Crisis in American democracy: Part 11 – Is it too late to save democracy from the vice grip of corporate and political elites?

No 343 Posted by fw, November 19, 2011

“The public mind might have funny ideas about democracy. . . . if the society is based on control by private wealth it will reflect the value that the only real human property is greed and the desire to maximize personal gain at the expense of others. That small society based on that principle is ugly but it can survive. A global society based on that principle is headed for massive destruction. And that’s what we are. We have to have a mode of social organization that reflects other values that I think are inherent in human nature that people recognize.” —Noam Chomsky

In Part 10 of this 11-part series, Tom Ferguson provided examples of the banality of evil as exemplified by U.S. big business in buying elections at home and in making deals with Fascist tyrants abroad, namely Hitler and Franco. Referring to U.S. politics, Ferguson concluded that elections every four years are no substitute for a truly effective democracy.

In this, the concluding post of this series, filmmaker Jonathan Shockley brings to the fore sources of some of the public confusion about what democracy is / isn’t, and highlights Ferguson’s and Chomsky’s minimal requirements for establishing and maintaining a functioning democracy. He closes his film documentary with Chomsky’s cautionary warning — A global society based on control by private wealth will reflect the value that the only real human property is greed and the desire to maximize personal gain at the expense of others. On a global scale, that principle will surely take us on a path toward massive destruction.

Continuing with the format for this series, a complete 77-minute video of Shockley’s documentary film is embedded below followed by my time-indexed transcript comprising Part 4, including subheadings, and any external links and text highlighting. The time indexing facilitates switching from the text to its related place in the video. Of course, readers have the option of watching the complete 77-minute video at one sitting.

Golden Rule: The Investment Theory of Politics a documentary film by Jonathan Shockley

TRANSCRIPT

1:10:11 <On-screen text> Epilogue: Democracy: Myth & Reality

Confusion about what democracy is / isn’t

<Older instructional video> Narrator –

• If a community’s economic distribution becomes slanted, then despotism stands a better chance to get a foothold.
• A power scale is another important yardstick of despotism*. It gauges the citizens’ share in making the community’s decisions.
• Communities which concentrate decision-making in a few hands rate low on a power scale and are moving towards despotism. And to find out what way it is likely to go in the future, you can rate it on economic distribution and information scales.
• The lower your community rates on economic distribution and information scales, the lower it is likely to rate on respect and power scales, and, thus, to approach despotism. (*despotism: a form of government with a ruler having absolute authority; autocracy).

1:11:15 <On-screen text> — Myth: Democracy means “tyranny of the majority”

• Less public participation ==> Likelihood of “herd mentality” increases
• Herd mentality ==> No respect for minority rights
• Tyranny of the minority ==> Tyranny of the majority

1:11:40 Unidentified speaker — John Milton once said that those who put out the people’s eyes, reproach them of their blindness.

<Unidentified speaker/author> — Indeed, minority rule corrupts the judgment of the majority. That’s why only participation and self-management allow majorities to fully realize minority rights in private areas of decision making. This means the current restrictions on participation in the name of minority rights actually enforce the herd mentality undermining minority and individual freedom rather than protecting them. Undoubtedly, the greatest massacres and injustices in history have been perpetrated under the leadership or influence of elite minorities, not by the democratic impulse of the masses. Is it really surprising that the elite minority would try to convince the very majority over which they rule about the so-called “tyranny of the majority”? But no, that’s not what democracy is about.

“People should have a say in decisions in proportion to the degree they’re affected by them.”

1:1249 – Michael Albert, speaking at the 2008 Left Forum – . . . some would say we have over our lives. How much influence we have over decisions. One person might say, “We should have majority rule. Everybody gets the same vote, we tally them up, fifty percent plus one wins.” Another person might say, “We should have consensus. Our value for decision-making is consensus. We should all at least abide, or sign off on any decision.” Another person might say, “Well, I think that maybe one person should decide.”

