in 1954 which overthrew Jacobo Arbenz Guzman, the democratically-elected president of Guatemala.  Arbenz’s only crime was to nationalize farmlands and plantations, infuriating the United Fruit Company, an American corporation unwilling to tolerate Guatemalans taking back their own land and crops.  Not too coincidentally, John Foster Dulles and his brother Allen were the United States Secretary of State and the head of the CIA, respectively, and they happened to be well-compensated board members for United Fruit.  We could investigate that corporation’s highly controversial history in greater detail, though we can leave that to the reader; instructive is Big Fruit, reviewed in the New York Times.

The three enlarged the 26th of July movement into a force capable of overthrowing Batista.  Eisenhower, reportedly obsessive over the spread of Soviet communism, feared that Batista’s ouster, almost a certainty as his popularity in Cuba crumbled, would render the island somehow open to Soviet domination, despite little to no evidence.  Castro initially portrayed himself as no friend to communism, as the Hoy, the official newspaper of the Cuban communist party, described his earlier attack on the Moncada Barracks as

a putschist attempt, a desperate form of
adventurism, typical of petty bourgeois circles lacking in principle
and implicated in gangsterism[.]

Nonetheless the Eisenhower administration feverishly sought a suitable replacement for Batista, despite his willingness to renege on his earlier flirtation with communism, discussed in Julia E. Sweig’s Inside the Cuban Revolution, to gain favor from Washington; Castro was not a viable alternative from the perspective of agency heads, as Eisenhower recalls in his memoirs that Allen Dulles believed communists had already infiltrated the 26th of July movement as early as 1958, despite communist disdain for Castro described above.  Unhelpful in teasing out the history is that Richard Nixon, then Vice President to Eisenhower, later lied persistently about circulating an internal memorandum condemnatory of Castro, likely in chest-thumping anti-soviet fury, to which we’ll return.

Castro led a successful overthrow of Batista on New Years’ Day 1959, the day after Batista fled to the Dominican Republic.  For a brief time, Washington was somewhat ambivalent about Castro’s new government, described in Luxenberg’s analysis.  Castro installed a temporary president, Manuel Urrutia Lleó, and in a goodwill meeting with the American Society of Newspaper Editors in the United States, Castro said in April 1959 :

I know the world thinks of us, we are Communists, and of course
I have said very clear that we are not Communists; very clear.

Nixon hosted Castro for a three hour meeting after Eisenhower apparently snubbed him to play golf.  The memorandum detailing the meeting, described by Alex Luxenberg in an investigation of Eisenhower’s possible contributions to Castro’s eventual pact with Moscow, was actually rather sympathetic :

[m]y own appraisal of him as a man is quite mixed. The one
fact we can be sure of is that he has those indefinable qualities
which make him a leader of men. Whatever we may think of
him he is going to be a great factor in the development of
Cuba and very possibly in Latin American affairs generally.
He seems to be sincere; he is either incredibly naive about
Communism or under Communist discipline - my guess is
the former.... But because he has the power to lead...we have
no choice but at least to try to orient him in the right
direction[.]

Castro returned to Cuba with plans of agrarian reform aimed for moving the economy away from near exclusive sugar production (a population can’t survive on just sugar).  Expropriating farmlands obviously would require U.S. corporations to relinquish sugar plantations : American business leaders protested to Washington, heralding another refrain of a tired tragedy of American hegemony in Latin America briefly mentioned above.  Specifically, despite virtually zero evidence of Soviet influence in the 1959 coup, Washington once again cried “communism,” the public relations bogeyman served to justify crushing the genuine threat Castro represented : nationalism and independence in satellite states.  This “threat”, evidenced in Castro’s staunch anti-Americanism, along with Eisenhower’s tepid response to Castro’s outreach, chilled relations in 1959.  Anti-communist and communist forces in the July 26 movement sparred, compelling Urrutia to resign; Castro, seeking unity, more warmly received communists in his midst.

In the remaining parts of this series, we’ll discuss Castro’s alliance with Moscow and the near unremitting hostility to follow, but first a few words on Luxenberg’s analysis.   He argues ultimately that Eisenhower bears minimal responsibility for Cuba’s enmeshment with the Soviets, suggesting Castro pursued this relationship himself for his own reasons, perhaps in galvanizing his power; his thinking is that Latin America suffers some neglect in U.S. foreign policy, tacitly suggesting that a firmer hand in Cuba was justified, resigned to the obvious ineffectiveness of sanctions, something we’ll discuss more in depth later.  Still, Luxenberg writes,

[n]evertheless, it is not enough to
suggest that just because an individual is not a member of the
Communist Party that such a person cannot be an enemy of the United
States. If Castro's ties to the Communists are a matter of debate,
those of the Ayatollah Khomeini are not. Yet no one would question
the virulent anti-Americanism of the latter[,]

and he quotes Allen Dulles as having written,

thousands of the ablest Cubans, including leaders,
businessmen and the military, who worked hard to put Castro in
and were risking their lives and futures to do so, did not suspect
that they were installing a Communist regime[,]

taken together to indicate an amnestic conclusion that Castro pursued Soviet relations and communism perhaps out of mere anti-Americanism and cartoonish villainy, again overlooking the substantial role even a little American effort in reversing the damage six decades of economic and political imperialism could have played in better relations, to say nothing of the indiscussible topics of economic, political, and democratic empowerment of Cuba for Cubans.

