The Two Capitalisms

With a kind of religious fervor, American conservatives love to talk about their love of capitalism, as if it has a singular definition and can always be counted on to serve public and national interests. The intelligent way to think about capitalism is that it can be of two kinds. The good kind is patriotic and stakeholder oriented, the bad kind is selfish and shareholder obsessed. The global economic downturn is strong evidence of the dominant second form of capitalism that has caused so much human suffering while it has served the rich and powerful.

When those with power take actions purely to serve corporate financial interests even though it greatly harms employees, the middle class and the national economy then the bad kind of capitalism is being pursued. Think of the mass export of good jobs, especially in manufacturing, the preference for imported goods, and the investment of capital to build new manufacturing and research facilities in other countries. Maximizing financial returns to reward corporate bigwigs and stockholders even though the actions greatly harm the US economy and society results from US companies practicing bad, immoral capitalism. Think of this development as the conquest of Wall Street over Main Street , of those who make money over those who create and make products, of those who promote economic inequality over those who value the middle class.

The power elites that have succeeded in perverting capitalism have also succeeded in making much of the American public so dumb and distracted that they no longer function as informed and effective citizens, which has allowed the government to be hijacked by the rich and powerful through a two-party plutocracy.

Selfish capitalism was exemplified by the role of Fannie Mae in creating the economic disaster by perverting the housing market, as conservative David Brooks correctly concluded; he noted the “leadership class is fundamentally self-dealing;” it practiced “shameless self-enrichment” which produced disastrous results.

To be clear, the conflict is not between capitalism and socialism, the way right wing ideologues talk, but between the good and bad kinds of capitalism, which those on the left need to learn how to talk about. Bad, greed-driven, too-big-to-fail capitalism has ruined the US for all but the rich which have sucked off much of the nation’s wealth.

A fine analysis by Harold Meyerson on the difference between the highly successful German economy and the dismal US one drives home the crucial differences between the two forms of capitalism. The need is for the US to learn from the more successful German, good form of capitalism and develop policy reforms that could rejuvenate the US economy by curbing the bad form of capitalism. The ideas that Republicans keep advocating are all wrong because all they want to do is promote bad capitalism, which only serves the interests of the rich and powerful, not ordinary Americans, not the middle class, and not workers. Peter Coy has also assembled great information on what can be learned from other nations.

The German economy makes the US one look like it is on its deathbed. The German tripartite system has business, labor and government working together. Faced with the same competition from low wage developing countries and the entire globalization condition, Germany has a booming manufacturing sector that constitutes almost twice the share of the economy than that in the US . And even in the current global economic recession German unemployment is 7 percent. The tripartite system has kept German labor unions strong and, therefore, protects the middle class whose pay has risen at roughly the same rate as top incomes. This is in stark contrast to the rich-getting-richer and union–busting situation in the US . Indeed, the top 1 percent in the US are seeing their proportion of total income rise dramatically, even as their German counterparts are seeing their share of total income shrink. German corporate boards are required by law to have an equal number of management and employee representatives. By law!

Germany ’s stakeholder capitalism benefits the many unlike the US where selfish capitalism benefits the upper class and brutalizes everyone else. Corporate power has not captured the German government the way it has hijacked the US government.

One powerful and highly successful public policy used by several democracies with strong capitalistic systems in the current economic downturn is providing companies with funds to keep workers on the payroll until demand improves. This directly fights unemployment and puts government dollars directly in the pockets of workers, in stark contrast to the many billions of dollars the US has spent which have not helped fight unemployment nor helped ordinary Americans, because the billions have flowed to corporate and financial interests. This more sensible approach that boosts consumer demand and spending has been used by Singapore , Germany and Japan , for example.

Steven Pearlstein recently examined the history of IBM and noted its “outmoded ethos – namely that the company exists not simply to maximize profit for shareholders but to maximize the benefits it can offer to customers, employees and the society as a whole.” Exactly right.