Somebody might say that. I actually say all three, and many other things. I don’t think any of those are a principle. They’re all algorithms. They’re all methods of arriving at a decision. But they’re not a principle. One of them is right in one context, and one of them is right in another context. When you got dressed this morning, you didn’t say to yourself, “We should have a majority vote of everybody who’s going to be there of what color socks I wear.” And that made sense because that decision, it was appropriate to make that way. On the other hand, if you wanted to carry around a boombox and play it in here during the talk, you don’t get to decide that all by yourself. Why not? Because we all hear it. And the idea here is that people should have a say in decisions in proportion to the degree we’re affected by them. Now, we’re not going to be anal about this. It isn’t to the sixth decimal point. But broadly speaking, people should impact decisions in proportion to the degree they’re affected by them. The name for this, I think, reasonably is “self-management.”

To control the state, minimally the public needs a “serious party and press mechanisms” and public financing of elections

1:14:24 Tom Ferguson – If you want to control the state, you better have some fairly serious party and press mechanisms that work pretty well. In effect, you need to be financing the election campaigns.

People should have a role in determining what government does. That’s democracy.

1:14:38 Noam Chomsky, interviewed by Bill Moyers, A World of Ideas, 1989 – The public mind might have funny ideas about democracy. We say that we should not be forced simply to rent ourselves to the people who own the country. Rather we should play a role in determining what those institutions do. That’s democracy. Unless we move in that direction, human society probably isn’t going to survive. We now face the most awesome problems of human history — problems such as the likelihood of nuclear conflict, or the destruction of a fragile environment.

Bill Moyers – But why do you think more participation by the public, more democracy, is the answer?

Absent wide public participation, the values of powerful, wealthy elites will dominate government decision-making and social organization

Noam Chomsky – It’s the only hope that I can see that other values will come to the fore. I mean, if the society is based on control by private wealth it will reflect the value that the only real human property is greed and the desire to maximize personal gain at the expense of others. That small society based on that principle is ugly but it can survive. A global society based on that principle is headed for massive destruction. And that’s what we are. We have to have a mode of social organization that reflects other values that I think are inherent in human nature that people recognize.

Bill Moyers – And that would be? I want to see exactly what you mean.

Noam Chomsky – What are human beings? I mean, in your family, for example. It’s not the case that in a family every person tries to maximize personal gain at the expense of others. If they do, it’s pathological. If you and I are, say, walking down the street and we see a child eating a piece of candy and we see nobody’s around, and we happen to be hungry, we don’t steal it. If we did, that would be pathological. I mean the idea of care for others and concern for other people’s needs and concern for a fragile environment that must sustain future generations – all of these things are part of human nature. These are elements of human nature that are suppressed in a social and cultural system which is designed to maximize personal gain. We must try to overcome that suppression and that’s in fact what democracy could bring about. The way humans conceive of themselves, in their ability to act, to decide, to create, to produce, to inquire — a spiritual transformation.

THE END

FAIR USE NOTICE: This blog, Citizen Action Monitor, may contain copyrighted material that may not have been specifically authorized by the copyright owner. Such material, published without profit, is made available for educational purposes, to advance understanding of human rights, democracy, scientific, moral, ethical, and social justice issues. It is published in accordance with the provisions of the 2004 Supreme Court of Canada ruling and its six principle criteria for evaluating fair dealing

Crisis in American democracy: Part 10 – Elections no substitute for truly effective democracy

No 342 Posted by fw, November 18, 2011

In Part 9 of this 11-part series, Ferguson and Chomsky advanced the argument that, in America, “true” democracy poses a threat to the system of domination and control. America could learn something about “true” democracy from Haiti and Bolivia. In this post, Part 10, Ferguson provides examples of the banality of evil as exemplified by U.S. big business in buying elections at home and in making deals with Fascist tyrants abroad, namely Hitler and Franco. Referring to U.S. politics, Ferguson concludes that elections every four years are no substitute for a truly effective democracy.

Continuing with the format for this series, a complete 77-minute video of Shockley’s documentary film is embedded below followed by my time-indexed transcript comprising Part 4, including subheadings, and any external links and text highlighting. The time indexing facilitates switching from the text to its related place in the video. Of course, readers have the option of watching the complete 77-minute video at one sitting.