The Spanish Pearl Part Three : Sugary Sweet Good Neighbor Policy But Hardly ‘Golden Years’

Continuing with our discussion of Cuba, American dominance throughout the island was palpable through the 1920s.  Nonetheless, trade deficits and the stock market crash of 1929 left the United States grasping for protectionism in the Smoot-Hawley Tariff Act, ending economic reciprocity as America’s business elites struggled to tread water amidst a wrecked, failed pseudo-laissez faire economic policy.   The Cuban military leaders, along with Sumner Welles, American diplomat dispatched to Havana to negotiate a settlement, ultimately convinced Machado to resign and flee.  Within days, a militant student group, led by Fulgencio Batista, a son of a laborer and an army official, overthrew Carlos Manuel de Céspedes y Quesada, Welles’ official replacement for Machado, placing in power a university professor by the name of Ramón Grau San Martín.  San Martín publicly opposed the Platt amendment and supported reforms enacted during sporadic rule in the early 1930s.  Though Welles in certain respects attempted outreach to both San Martín and Batista, Washington’s reluctance to recognize San Martín because of the risks of reforms (a common dilemma America faces when choosing between human rights and market control), pressure to protect American property and interests, Batista’s commitment to resisting communism, and a power struggle with Batista led Welles’ replacement, Jefferson Caffery, to side with Batista.  San Martín resigned, replaced by more militant elements in the government sympathetic to Batista.

In 1934, President Franklin Roosevelt and Cuba formally dissolved said amendment in the Treaty of Relations as part of the Good Neighbor Policy, an ideological and diplomatic campaign aimed at unifying the western hemisphere and diminishing violent American hegemony.  Prominent in the policy were public relations designed to acquaint Americans with a flavor of Latin life through the Office of the Coordinator of Inter-American Affairs (OCIAA).  The U.S. vowed not to interfere with Cuba’s sovereignty nor favor any political force, though the letter and the spirit differ, as is generally the case.  Nonetheless, the Good Neighbor Policy was successful partly in softening relations in the western hemisphere; course reversal coincided with the conclusion of the second world war.

Batista became president of Cuba in 1936, and though he supported some worker reforms and extended outreach to communists, American leaders generally considered him reliable.  Under the Lend-Lease Act of 1941, the U.S. provided arms to Cuba in exchange for military alliance in anticipation of joining the war in Europe and opened training grounds in Cuba.

Relations with the U.S. became increasingly difficult during San Martín’s resurgence in the late 1940s and early 1950s; as early as December 1945, San Martín was negotiating with America to relinquish control Cuba’s military bases, according to the American diplomatic papers.  Though the U.S. returned a few bases and airfields to Cuba, it continued a military presence in the island with ships, manpower, and other equipment, to say nothing of the base Guantanamo Bay.  Colonel Camilo Gonzalez Chavez of the Cuban Air Corps proposed to American officials for the U.S. to open airspace to Cuban training exercises and ease travel requirements for Cuban soldiers, according to Ann Katie Holmes.   That is, Cuba naturally assumed that mutual trust between the two nations should permit Cuban military games over Kansas corn fields if the U.S. Air Force could play in Cuba airspace; it turns out that American friendship is often one-sided.

American leadership certainly noticed that our economic intervention in Cuba concentrated wealth among the American investors and their upper-crust Cuban surrogates while sandbagging cost-of-living increases essential to supporting the population at large.  With the beginning of the Cold War, American propaganda found a new, post-war enemy in Stalinism, and though Cuba’s proximity to the United States seemed an insurmountable obstacle to Soviet influence in the hemisphere, Cuban workers parties and human rights movements were receptive to anti-Americanism.  From their perspective, the U.S. continued to occupy, ferret away resources, and control the Cuban sugar economy through many means, including restriction of diversification.  That is to say, if Cuba’s crop output is highly diversified, the country can better negotiate with buyers internationally.  Constraining crop output to just a handful of varieties ensures better deals for the buyers, principally the United States.  It’s easier to imagine that if a store sells only lightbulbs, it likely can’t get your attention if you’re buying dish rags that day.  Further, many alive remembered the Platt amendment, American support of Machado, and American failure to recognize the San Martín government.  Moreover, Cuba had a communist party since at least the 1920s, with an ideology increasingly attractive to Cuban peasants either underpaid or superfluous in the hemisphere’s economy.

Carlos Prío Socarrás became president of Cuba in 1948; a friend to American interests, he soon proffered a new treaty promoting American businesses in exchange for technology sharing.  Cuban resistance, as mentioned earlier, stymied his first iteration, compelling him to reduce scope to sugar and currency stability.  Prío, like San Martín before him, joined the effete as Cuban opinion diminished around their inability to reduce violence or corruption, setting the stage for a coup.  Nonetheless, though these were hardly “golden years,” to conjure historian Charles Ameringer,  the years marked by their leadership were an improvement over two decades preceding enactment of FDR’s Good Neighbor Policy, to say nothing of the days of Spanish imperialism.

In 1952, Batista seized power in an American-backed coup supported by wealthy Cubans after a seemingly unsuccessful run for president.  Resistance movements appeared here and there, one lead by Prío, another by a nationalist by the name of Fidel Castro.  Prío operated a resistance inside the U.S. while Castro plotted to overthrow Batista from within.  A failed coup in 1953 at Moncada Barracks left several rebels dead with Castro and his brother Raul imprisoned.

In 1955, Chairman Harold Cooley of the Agricultural Committee in the House of Representatives presented his eponymous protectionist bill tightening the noose around Cuba’s economic throat : if passed, it would guarantee that once annual imports of sugar reached 8.3 million tons, Cuba could supply no more than 25.6% of it.  That is, despite American restrictions against crop diversification in Cuba as discussed above, Congressional leadership intended to protect American domestic sugar mills at the heavy expense to Cuban mills.  The sugar market was already grappling with excess supply, so Batista expressed deep concern to President Eisenhower about America’s seeming willingness to betray decades of economic interdependence.

Meanwhile, Castro and his brother received pardons, and fleeing to Mexico, sought to establish a 26th of July movement, named for the day of their attempted coup.  The years leading to their success will be the topic of discussion in a following article.

Why the Democrats Keep Losing

Donald Trump is arguably the most disliked president in the history of modern polling, according to Five-Thirty-Eight.  Haphazard, mean-spirited (even by Trump’s own admission) healthcare proposals, blatantly racist travel bans, and the growing Russia scandal leave Trump in a very weak bargaining position with respect to Congress.  Or perhaps the intention is to distract with whatever vulgar offering Trump and Bannon provide on Twitter away from the Paul Ryan/Mitch McConnell plot to eviscerate social programs and keep the rich rolling in the fat, as suggested by Noam Chomsky in an interview with Truthout.  Whatever the Republican strategy (or lack thereof), Trump’s extreme unpopularity has heralded close calls for Democrats in a few of the four special elections held this year which would otherwise be very strongly Republican.  Yet their strategy is broken.