If President Obama was as smart as he and so many others think he is, and if he was a genuine leader and seeker of deep reforms, he would learn, respect and work like a dog to apply the best practices other nations are using to get better and fairer economic results. But as the Center for Public Integrity found, Obama has showered benefits on big time funders of his presidential campaign. Will he be a forceful advocate for capitalism with a human face?

Don’t hold your breath.

If Republican presidential hopefuls and crony capitalists cared as much about serving the public interest as serving corporate desires, than they would stop their nonsensical free market claptrap embracing selfish capitalism and seek a more patriotic form that puts the nation first. Time to stop talking about cutting taxes. Pursue new and better ideas. Face reality, a free market that provides freedom for corporate and financial interests to victimize the public must be changed. Admit that!

Don’t hold your breath.

US-NATO are Planning a Ground War in Libya, Military Intervention in Syria..?

Bilderberg intended to launch new war in the Middle East, with Syria being its prime target

Even as the Obama administration prepares to launch a full ground war in Libya while expanding its drone attacks inside Yemen and Pakistan, US warships are being moved towards the Mediterrenean coast of Syria, precisely in line with forecasts that the Bilderberg Group intended to launch a massive new war in the Middle East, with Syria being its prime target.

In addition to information received by Infowars from military sources at Ft. Hood who tell us that troops are being readied for a full-scale U.S.-led ground invasion of Libya by October, the Obama administration is simultaneously considering opening up yet another front, by moving the USS Bataan amphibian air carrier strike vessel, along with 2,000 marines, 6 war planes, and 15 attack helicopters to a location just off the Syrian coast.

“This huge concentration of naval missile interceptor units looks like preparations by Washington for the contingency of Iran, Syria and Hizballah letting loose with surface missiles against US and Israeli targets in the event of US military intervention to stop the anti-opposition slaughter underway in Syria,” reports DebkaFile.

Another indication that the US is planning an intervention in Syria is the fact that Hizballah has moved its rockets from northern Lebanon to areas in the center of the country, acting on a warning from Iranian intelligence to move the weaponry “out of range of a possible American operation in Syria”.

Veteran reporter Jim Tucker’s warning, provided to him by his routinely accurate inside sources, that the powerful Bilderberg Group was planning a gargantuan new war in the Middle East to outstrip anything taking place in Libya, is now moving forward.

On Monday, journalist Adrian Salbuchi also told Russia Today that Bilderberg’s “hidden agenda” towards Syria would make itself visible after the conclusion of the elitist confab in St. Moritz, Switzerland, a forecast already coming to fruition.

Syrian rights organizations say that around 1,300 civilians have been killed since the start of the uprising in March against President Bashar Assad. Around 300 soldiers and police have also been killed. Thousands of Syrians fled the town of Maarat al-Numaan yesterday as government troops and tanks moved north.

The US military-industrial complex has been very choosy about who it targets for regime change under the umbrella of “humanitarian intervention”. Despite the fact that protesters in Bahrain and Saudi Arabia have been the victims of similarly brutal government crackdowns, the US has turned a blind eye.

Quite how the Obama administration believes the United States can afford to prosecute yet another war while it is still engaged in two major occupations and a number of other regional conflicts, and as top ratings agencies warn the country is about to lose its triple A credit status due to insurmountable debt problems, is a mystery.

Libya Seeks Nigeria”s Help to End NATO Bombardments

Abuja, Jun 25 (PTI) Libya has sought Nigeria”s help to halt the air attacks by NATO forces which seeks to force the embattled Libyan leader Muammar Gaddafi to quit.

Libyan Foreign minister Abdullahi Oubaidi met President Goodluck Jonathan yesterday and said he extracted a promise from the Nigerian leader to take up the issue at the forthcoming meeting of the African Union in Equatorial Guinea.