Golden Rule: The Investment Theory of Politics a documentary film by Jonathan Shockley

TRANSCRIPT

1:00:20 <On-screen text> “The impulse of democracy makes government less powerful and more active, to increase its functions and decrease its authority” —Samuel P. Huntington, Trilateral Commission report. [To put it more simply -- more democracy means less ability to govern, ergo, what we need is less democracy. See Oligarchy’s attack on Democracy, April 14, 2008].

1:00:34 <On-screen text> A few first world elections: 1992

“The investment bankers keep showing up . . . in the Democratic Party”

Tom Ferguson – When I’d walked through, in the case of the Clinton, the essay in 1992, I looked at industry significantly above the mean in support of Clinton — you know, oil and gas, capital intensive exporters, aircraft, computers, investment banking. The investment bankers keep showing up over and over in the Democratic Party going back to the New Deal.

1:00:58 <On-screen text> — 1996: Clinton losing ‘till the end

Bill Clinton – My fellow Americans after these four good, hard years I still believe in the place called Hope, a place called America.

Telecom industry “bought” the 1996 election for Clinton

1:01:17 Noam Chomsky – The 1996 election, Tom Ferguson pointed out that the election was to a large extent bought toward the end by the telecommunications industry, which poured a huge amount of money into it, enough to get Clinton elected, in fact.

1:01:32 <On-screen text> 2000 Election

In 2000, big business wanted Bush and they got him

Tom Ferguson – The ‘96 thing really does look rather like 2000. Something like three-quarters of the business community was strongly anti-Clinton. I don’t think that percentage changed that much. So you’re in a situation where I’m going to say, I’m going to stipulate, two-thirds to three-quarters of the business community wants Bush. The hullaballoo, if you elect Gore, would be quite a lot. Some of the labor guys thought maybe we should have some marches to sort of protest this [the Florida vote count debacle]. They clearly were advised don’t do this. If the situation had been reversed, and Gore had in fact won [the Supreme Court Florida vote decision] five to four, I think you would have seen almost chaotic scenes of the type where you had Republicans paying guys to go down into Florida and actually demonstrate. The consensus candidate, the business community, was winning. Throw the hand in and collect your tax cut due was, I think, the dominant sentiment. These guys weren’t trying that hard. You know, and Kerry clearly threw the hand in too fast on 2004. In the end, business folks won’t turn the place into a shambles. They’ll take a shot at it, try it, and if they lose, okay, we’ll take our tax cut and we’ll come back next year with more of the same.

1:02:40 — <Film clip from Trading Places with Eddie Murphy and Dan Aykroyd>

• Billy Ray (Murphy) – Oh, see, I made Louis (Aykroyd) a bet here. Louis bet me that we couldn’t both get rich and put you all in the poor house at the same time. He didn’t think we do it. I won.
• Louis – I lost. One dollar.
• Billy Ray – Thank you, Louis.
• Louis – After you.
• Billy Ray – Certainly. <Laughs. End of scene>

1:02:58 <On-screen text> Stock Prices & Political Power: A Close Correlation

Claim that politicians benefit from insider stock trading information

Tom Ferguson – Stock market prices actually reflect major investor knowledge of campaign contributions. We know that congressmen and senators earn the highest rates of return in recorded history on their portfolios, which means they’re being given insider information. And that doesn’t show on any campaign contribution. I had a colleague at the University of Texas, he did a paper called Death of a Congressman*. What he quickly discovers is that if they die unexpectedly, the stocks that the companies they’re close to crash that afternoon.

Political patronage in Malaysia

That theme was picked up by some folks on Indonesia and Malaysia where they looked at how the Asia crisis affected the stocks of – remember when Mahathir and his rival, Anwar, went down in Malaysia, at Mahathir’s hands, and it turned out the stocks of the companies that Anwar was close to crashed. They went down by something like – my memory is about 22-23 percent in the space of a week or two. But that was what political patronage was worth in Malaysia.

I looked at that paper and I said to my friend, <unintelligible>, you know, we could do — we could use this technique, which basically, what you do is you estimate what the stock market’s doing over about six months before. So you try to define a little event window, which is real tight, and the idea is track what stocks do on average and then see if the ones that are politically connected – or that you think might do better on average than that.