Jon Ossoff very slightly lost a heavily Republican district very close to where I lived some years ago, and his defeat has predictably emboldened the hopelessly flat Trump to proclaim a landside 100%+ mandate for himself and his stupefying agenda.  More appropriately, the closeness of the race in Kansas, to which we’ll return shortly, demonstrates profound dissatisfaction with Trump, something no doubt imperceptible to the mad king in his choking fog of self-congratulatory reverie.  Georgia’s is the fourth special election in the months since Trump has become president, and this is the only one the Democratic National Committee cared to notice.  Vox noted rather cleverly that Ossoff’s loss occurred because of a lack of substantive policies, permitting sleazy, establishment career politician Karen Handel to smear him on where he lives, who’s funding him (mostly small-time donors through Act Blue), and the like, despite his being raised in the district and her not and her receiving heavy donations from the corporate Republican machine.  The issue becomes, rather strikingly, the simple fact that Ossoff, like Obama in 2008, ran only on the “I’m not Trump/Bush and never will be,” rather than actually offering strong policy.   One can visit Obama’s 2008 campaign website to find rather scant policy content, mostly platitudes about changing politics and rhetoric.  Obama, unlike Ossoff, won because of the previous increasingly frustrating years with warmongering liar Bush in charge, and that McCain, a fresh(ish) departure from Bush, was probably unelectable with Sarah Palin on the ticket.  Of course, if Obama had run for the House against McCain and Palin, or McCain and a gorilla for that matter, in Georgia’s sixth district in 2008, he would have walked away with a striking defeat.

The other, and perhaps most significant issue in many urban/suburban districts is a systematic, widespread campaign of voter suppression, long documented by investigative journalist Greg Palast of Democracy Now and of course in outstanding work by Ari Berman in Give Us the Ballot.  These two analysts unearth mountains of evidence of persistent voter suppression in the United States against minorities, quite remarkable in the 2000 and 2004 presidential elections in that they very likely cost the Democratic candidates Al Gore and John Kerry, respectively, the electoral college.  Forms the suppression take are

  • extreme gerrymandering to weaken or dilute minority districts, such as a drawing ruled unconstitutional in North Carolina in May and likely unconstitutional in Wisconsin soon (interestingly the defense before the court was “partisan advantage”, a euphemism for racial discrimination, much like the role the term “states’ rights” has served with respect to various forms of local tyranny),
  • purging voter rolls because of fuzzy matching of voter names with those of convicted felons,
  • deceptive polling location announcements,
  • dilapidated voting machinery,
  • insufficient staffing, paper ballots, or machines,
  • early polling place closures,
  • legal yet highly unethical barriers to voter registration (see Kasdan below),
  • persecution of volunteer registrars, a widespread form of suppression documented by Diana Kasdan of the Brennan Center for Justice (an instructive read, as it turns out many state and local governments prefer for voting drives not to happen),

and so on.  Earlier, more hostile tactics included barring entry of African Americans to polling places at gun point, unbelievably difficult literacy tests, violence, murder, intimidation, and the list goes on and on.

Returning to strategy, the fundamental issue is that the DNC seems to think the pretty people with Hollywood money and empty platitudes will persuade heartlanders and southerners to pull the lever for a tepid return to establishment politics.  Despite Trump’s shriveling popularity, it seems unlikely that they’ll abandon him for an outsider with a shallow platform.  And though the Citizens United decision makes the Republican attack ads about outside money all the more absurd and hypocritical (after all they happily gobble up contributions from outside corporations and tycoons, as Think Progress has pointed out), public relations experts in the Republican camp certainly know how to twist that knife by portraying Ossoff as a “San Francisco candidate.”  The DNC’s push to moderate Ossoff’s position essentially tied his hands with respect to combating the unremitting propaganda machine, as he’s left largely silent on policy while being forced to defend its outlandish accusations.

The DNC had an excellent opportunity in filling the seat left by CIA director Mike Pompeo in Kansas : James Thompson lost to Ron Estes by four points in a district Trump carried by 27 points, despite virtually no underwriting from the DNC but a strong, populist anti-establishment message.  If there was an opportunity to be had, this was it.  Kansas folk likely felt at home with Thompson, a local civil rights attorney with deep community ties.  Ossoff’s defeat, by contrast, was by a larger percentage margin than Hillary Clinton’s in that same district.

The DNC continues to favor centrist, establishment figures, neither of which Trump’s working class base wants.  Bernie’s ascendancy and Trump’s slight electoral victory last year indicated a strong preference among younger and working class people from both parties for an attempt from outside the Beltway.

Though Trump is extremely unpopular, bland establishment shills won’t tempt moderate Republicans, even if they dislike Trump.  Though Trump may compulsively pat himself on the back for the victories, they’re actually quite revealing of his unpopularity, as Republicans have atypically only slightly held their seats with a new Republican president in office; Democratic leadership has yet to discover how to leverage it.  True upstarts who challenge politics as usual with authentic advocacy for constituency is much more likely to convince people to abandon party and energize activists; as usual, they begin locally.

We’ll return to Cuba next time.

The Spanish Pearl Part Two : Americana and Independence

Continuing our discussion of Cuba, American influence was observable as early as 1805 when President Thomas Jefferson dispatched emissaries to for negotiation.  Secretary of State (later President) John Quincy Adams articulated in 1823 the ripe-fruit theory, namely

[t]here are laws of political as well as physical
gravitation; and if an apple severed by its native
tree cannot choose but fall to the ground, Cuba,
forcibly disjoined from its own unnatural connection
with Spain, and incapable of self-support, can
gravitate only towards the North American Union
which by the same law of nature, cannot cast her
off its bosom...

