Freedom and Power (Why American capitalism is so rotten, Part 4)

Why so many Americans feel powerless, and some are turning to Trump’s neofascism.

Friends,

Welcome back to week 4 of our inquiry into American capitalism and the common good.

Today, I want to suggest why so many working-class Americans are attracted to a sociopathic liar who advocates neofascism.

IN 2010, A MAJORITY OF THE SUPREME COURT decided in Citizens United vs. the Federal Election Commission that corporations are people under the First Amendment, entitled to freedom of speech. Therefore, said the court, the Bipartisan Campaign Reform Act of 2002 (commonly referred to as the McCain-Feingold Act), which had limited spending by corporations on political advertisements, violated the Constitution and was no longer the law of the land.

Yet as a practical matter, freedom of speech is the freedom to be heard, and most citizens’ freedom to be heard has been reduced as big corporations with deep pockets get the loudest political voice.

Nowhere did the five members in the majority acknowledge the imbalance of power between ordinary citizens and big corporations able to bribe politicians with campaign donations. In practice, the “freedom of speech” granted by the Supreme Court to big corporations has drowned out the speech of ordinary people — especially those without college degrees who had been losing economic ground for decades.

There is no countervailing power. By the 2016 campaign cycle, corporations and Wall Street contributed $34 to political campaigns for every $1 donated by labor unions and all public interest organizations combined. (And the richest one-hundredth of 1 percent of Americans accounted for 40 percent of all personal donations.)

Citizens United opened the floodgates to big money, but big money was already polluting American politics. The flow really began in 1971, when future Supreme Court Justice Lewis Powell wrote a memo for the U.S. Chamber of Commerce urging corporate America to finance a massive lobbying operation in Washington.

WHAT HAVE BIG CORPORATIONS and the ultra-wealthy received for all their money? Among other things:

— Lower trade barriers, which have enabled corporations to outsource abroad — making more stuff in low-wage nations. While Americans have got the benefit of cheaper goods, workers have also lost higher-paying and more secure work. As a result, entire sections of America have been denuded of manufacturing jobs.

— The deregulation of Wall Street, which has enabled corporate raiders (now dubbed shareholder activists and private-equity managers) to force CEOs to abandon all other stakeholders (workers, communities, those concerned about the environment) to enrich shareholders.

— Deregulation of finance, which has also allowed high-paid bankers to pocket huge sums while exposing most Americans to extraordinary economic risks. One result was the financial crisis of 2008 and the taxpayer-funded bailout of large Wall Street firms. Americans who subsequently lost their jobs, savings, and homes were understandably outraged, especially because these same bankers were never held accountable.

— Weakened unions, causing the unionized portion of the workforce to drop from 35 percent of all private-sector workers in the 1960s to just 6 percent today, and wages to stagnate.

— Weakened laws against monopolies, resulting in a much greater degree of industrial concentration — which, in turn, has meant higher prices for consumers, fewer employers from whom workers can find jobs, and greater political clout for the biggest corporations.

— Lower taxes and wider tax loopholes for large corporations and the ultra-wealthy, which have required that other Americans pay higher taxes and do without many of the social benefits taken for granted in other rich countries — as the national debt has grown.

— Weakened laws against insider trading, resulting in even more rigging of financial markets in favor of those at the top, with access to financial information unavailable to most investors.

IT HAS BEEN A VICIOUS CYCLE. Each change in laws has ratcheted wealth and power upward, making it easier for the wealthy and powerful to gain further legal changes that ratchet even more wealth and power upward.

All of this has taken a profound toll on public trust. A growing portion of the American public no longer believes that the nation’s major institutions are working for the common good. They are deemed to be vessels for the few.

When the game is widely seen as rigged in favor of those at the top, society shifts from a system of mutual obligations to a system of private deals.

Rather than be founded in the common good, political and social relationships increasingly are viewed as contracts whose participants seek to do as well as possible for themselves, often at the expense of others (workers, consumers, the community, the public) who do not walk the corridors of power.

THE EXPANDING FREEDOM OF CORPORATIONS TO DO WHAT THEY WANT may theoretically enlarge the economic pie for everyone. But in recent years, the major consequence of such “freedom” has been to give bigger slices to the top executives of large corporations and Wall Street banks and their shareholders, and smaller slices to almost everyone else.

“Free enterprises” designed to maximize shareholder returns have also harmed the environment, endangered the health and safety of consumers and workers, and defrauded investors.

Even when such actions are illegal, some corporations have chosen to defy the law when the risks and costs of getting caught are less than the profits to be made. The list of enterprises that in recent years have made such a calculation, wittingly or unwittingly — including BP, Halliburton, Citigroup, and General Motors — makes clear that corporate power will infringe on individual liberties if the potential financial returns are sufficiently high.

The freedom of enterprises to monopolize a market likewise reduces the freedom of consumers to choose. Allowing internet service providers to reduce or eliminate competition, for example, has made internet service in the United States more expensive than in any other rich country.

Permitting drug companies to prolong their patents by paying generic producers to delay lower-cost versions has kept drug prices higher in the United States than in any other rich country.

Most of us remain “free” in the limited sense of not being coerced into purchasing internet services or drugs. We can choose to do without them. But this is a narrow view of freedom.

SIMILARLY, THOSE WHO VIEW THE GLOBAL ECONOMY as presenting a choice between “free trade” and “protectionism” overlook the centrality of power in determining what is traded and how.

The real issues involve the degree of protection other nations give to the intellectual property of American-based corporations, how other nations treat the assets of U.S.-based investment banks, how much protection Big Agriculture receives, and the access of other nations’ state-supported enterprises to the American market.

In such negotiations, the interests of big American-based corporations and Wall Street banks have taken precedence over the jobs and wages of American workers.

The United States has never sought to require, for example, that big corporations that shift their production abroad compensate their American workers for lost jobs and wages. In fact, America has no system for compensating the losers from trade.

In all these respects, freedom has little meaning without reference to power.

Those who claim to be on the side of freedom while ignoring the growing imbalance of economic and political power in America are not in fact on the side of freedom. They are on the side of those with the power.

One consequence of this imbalance is the emergence of neofascism in America.

Is it really so surprising that some who feel they no longer have a voice — that the economic and political system is rigged against them — prefer a demagogic strongman who will at least shake up the system over a president who appears to personify that system?

Donald Trump is not on the side of American workers, of course. To the contrary, his one legislative accomplishment during his bonkers presidency was a major tax cut for corporations and the ultra-wealthy.

But Trump sounds tough. He says he’ll give voice to Americans who have been left behind. He deploys racism, Islamophobia, xenophobia, and misogyny as weapons to make many white, Christian, American males feel more powerful.

When Trump speaks of wreaking revenge against the “deep state,” “socialists,” the media, and “enemies” within, many voiceless Americans believe he’s talking about their own vindication against the Establishment.

Trump is selling dangerous snake oil. Why are there so many buyers? Because they have felt acutely vulnerable, and his snake oil gives them hope of becoming powerful.

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Next week, we’ll look at the myth of meritocracy in America.

Thank you again for joining me on this expedition. I urge you to add your comments, take part in our discussion, and share with others.

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