The infamous case of U.S. businesses funding the Hitler regime

And so we took that method over on probably the most famous argument about political money ever, which is the coming to power of Adolf Hitler. We worked this through – it took something like 3 or 4 years – and what we showed was like the last 25 years of American history and German history on this was all wrong. That, in fact, yeah, big business, in fact, did fund Hitler**, a big chunk of it, sort of somewhat loosely. The classical Nuremberg hypothesis*** was really right. They owned steel companies, I.G. Farben, Siemens things like that. Yeah, they were all into this. And there, stocks do move hugely, excessively, “excess returns” as they say.

• (*Note 1 – After extensive searching, I was unable to find any reference to this title by a professor at the University of Texas. However, I did find a reference to the title, Death of a Congressman: Estimating the Economic Value of Campaign Contributions by a professor at Stanford University, but this study appears unrelated to Ferguson’s point.)
• (**Note 2 – For more information, see Ferguson’s paper, Betting on Hitler: The Value of Political Connections in Nazi Germany. See also, Wall Street and the Rise of Hitler by Antony C. Sutton.)
• (***Note 3 – Nuremberg hypothesis is the process whereby ugly, degrading, murderous, and unspeakable acts become routine and are accepted as ‘the way things are done.’)

1:04:59 <On-screen series of questions with photos implying American business links with Hitler> — Where did they get the trucks? —GM; Where did they get the ideas? —Ford; Where did they get the names? —IBM; Who in America helped Hitler? —Rockefeller

1:05:24 <On-screen text> — Fascism can be useful — <On-screen text> — 1939: Democratically elected Spanish government overthrown. Fascist dictatorship installed. Strong labor movement wiped out.

Post-war Spain gives America military bases in exchange for military weapons

1:05:37 <Film of news footage> Announcer — Spain celebrates the 18^th anniversary of the termination of the Spanish revolution and victory over communism. The nation’s military might, much of it of American manufacture acquired in return for bases is on display for the occasion. [La Señora] Franco and her daughter are among the distinguished guests, as is the generalissimo himself. One of the colorful contingents is made up from the Moorish guards. As a crack unit of paratroopers passes in review, the Caudillo [Franco] looks on in pride. Eighteen years of peace and rebuilding.

Orwell’s failed literary attempt to rally the workers of the world

1:06:18 <Photo of George Orwell with title Spanish Civil War: Homage to Catalonia> Reader – “In the barber shops were anarchists. The barbers were mostly anarchists, solemnly explaining that barbers were no longer slaves. In the streets were colored posters appealing to prostitutes to stop being prostitutes. The anarchists were still in virtual control of Catalonia and the revolution was still in full swing. It was the first time that I had ever been in a town where the working class was in the saddle. Every shop and café had an inscription saying that it had been collectivized. Even the bootblacks had been collectivized. Waiters and shop workers looked you in the face and treated you as an equal. Servile and even ceremonial forms of speech had temporarily disappeared. Nobody said “Señor” or “Don” or even “usted”. Everyone called everyone else “comrade” and “thou” and said “salud” instead of “buenos dias”. You saw very few destitute people and no beggars except the gypsies. Above all, there was a belief in the revolution and the future, a feeling of having suddenly emerged into an era of equality and freedom. Human beings were trying to behave as human beings and not as cogs in the capitalist machine.”

1:07:54 <On-screen text> — Weak labor means “swivel chair” democracy

Tom Ferguson – You basically have two situations – One in which the population is quite well organized and mobilized, and then you’re likely to see the whole of the business community retreat to one party. But otherwise, not. And you know, just an awful lot of European history deals with situations in which you have fairly mobilized workers and often farmers, and so the business community may or may not be formally organized in one party but they’re pretty tight, cohesive and operate together.

Thatcherism’s death blow to the National Union of Mineworkers

1:08:28 Margaret Thatcher – The greatest divisions this nation has ever seen, were the conflicts of trade unions towards the end of a labor government. Terrible! They were acting as they were later in the coal strike before my whole trade union laws were through this government. They were out to use their power to hold the nation to ransom, to stop power from getting to the whole of manufacturing industry. You want division. You want conflict. You want hatred. There it was. It was that, which Thatcherism, if you call it that, tried to stop.