In other words, if Cuba’s masters manage to lose her, it rightfully belongs to America, a philosophical musing on the Monroe Doctrine, President James Monroe’s foreign policy admonition that Europe ought to leave the western hemisphere be, or “America to the Americans”.  A ripe plum to be sure, Cuba’s sugar exports were legendary, eighty-two percent of which landed in the United States until the 1880s.  The industrial revolution, underwritten largely by tacit slaves conscripted after the North South Compact of 1877, and general improvements in farming and manufacturing produced a substantial goods surplus in the United States as the nineteenth century approached conclusion.  Kansas Congressman Jerry Simpson informed his peers in 1892 that the excess of crops compelled agribusiness  “of necessity [to] seek a foreign market,” according to William Appleman Williams in The Roots of the Modern American Empire.  Williams’ key thesis is that U.S. hegemony of the late nineteenth and early twentieth centuries mostly followed an increasing need for importers of American goods.  Over the decades leading to Cuba’s independence, it increasingly became reliant on America for basic goods, and American capital flowed reasonably freely.  President Grover Cleveland assessed the economical intertwining in 1896, writing

[i]t is reasonably estimated that at least
from $30,000,000 to $50,000,000 of American
capital are invested in the plantations and
in railroad, mining, and other business
enterprises on the island. The volume of
trade between the United States and Cuba,
which in 1889 amounted to about $64,000,000,
rose in 1893 to about $103,000,000.

Beginning in 1868, Cuba liberation movements organized the first of three wars for independence from Spain : the Ten Years’ War leading to abolition of slavery throughout Cuba.  The last war, lasting from 1894 to 1898, kicked Spain more or less out of the hemisphere for good.  In The Tragedy of American DiplomacyWilliams argues that a tripolar American constituency coalesced during Cuba’s final push for independence, neatly placing Vice President Theodore Roosevelt among those advocating intervention, William Jennings Bryant arguing for non-interference, and a business lobby favoring an “open door” rather than any form of colonialism.

As the push for independence ground on, William McKinley succeeded Cleveland as president, and concerns abounded as to the fate of a “free” Cuba.  A young analyst-turn-statesman, child of an American woman and British father, wrote

[a] grave danger represents itself. Two-fifths
of the insurgents in the field are negroes.
These men . . . would, in the event of success,
demand a predominant share in the government
of the country . . . the result being, after
years of fighting, another black republic.

The other black republic, to which this young man referred, was Haiti, wherein blacks overthrew their French masters in 1791, much to the chagrin of European proto-fascists.  This young statesman’s career would feature ups-and-downs, cresting during the second world war, crashing soon after when he, Prime Minister Winston Churchill, remarked with displeasure that he would not preside over the “liquidation of the British empire.”

With the destruction of the U.S.S. Maine in Havana’s harbor in February 1898, McKinley, by many accounts, reluctantly eased toward intervention.  By April, he asked Congress for a formal declaration of war, beginning the Spanish American War; a senator from Colorado, Henry M. Teller, proposed an amendment protecting Cuba from American annexation once Spain relinquished Cuba to its peoples.  In 1901, Senator Orville Platt from Connecticut proposed a replacement permitting the United States to intervene as needed to protect Cuba.  The Platt amendment articulated the limits of Cuba’s independence, namely, perhaps, oddly, to protect its independence; the actual text is rather instructive, as it more or less permits unilateral intervention by the United States to protect Cuba.

American unions were virtually all opposed to intervention.  A prevailing sentiment among tradesmen and semi-skilled laborers appeared in “A Peace Appeal to Labor”, published by Bolton Hall, treasurer of the American Longshoremen’s Union, reprinted in Zinn’s A People’s History :

[i]f there is a war, you will furnish the corpses and
the taxes, and others will get the glory. Speculators
will make money out of it -- that is, out of you. Men
will get high prices for inferior supplies, leaky boats,
for shoddy clothes and pasteboard shoes, and you will
have to pay the bill, and the only satisfaction you
will get is the privilege of hating your Spanish
fellow-workmen, who are really your brothers and
who have had as little to do with the wrongs of
Cuba as you have.

Soon after war was declared, trade union dissidence all but vanished, as machinists and coal miners alike recognized the boon to industry that a war machine can be.

As Spain retreated, American dignitaries helped Cuban resistance leaders craft a constitution, requiring that the new constitution include Platt’s requisite subservience to American dominance.  Cubans rallied in opposition, as did anti-imperialist groups in the United States, recognizing that Platt gutted Teller in ensuring a tacit master/slave relationship.  General Leonard Wood of the American occupation assured President Theodore Roosevelt that

[t]he people of Cuba lend themselves readily to all
sorts of demonstrations and parades, and little
significance should be attached to them.

That is, Cubans just prefer to party, and ascribing serious American values of self-determination and independence to them is a mistake.  These partying Cubans proved to be a nuisance, resisting for months before finally succumbing to increasing American pressure to formalize their subservience.

The Platt amendment, aimed primarily at stabilizing Cuba while promoting American protectionism, largely failed in fostering a healthy, self-governing society, despite possessing tremendous trade and development capacity.  In fact, one can examine case-by-case, examining regions within the Monroe sphere to find nations resplendent with resources but in the throes of deep inequality and often tyranny, generally at the urging of America.  Wood himself confessed to Roosevelt that

[t]here is, of course, little or no independence
left Cuba under the Platt Amendment.

A feature of the American occupation, justified by Section VII of Platt, is the recently quite relevant Guantanamo Naval Base, held by the U.S. since 1898; we’ll return to this topic later.

As the occupation continued, Cuban trade with the United States skyrocketed, and American businesses busily gobbled up farmland and resource consignments, resulting in a 536% increase in American investment in years between 1913 and 1928, according to researcher Ann Marie Holmes.  During these years, pro-American leadership prevailed in Cuba, notably with the election of Gerardo Machado in 1925.  Though largely responsive to American influence, Machado pressed Cuban constitutional constraints on his term limit and curried favor with local and American businesses to remain in power; Cuban nationalists approved of his hard stance on gradual protest toward Platt, and American statists were generally pleased with his complicity.  Difficulties arose with the stock market crash in the United States in 1929, a more thorough discussion of which we’ll continue later.

 

The Spanish Pearl Part One: Trump’s Gambit

Donald Trump, with modest pomp and circumstance from American media, honored a campaign promise this week in reversing the Obama administration’s 2014 decision to begin normalization of relations with Cuba, surrounded by a militant cadre of Republicans hankering to hurtle us back to the good old days of the Cuban missile crisis.  From a New York Times/CBS News poll conducted last year, we have that a majority of Americans support lifting the decades-long embargo imposed on Cuba, yet Secretary of State Rex Tillerson offered the tough guy stance on continued human rights abuses within the island nation.  Aside from the official response from Cuba reported by CNN  detailing the myriad human rights abuses within the U.S. going on right now,  one need not look far for the craven double standard present not just in Trump’s bungled, clumsily heavy-handed foreign policy, but in American foreign policy generally traversing the (narrow) political spectrum of post-war administrations.   For example, despite myriad internal abuses documented over the years by Human Rights Watch, perpetration of massacres in Yemen, generation of radicalized ISIS militants as documented by Patrick Coburn of the Independent, the murderous tyranny Saudi Arabia’s monarchy enjoys broad American dispensation; Trump gleefully boasts, disingenuously according to the Brookings Institute, of multi-hundred billion dollar Saudi arms deals after a visit featuring a sword dance and a strange glowing orb.  Cuba, by stark contrast, somehow continues to draw the ire of extremists both inside and out of the American political aristocracy.  Though we may face temptation to hypothesize that

none of Trump’s foreign policy, though perhaps unusually egocentric and idiotic, is particularly shocking when placed in proper historical context.  When George W. Bush delivered his first state of the union address in 2002, he thumbed his nose at Iraq, Iran, and North Korea, declaring them to be an “axis of evil,” reversing the meager efforts by his predecessor Bill Clinton in thawing relations with Pyongyang in the so-called Agreed Framework.  Bush, like Trump to follow and Reagan to precede, seemed to have only a very slight understanding of geopolitics or the incredibly dangerous, malevolent game of poking-the-bear that is harsh sanctions and embargoes.  Indeed, this unique combination of ignorance and possible malevolence is worth examining, notable resource being Neil Buchanan’s recent discussion in Newsweek.  But returning to Cuba, fully appreciating the gravity of Trump’s intention to frustrate normalization requires investigating the deeply intertwined history with the rest of Latin America, the United States, the Soviet Union, and indeed the European imperialists who conquered it 500 years past.  Over the next handful of articles, I’ll detail the post-colonial history of what was once called the “Pearl” of the Spanish Empire in the hopes that of sharing the moral and ethical legacy demanded of us as citizens responsible for our government’s deeds.

In 1492, Italian explorer Christopher Columbus, on behalf of the Spanish monarchy, landed in Hispaniola and Cuba searching for a shorter trade route with the East Indies; upon arrival, he immediately set to the task of conquering and later exterminating the Taíno, the native peoples, installing a colonial government to oversee crop cultivation, resource extraction and, a very, very distant priority, Christianization of the fast-dying peoples.  An aside, one can find an instructive first-hand account of Columbus and his initial expedition in Howard Zinn’s Voices of a People’s History of the United Stateswith thematically familiar vignettes of generous, open-minded natives offering succor and sustenance to their strange European visitors, only to be repaid with savagery, rape, pestilence, and butchery.

For over two centuries, Spanish dominance remained in play despite frequent attempts at usurpation by other European powers, but for a brief interlude in the eighteenth century during the Seven Years’ War in which the British claimed Havana, introducing tens of thousands of African slaves to the island.  Demographically, non-white Cubans constituted roughly forty percent of the population in 1775, cresting at fifty-eight percent in the first half of the nineteenth century.  Liberation movements stirred, partly due to the French revolution and independence of the thirteen British colonies to the north; contributing perhaps more resonantly was a slave uprising in Haiti in 1791, together with independence efforts by both whites, blacks, and so-called mulattos, or mixtures.  Under pressure to close the slave trade (Britain had outlawed slavery in its colonies in 1807), Spain weakly complied, spurring uprisings throughout the middle decades of the 1800s.  Of particular note, documented by Jose Canton Navarro in his History of Cuba, was the Conspiración de La Escaleraa vicious campaign to quell slave revolts with torture, murder, and exile owing its name to torture involving a ladder and a whip.

Instructive is the influence beginning in the nineteenth century of the independent thirteen colonies to the north on Cuba, to which we’ll return in subsequent articles.

Cap Contritely in Hand for the Environment

A few days ago, Donald Trump predictably announced his unilateral decision to toss aside the Paris accord, an agreement which in of itself probably fails to adequately address the existential threat of ecological catastrophe.  It’s worth remembering that the agreement is non-binding, essentially expecting each signatory to commit to, well, whatever to which that signatory commits.  It may sound like a tautology, and that’s precisely what it is.  After all, imagine if the strategic arms limitations talks (SALT) had simply been voluntary on the part of the old Soviet Union and the United States.  That is to say, perhaps both countries would come to the table to agree that each would reduce the number of nuclear-carrying ballistic missiles by x% and y%, respectively, and each could assign that number at their leisure.  It’s almost a prisoner’s dilemma, each side deciding later how to assign their number.  Trump’s simian, chest-thumping “I get to play at the big people’s table” nonsense is all bluster: he just as easily could have played nice, then cut the commitment to zero.  The Breitbart-Bannon crowd welcome Trump’s slash-and-burn America-first policy-making approach, no doubt euphoric at their bitter flavor of ignorance finally reaching institutional gravitas.  Trump, clearly unaware of consequences, revels in his promise-keeping capacities.  Too bad they don’t extend to truly defending the security of Americans by ignoring the Pentagon’s recognition that climate change is a threat,  to  say nothing of “draining the swamp”, as Trump and his cabinet have so many conflicts-of-interest that the rigor mortis of normalization is firmly in place.