1:09:06 — <Clip from an unidentified movie>

• Man — Why?
• Sean Connery Character – You know why as much as me. You worked down there. Could you see yourself not lifting a finger?
• Man – I wouldn’t stay down there. I’d get out.
• Connery – And where would you find it different? There’s them on top and them below. Push up or push down. Who’s got more push? That’s all that counts.
• Man – They always had more.
• Connery – Well, we did a bit. Not enough but a bit. Enough to push the bastards a little.

Elections every four years is no substitute for a truly effective democracy

1:09:34 Tom Ferguson – As long as you have elections there’s a kind of negative check built in. You could just keep – I mean it’s not much of a constraint, but it is a constraint. The constraint is basically this – You could just vote them out. I don’t think that’s at all equivalent to effective democracy. All you do is – you can put a swivel chair in the Oval Office but you can’t make the guy or the lady who’s sitting in that chair do any policy for you.

FAIR USE NOTICE: This blog, Citizen Action Monitor, may contain copyrighted material that may not have been specifically authorized by the copyright owner. Such material, published without profit, is made available for educational purposes, to advance understanding of human rights, democracy, scientific, moral, ethical, and social justice issues. It is published in accordance with the provisions of the 2004 Supreme Court of Canada ruling and its six principle criteria for evaluating fair dealing

Crisis in American democracy: Part 7 – The short tragic life of the “Golden Age of Capitalism”

No 339 Posted by fw, November 15, 2011

In Part 6 of this 11-part series, Ferguson looked at labor’s struggle to build power and political influence during the 20^th century in America’s money-driven political system. In this post, Part 7, the film catches Obama and Geithner paying lip service to small business in stark contrast to a new breed of “business democrats” who are now running the Democratic Party. There’s a flashback to the Golden Age of Capitalism, which is short-lived indeed. By the ‘70s and after, destructive financial capitalists have effectively returned to a 19^th century approach to labor-management confrontation.

Continuing with the format for this series, a complete 77-minute video of Shockley’s documentary film is embedded below followed by my time-indexed transcript comprising Part 4, including subheadings, and any external links and text highlighting. The time indexing facilitates switching from the text to its related place in the video. Of course, readers have the option of watching the complete 77-minute video at one sitting.

Golden Rule: The Investment Theory of Politics a documentary film by Jonathan Shockley

TRANSCRIPT

31:53 <On screen text> — OK, big business grows & dominates, but what about Small Business?

Tom Ferguson – The small business story is they’re so different. I mean everything from MA & Pa groceries to hundred-person factories.

32:06 – Reta Lewis — I’m Reta Lewis. I’m the Director of the Office of Public Liaison. The work that I’m doing is really about reaching out to the numerous stakeholders around the country who want to have a seat at the table. Women, business organizations and women executives and women leaders in their own companies wanted to come in and have an opportunity to speak to our agency review team and our policy teams about the work that they have been doing and how they would like to see this next administration move as it relates specifically to small business. These are women who have revenues of more than a million dollars. Organizations like Count Me In, out of New York, who are really about helping women who start building their companies and now are doing additional efforts about moving businesses to the million dollar level.

Obama and Geithner talk up small business though Obama is “first and foremost a candidate of finance” says Ferguson

32:53 Barak Obama – That drive to make a profit is what has always fueled our prosperity. What has always fueled our prosperity. . .  And their company now has 78 employees, has grossed nearly $4 million in sales last year. Tom Masterson. Where’s Tom? Tom’s right here. Co-found TEM Electric. Today the company employs 75 people and has over $12 million in revenues. Andy Wells. His company generated $54 million in revenues and his customers included Coca Cola, Boeing and Oshkosh. So small businesses like these are driving our economy. You’re the job creators responsible for half of all private sector jobs. You’re the starting point for the products and brands that have redefined the market. After all, Google started out as a small business. McDonald’s started with just one restaurant. And small businesses don’t just strengthen our economy. They also strengthen our communities. Your customers aren’t just anonymous folks who buy what you sell. They’re your friends, they’re your neighbors. . . .

34:02 Timothy Geithner, US Secretary of the Treasury – Small businesses are the engine or America’s dynamism. You create and sustain most of the jobs in the country. You are the anchor of our communities and you are ever-more closely linked to the global economy. When you prosper, the nation prospers. And when the national economy is hurting you bear that burden heavily but you will lead us out of this.