More disconcerting is the relentless propaganda of the past thirty years with respect to the environment.  I can remember sitting in computer science courses listening to a naive professor expel the gassy strawman that environmentalists simply don’t want anyone to have a job, as though completely eradicating chances of decent survival of the human race can’t compete with the tacit assumption that full employment is an essential feature of a successful society, as we’ve discussed previously.  I’m reminded of Al Gore discussing imagery of a balancing scale with Earth on one plate and gold on the other, a slide from a presentation at a corporate consortium discussion on global warming.

When I was in elementary school, I recall the final chapter in my fifth grade science textbook explaining air and water pollution, acid rain, the ozone layer, and anthropogenic climate adjustments through introduction of wildlife to untouched ecosystems, industrialization, habitat destruction, and the like.  I specifically remember my fifth grade teacher, Carolyn Hassell, remarking that she felt the textbook ends splendidly in suggesting that we, the youth of today but adults of tomorrow, have the power to save the environment and our future.  That was spring of 1991, twenty-six years ago, in a rural, quite conservative town in Texas.  Certainly no one could accuse any of my elementary school teachers of being particularly liberal, yet none could imagine any other conclusion than human beings influence the environment in quite potent ways, and that wisdom and judiciousness are requisite in deciding policy.  A striking irony is that the Republican party, an organization dedicated to opposing environmentalism in virtually all of its policy manifestations, bears the moniker “conservative,” a label originating with Theodore Roosevelt and his passion for conservationism, noteworthy in his creation of the National Conservation Commission.

Recognition of industrial pollutants has certainly been in public consciousness more recently.  Since the dawn of the industrial era, mass production and increasingly large factories have released more and more toxins into the air, water, and soil.  Corporations, concerning purely with profit, are institutionally compelled to transfer the costs of waste to the environment, and ultimately, to the ecosystem; this phenomenon is something called an externality, in the parlance of economics.  That is, market systems consider mostly the first order effect of a transaction, ignoring higher order effects.   The example often discussed by analyst Noam Chomsky is perhaps you sell me a car for some fixed sum, and maybe we each get a good deal;  an externality, among many, is that the additional car may result in more traffic, pollution, and the like, yet the original transaction fails to reflect any of these additional factors.  In the more extreme case, industrialists need not consider dumping waste into local rivers, as they may not face any direct financial consequence for doing so.  Quite infamous is the burning Cuyahoga River in Cleveland, symbolic of the effects of runaway industrialization on nature; the Stokes brothers, one the mayor of Cleveland, the other a federal congressman, jointly lobbied for passage of the Clean Air Act signed into law by Richard Nixon in 1972.  The United Kingdom beat the United States by sixteen years: in 1952, rare weather conditions permitted a heavy concentration of sulfuric acid, emitted from coal-fired power plants, to coalesce in the atmosphere over London.  For four days in December, the smog refused to lift, killing at least 12,000 people and poisoning 100,000 more.  Four years later, Parliament enacted the first serious legislation aimed at curtailing emissions.  Recent work by Texas A&M uncovered more detail in the specific mechanisms, but certainly the causes remain fairly obvious.

Raising public awareness in 1962 was marine biologist Rachel Carson’s book Silent Spring in which she discusses the deleterious effects of pesticides on bird populations; it’s possible her volume influenced the founders of the Environmental Defense Fund, an organization which immediately took up the task of curtailing pesticide use after its founding in 1967.   The EDF’s influence in policy certainly reverberates throughout the early days of the popular environmental movement, including underwriting a study linking cancer in New Orleans to water contaminants which presaged the passage of the Safe Drinking Water Act of 1974 and lobbying to ban lead in gasoline beginning in 1985, a measure which predictably better protected children from the ghastly effects of exposure.  Interestingly enough, the risks to pregnant women and children were understood as early as 1966 when Lyndon Johnson’s surgeon general William Stewart testified to Congress:

Existing evidence suggests that certain
groups in the population may be particularly
susceptible to lead injury. Children and
pregnant women constitute two of the most
important of such groups. Some studies have
suggested an association between lead
exposure and the occurrence of mental
retardation among children.

Two decades and much public pressure finally wrested regulatory control from corporations, including Associated Octel, responsible for poisoning the population.  Much data was available earlier from studies in New Zealand on the toxicity of lead, yet American lobbyists stubbornly allowed gold to weigh more than earth, borrowing from the earlier imagery.

Tracing the history of the runaway greenhouse effect as we understand it today, we have that Swedish scientist Svante Arrhenius first proposed in 1896 that by-products of fossil fuel combustion could gradually warm the planet.  After some back and forth in the mid-twentieth century, scientists settled in 1988 on the proposition that atmospheric temperatures were higher than anytime since 1880, a warming trend due primarily to industrialization.  The mechanics of industrial release of carbon dioxide and oceanic resorption were by then largely understood, and the recognition that industrial activity was releasing more carbon dioxide than could be absorbed was beyond question.  A coalition of international scientists formed the Intergovernmental Panel on Climate Change (IPCC), an organization representing perhaps the largest peer-reviewed scientific cooperation in history.  More recent scientific studies, including reports in 2014 and 2016 by the Coastal Resources Commission in North Carolina Coastal dispense with the propagandized claptrap of fossil-fuel underwritten think tanks such as Koch Industries, arguing the scope and damage of rising sea levels is perhaps inevitable now at the current rate of warming.  North Carolina is perhaps most striking in its proactive stance toward climate change: in 2012, they simply outlawed it by denying local governments from enacting ordinances or legislation with respect to an earlier report.  So much for permitting local governments to make their own choices, a frequent conservative refrain with a host of betrayals, such as the instructing all state and local governments how to define how people can associate in the Defense of Marriage Act, denying local governments the right to protect vulnerable immigrants through Gestapo-like tactics by the Immigration Customs Enforcement, and the like.  One can’t help but ponder the tired argument that the Civil War was about states’ rights rather than slavery, despite the slave states happily supporting the Fugitive Slave Act of 1850, a preposterous piece of freedom-trampling legislation compelling citizens in free states to form militias to return runaway slaves.

Returning to the environment, denialism actually dates back to explorations by Exxon Mobile in 1979 into the implications of climate shifts due to fossil-fuel combustion, an understandable venture given policy could affect their bread-and-butter; in the following years, they vehemently funded a campaign of disinformation to postpone any meaningful action.  No strangers to controversy, their almost suicidal foot-dragging and propaganda campaigns permitted horrendous accidents such as the Exxon Valdes spill, a near impossibility with a more decentralized sustainable energy system.   Early governmental agreements, such as the Kyoto Protocol, would have required signatories to reduce emissions of greenhouse gases such as the aforementioned carbon dioxide, chloroflourocarbons (CFCs), aerosol chemicals known to damage the paper-thin shield of ozone gas absorbing some of the sun’s more harmful ultraviolet radiation, and a handful of other pollutants and toxins.   Not unexpectedly, George W. Bush pulled out of the agreement, citing economic needs of American business were more important than the environment; his advisers came to regret the unilateral cowboy decision, as it, like Trump’s blustering parallel move this past week, further galvanized the rest of the world in their perception that America is the selfish, bully child demanding more than its fair share.

Though one could read myriad books on the subject of human contributions to environmental destruction, I’m more interested here in discussing the persistent issue: mountains of evidence, virtual unanimity among scientists regarding these issues, together with palpable, very visible effects seem insufficient to overcome the static friction of apathy.  Though we can point to indoctrination and diminished sources of information in the past, online media has somewhat mitigated this problem in recent years, provided one knows where to look for peer-reviewed summaries.  A 2015 study by Yale University reports distributions of awareness and concern throughout the world about climate change, noting that 40% of people in the world have never heard about it, obviously mostly in third world nations, and that 48% of Americans aren’t worried despite having heard a good deal of evidence.  Certainly that pattern persists across the developed world : awareness perhaps weakly correlates with concern.  So one might ask, logically, how it is possible that seemingly rational people can deny the overwhelming scientific evidence?  Is it simply because they deny science?  Is it because they follow the lead of their favorite pundits and politicians?   I would tend to believe the problem is both institutional and sociological, the former being the more obvious antecedent, the latter based on fairly recent research, to which we’ll return.

Corporate disinformation is a major institutional factor : science discovers some mechanism through which environmental manipulation harms ecosystems, imperiling the food supplies and the quality of water and air, next industrial corporations mostly responsible for the devastation dispatch their public relations people to the airwaves and their lobbyists to Washington to “control the narrative,” or rather supplant or obfuscate truth.   One can literally go case after case to find the same pattern: if there’s an agency or cache of talking points aimed at undermining environmental concerns, typically the underwriting comes from none other than the corporations poised to lose the most if policy reflects said concerns, as we mentioned earlier.   One can note that as of June 6, 2017, Exxon itself buys ad space on Google if one searches for “Exxon climate change denial;” the page is an exercise in public relations spin mostly lambasting environmental groups dedicated to reducing consumption of fossil fuels in energy production, suggesting they and the media are somehow part of an outlandish conspiracy theory discussed by Paul Krugman in a recent op-ed in the New York Times.  Krugman’s arguments extend to more than just climate change, which we’ll discuss momentarily.   Greenpeace provides a fascinating timeline of Exxon’s early research in the 1960s and 1970s, initially with Elmer Robinson and R.C. Robbins presenting a report to the American Petroleum Institute about the dangers of excess carbon dioxide raising sea levels and re-architecting marine ecosystems, James Black of the research division circulating reports internally about the greenhouse effect, writing in 1978 that

[p]resent thinking holds that man has a time window of
five to ten years before the need for hard decisions
regarding changes in energy strategies might become critical,

and so on into the early 1980s.  In particular, meeting minutes released from a task force on climate change organized by Exxon, Mobil, Texaco, Shell, and others suggested agreement with the realities of greenhouse gas emission and climate change, along with concession of the responsibilities they would bear going forward.   Roger Cohen, a scientist at Exxon, wrote in an internal memo in 1983, later leaked,

[t]he consensus is that a doubling of atmospheric CO2 from
its pre-industrial revolution value would result in an average
global temperature rise of (3.0 ± 1.5)°C [equal to 5.4 ± 1.7°F]…
There is unanimous agreement in the scientific community that
a temperature increase of this magnitude would bring about
significant changes in the earth’s climate, including rainfall
distribution and alterations in the biosphere.