34:21 Tom Ferguson – [Ferguson starts off talking about France but the film editor cuts him off in mid-sentence and splices in talk about the New Deal]. In places like France the amazing swings from left to right of the small business guys are quite striking. In some regions and times, they’re all going down the tube because of a depression or something like that, you will see cases where they’ll support quite liberal . . . <splice here> –

During the New Deal, big business spread self-interested misinformation about small business

It’s clear I think that despite all the stories about how small business was dead, opposed to The New Deal, when you go back and look at polls and things like there was a fair amount of small business support for some of it. An awful lot of the rhetoric that emanates from big business about small business is just self-interested garbage trying to tell you, in effect, worry about them. I mean that’s the sort of, if you want, one generalization about American life. When big business guys start telling you how it’ll kill small business, think “big business” and you’ll understand.

35:09 <On screen text> The Rise & Deregulation of Finance

After World War 2, the creation of social democratic programs lead to the “Golden Age of Capitalism”

Noam Chomsky – In a substantial measure the food crisis plaguing much of the South and the financial crisis of the North, has common roots, namely the shift towards neoliberalism since the 1970s. That brought to an end the post-war, post-world war Bretton Woods system. It was instituted by the United States and Britain right after World War 2. It had two architects: John Maynard Keynes of Britain and Harry Dexter White of the United States. They anticipated that its core principles, which included capital controls and regulated currencies, would lead to relatively balanced economic growth, and would also free governments to institute the social democratic programs – welfare state programs – that had enormous public support around the world. And to a large extent they were vindicated on both counts. In fact, many economists called the years that followed, until the 1970s, the Golden Age of Capitalism.

36:19 <On-screen text> Anti-colonial struggles at the same time

Noam Chomsky – Now, that Golden Age led not only to unprecedented and relatively egalitarian growth, but also the introduction of welfare state measures.

36:33 <On-screen quote> — “The 60s were an excess of democracy, related to relative affluence and economic expansion. This led to a breakdown of traditional means of social control . . . a delegation of political and other forms of authority, and an overload of demands on government.” —Trilateral Commission Report

But lenders and investors worked to sabotage Golden Age social democratic programs

36:46 Noam Chomsky – Keynes and White were perfectly well aware that free capital movement and speculation inhibit these options. Professional economics literature points out what should be obvious that the free flow of capital creates what is sometimes called a virtual senate of lenders and investors who carry out a moment-by-moment referendum on government policies. And if they find that they’re irrational – meaning they help people instead of profits – then they vote against them by capital flight, by tax on a country and so on.

Productivity has doubled from 1955 to 1995, so how come we work longer hours just to make ends meet?

37:26 Michael Albert, author, Participatory Economics – In the 1950s in the United States, it was called the Golden Age of Capitalism and there was a certain amount of output. And it was a certain amount of output so there’s was this much output per capita in the economy. And then 40 years later there was double that, almost exactly – just coincidentally, double the amount of output per capita. So if you think about it you realize that if in 1995 people work half as long as they work in 1950, right, and from 1955, then the output per person will be the same as it was in the Golden Age of Capitalism. So you sort of ask yourself, well why aren’t we working one month on and one month off? Or why aren’t we working a thirty and a half hour week? After all, that technological innovation has created a condition in which we could do that and we’d be as well off as in The Golden Age of Capitalism. So why don’t we do it?

Market competition drives us to work ourselves to death

38:14 Michael Albert — And the answer is because markets don’t let us. It’s not that everybody got together and decided we’d rather work twice as long, as we could. And in fact, people work longer than they worked in 1955. People didn’t decide I want to do that. I mean even the rich lawyers didn’t decide I want to do that. Rather, market competition compels it, coerces it because if you don’t do it you get out-competed. So there’s this drive to accumulate, this drive to work ourselves to death in essence.

The accumulated wealth from increased productivity goes mostly to the powerful and the rich

38:46 Michael Albert — Now it’s also true that that extra – where’s the extra product go? Where’d the double the output go? Well, it partly goes to military stuff to protect the system. It partly goes to police stuff to protect the system. It partly goes to cleaning the ecological messes that the system produces. And it partly goes to the rich. And so the normal person is marginally better off. And, in fact, from 1970 to the present the normal person doesn’t get better off at all.

The remaking of the Democratic Party in the ’80s and ‘90s run by “business democrats”  

39:15 Tom Ferguson – Joel Rogers and I wrote a book called Right Turn where we sort of walked through the remaking of the Democratic Party in the 1980s. Effectively, the business democrats run the basic modern Democratic Party. That was what Clinton, and for that matter, Al Gore and those people were all about. That’s what all the subsequent Democratic Party candidates thus far have been to, including the current president. The folks who created this crisis are to a very large measure the folks who principally financed the Obama campaign. That’s to say, this guy [Obama] is first and foremost a candidate of finance. I mean, you hear all these government Sachs’ jokes – Goldman Sachs – no reason to pick on them <unintelligible> – Morgan Stanley, Bank of America. There’s a big raft of hedge funds and investment houses. They dominate the early financing among large investors for Obama. I suspect to this day you’ll find that the majority democrats – the firms that continuously contribute to the Democrats in big numbers are still, at least vestigially more capital intensive.

A 19^th century approach to labor-management confrontation returns in the ‘90s

Tom Ferguson — But obviously the big story in the 1970s, and after – first of all the enormous role finance takes, and then the harshness – you know, as I said, the private equity case of the ‘90s – you could see inside finance folks like Kohlberg Kravis Roberts, those folks At that point when they get into the business of running companies — and where your basic scheme is buy a company, grab the pension fund, pull the assets, as much assets out of that as you can, put it in the rest of the firm, bust up the firm, sell it and things like that, and also fire a lot of people to pay down debt – that’s in fact what seems often to happen in these takeovers. you’re beginning to act like a sort of classic capitalist but what you’re got there is you’ll also find these folks very antagonistic to labor. And a lot of the folks in the – I mean you get almost a 19^th century approach to labor-management confrontation.

Case study of “destructive financial capitalism”

41:08 Juan Gonzalez, Democracy Now [2009] – We turn now to a labor struggle here in New York. More than 130 workers at the Stella D’Oro Biscuit Company in the Bronx have ended an eleven-month strike. The workers returned to their jobs on Wednesday, a week after the National Labor Relations Board ordered the company to reinstate and pay back wages to the striking workers. The employees at Stella D’Oro walked off their job last August after company officials tried to force them to accept a 20 percent pay cut, elimination of sick days and overtime, reductions in vacations and holidays, and an increase in employee healthcare contributions. While the Stella D’Oro workers have returned to their jobs, their fight isn’t over. The company’s owner, the Connecticut-based private equity fund Brynwood Partners, is now threatening to close the factory within ninety days.

41:54 Louie Nikolaidis, attorney — It was a family-run company for many, many years, and then that got sold to corporate owners, first Nabisco, and then Nabisco got bought by Kraft. So Kraft was the owner that sold it to the private equity company. So when they say it’s not profitable, they really don’t mean it’s not profitable. They mean, we don’t get the super rates of profit that we expect. These folks tell their investors that they’re going to return a 30 to 35 percent rate of return. That is an unreasonable rate of return . . . . They’re not an operating company; they’re a financial investor. They’re only going to keep it for three to five years, and they’re going to turn it around. So their whole point was to reduce labor costs to the point where they could get another buyer to come in and have a contract that was gutted. Some of it was financial, and some of it was issues of control, not just financial. Like one of the provisions in this contract, it’s an old kind of — if people know CIO, it’s an old industrial contract. We have a provision that says that the cookies will have union labels on them. So that was one of their proposals, to take off the union labels from the packaging. Now, that doesn’t save them any money. It’s just an issue of who’s controlling what.

FAIR USE NOTICE: This blog, Citizen Action Monitor, may contain copyrighted material that may not have been specifically authorized by the copyright owner. Such material, published without profit, is made available for educational purposes, to advance understanding of human rights, democracy, scientific, moral, ethical, and social justice issues. It is published in accordance with the provisions of the 2004 Supreme Court of Canada ruling and its six principle criteria for evaluating fair dealing