Cohen decided to reverse his position later, joining a denial think tank created by Exxon. Disinformation campaigns have emerged over time from various industrial leaders, the Koch leaders being a particular example.  In the academic field of climate science, near unanimity of the scope and risk of ecological catastrophe is easy to find, documented heavily by various non-partisan organizations such as Skeptical Science.   The majority of scientists in other fields and government scientific agencies also agree with the consensus, documented by NASA.  Astonishingly, as the consensus has solidified and global temperatures have risen steadily by easily understood anthropomorphic mechanisms, the Republican party’s official position has shifted increasingly in the direction of mind-numbingly stupid denialism.  Vox offered an intriguing look at the evolution of the Republican position on environmentalism in an April 22 article, tracing the perspectives as beginning with more sound acceptance of scientific research, gradually eased out by right-wing think tanks such as the Heritage Foundation in the 1970s and both the Competitive Enterprise Institute and the Thomas Jefferson Institute for Public Policy in the 1980s, along with a tidal wave of anti-establishment politics in Reagan’s 1980 electoral victory.   Ann Gorsuch, mother of Trump’s recent far-right appointee to the U.S. Supreme Court, headed the Environmental Protection Agency with a penchant for dismantling the regulatory and administrative state shared by the nationalist Bannon contingency in today’s executive branch.  She later resigned amidst threats from the Democratic-led Congress to investigate allegations into corruption; a SCOTUS decision in Chevron v. Natural Resources Defense Council 1984 broadened agency interpretation of legislation, reversing somewhat Reagan’s efforts at deregulation.  Nonetheless, institutional denial has increased as the science has become more certain; analyst Noam Chomsky points to institutional bias of corporations as a partial culprit, pointing out that a CEO of a multinational corporation, even if aware of the overwhelming dangers, cannot risk profits, even at great moral cost.  Anglo-American legal precedent offers evidence in Dodge v. Ford in 1919, codifying the position that corporations granted charters in America must pursue profits above all other considerations, meaning the rest, as I would imagine most people know, is public relations.  We’ll return to the contradiction of rising denialism corresponding to increasing uniformity in the scientific consensus momentarily, but to circle back to Krugman’s editorial, the official Republican party position has become increasingly fact-free, or perhaps more appropriately fact-abhorrent.  As he points out, whether it be environmentalism, the budget, healthcare, and the like, Trump’s programs, and by a marginal difference, the Paul Ryan fiscal wing, are almost completely without any constructive intent.  Trump’s own leaked internal analysis of his first stab at healthcare reform had even more dire projections than the Congressional Budget Office’s assessment, despite all the bluster to the contrary.  As Chomsky has pointed out previously, the Republican party no longer follows parliamentary procedure, nor does it care about the opinions of experts, scientists, or anyone offering anything challenging their fragile, fantastical world-view, echoing conservative analysts Thomas Mann and Norman Ornstein in declaring the “unparty” to be a “radical insurgency”.  This madness extends to the stubborn, Republican position that curtailing fossil fuel consumption would destroy jobs, no longer supported by any facts since renewable energy job projections far exceed any job loss associated with older energy programs, reported by Fortune; even today, the number of jobs in renewable energy exceeds that of non-renewables, according to a Department of Energy study.  In older arguments I’ve heard throughout my life, conservatives have pointed to the high cost of investment in renewable energy, again ignorant of the pervasive state capitalism model we’ve discussed previously : heavy government investment in the technology sector during the more expensive phase of research and development, followed by private interests cashing in once the technology becomes marketable.  So in summary, every argument offered by Republicans contravening meaningful action against ecological catastrophe folds like a cheap card table under the enormity of scientific consensus and thorough economic analysis.

So certainly we can point to institutional corruption and the shift rightward of both major political parties, placing one center right and the other in outer space, in explaining part of the propaganda campaign against environmentalism, but how do we explain some of the more curious phenomena with respect to attitudes and beliefs?  Sociologist Kari Marie Noorgard of the University of Oregon has an interesting set of answers in her 2011 book Living in Denial.  She compares a few competing theories on denialism: the first theory, for instance discussed in Harriet Bulkeley’s paper in 2000 on Australian attitudes, suggests that denialism is rooted in disinformation campaigns of corrupt institutions and ignorance of the population, neatly a problem of information. The more astonishing theory, echoing work in Norway by Hellevik and Barstad in 2004, asserts that willingness to solve climate change diminishes as public awareness grows.  Similar work in the United States by Kellsted, Zahran, and Vedlitz finds a similar, stunning trend : the more people know about the problem, the less responsible they feel for it.  Aside from the 26% of Americans who stubbornly refuse to accept the overwhelming scientific consensus, coincident with Trump’s more galvanized nativist base, many of us simply refuse to take responsibility for it, and thus fail to pressure the political elite to ignore intensive lobbying from fossil-fuel firms.  In fact, I found in reading the theory that I, too am part of the contingency; though I drive an electric car to reduce emissions, aim for aluminum can consumption rather than plastic bottle since aluminum is cheaper and easier to recycle, lobby officials on behalf of environmental causes, and eat virtually no meat, I nonetheless have a much larger carbon footprint than do most people, mainly in very frequent air travel to see family scattered across the continent.  It occurred to me in thinking about the problem that I, too, feel a sense of resignation in the defeat of either more environmentally-friendly or more malleable candidates, such as Clinton in 2016 (more the latter than the former, as the Democratic party barely addresses the climate concerns), and thus somehow feel less responsible for the damage done either in the manufacture of products that I buy or not more vehemently pressing local, state, and federal representatives to pursue more sustainable policies.  Calmer, more educated conservatives point to this contradiction as part of the problem of framing, as in the American Conservative.  They complain that liberals, if that term even makes sense anymore, appeal to social justice, uplifting indigenous populations vulnerable to sea rises, and the like, notions argued to be viscerally repulsive to their less educated Christian conservative brethren.  It’s rather stunning to me that one could profess to be Christ-like yet be unconcerned with social justice, but then again most flavors of religion offer a mixture of dogmatism, progressivism, oppression, liberation, and so on, depending on where you look.  Certainly Christian conservative politicians fall off the spectrum, with such notables as Jim Inhofe saying,

God is still up there... arrogance of
people to think that we, human beings,
would be able to change what He is doing
in the climate is to me outrageous.

In other words, if God chooses to let us burn, we shouldn’t buck His divine plans.  Fervently religious, the Republican candidates in the 2016 presidential election all denied climate science, with the exception of John Kasich and tentatively Jeb Bush, despite admonitions from the Good Book about protecting mother nature. Neither  of the “adults in the room” thought we should do anything about it, incidentally.  And it’s debatable whether Trump has ever read any book, let alone one on science of any kind beyond Little Golden Books.

In any case, Noorgard’s research suggests to me that most of us, whether we’re knowledgeable or not, bear responsibility for what happens with regard to this existential threat.  Admittedly, convincing the unscientifically-minded and the institutionally-indoctrinated of the gravity presents challenges, but we’re fast running out of options.  Facing believers and non-believers alike are

and the terrifying list grows.  And unlike in the mortgage crisis of 2008, the stock market crash of 1929, the savings and loans disaster of the 1980s, the automotive crisis of 2008 to 2010, and other “free market” disasters, corporations primarily responsible for ecological destruction will find no nanny state riding to the rescue when the elites finally ask for help, cap contritely in hand, to borrow an expression from Chomsky.