“The action of NATO is a strict violation of the sovereignty of Libya. The matter ought to have been allowed for internal resolution but has been blown out of control by NATO which has been bombing and killing innocent civilians”, Oubaidi said adding that infrastructure in the country was totally being destroyed.

The action of NATO in the country which targets the air defence system of Libya came against the backdrop of allegations that civilians were being attacked while they try to exercise their fundamental human rights of embarking on peaceful protests.

Initial missile bombardments led by France was followed by a combination of attacks by other world powers with war planes trailed by combat helicopters.

African Union has sent several emissaries including South African President Jacob Zuma to the country to seek a peaceful solution to the civil war.

During the India-Africa Forum Summit held recently in Addis Ababa, President Teodore Obiang Nguema Mbasogo of Equatorial Guinea and the Chairman of African Union lamented the backseat given to Africa in tackling such problems.

Obama Joins Talks on Massive US Budget Cuts

Talks on slashing trillions in domestic social spending are set to resume Monday at the White House, with President Obama meeting separately with the top Democrat and Republican in the US Senate, Harry Reid and Mitch McConnell.

The White House announced Friday that Obama would intervene personally in the budget talks, after negotiations headed by Vice President Joseph Biden broke down Thursday. The two Republican negotiators, Congressman Eric Cantor and Senator Jon Kyl, walked out of the talks, demanding that the Democrats drop all proposals for tax increases on the wealthy.

The federal government has been unable to borrow money since hitting the debt ceiling of $14.3 trillion in May. The talks have been conducted under the shadow of an August 2 deadline, by which point Treasury financial maneuvers will be exhausted, and the US government will be unable to pay its bills, potentially triggering a global financial crisis.

Since this round of budget talks began, in early May, the Obama administration and the Democrats have retreated steadily before the demands of the Republican right, although the Republicans control only the House of Representatives, while the Democrats hold both the Senate and the White House.

The Democrats began the talks by accepting two of the three main conditions set by the Republicans: that any measure to raise the debt ceiling should be tied to massive cuts in domestic spending, particularly in entitlement programs like Medicare, Medicaid and Social Security; and that the dollar amount of the increase in the debt ceiling would be matched, dollar-for-dollar, by the amount of deficit reduction.

The third condition set by the Republicans, and dramatized by their walkout Thursday, is that the deficit reduction come exclusively from spending cuts, with no increase in taxes on any section of the wealthy or big business.

The so-called breakdown of the talks Thursday was a largely orchestrated affair, designed to allow the Democrats to posture as advocates of tax increases for the wealthy and corporate interests before their inevitable and completely predictable cave-in.

The “collapse” and subsequent resumption of the budget talks were likely prepared the night before Cantor’s much-publicized “walkout,” when House Speaker John Boehner visited the White House Wednesday night for a closed-door meeting with Obama, which went unreported for several days.

The Hill newsletter, which tracks congressional activities, noted, “The White House did not seem particularly surprised by Cantor’s announcement. House Speaker John Boehner (R-Ohio) met with Obama at the White House Wednesday night before Obama addressed the nation on Afghanistan, but officials would not say if Boehner warned Obama of Cantor’s decision.”

As the Associated Press noted, “One of the byproducts of Cantor’s departure was to provide an opportunity for partisans on all sides to make statements at odds with the positions they may have to take to achieve a deal. Democrats insist that at least some new revenues are needed—both to soften spending cuts and to line up the Democratic votes needed to pass the measure.”

A torrent of populist demagogy then followed, as leading Democrats from House and Senate, as well as Obama and Biden, accused their opponents of defending the wealthy and proclaimed themselves the advocates of the “middle class.”

An examination of the actual tax measures proposed by the Democrats, however, reveals that they have already gone 90 percent of the way towards the Republican demand that nothing should touch the accumulated wealth of the super-rich.

House Minority Whip Jim Clyburn of South Carolina, speaking on the ABC News program “This Week” on Sunday, said the Democrats were proposing only the ending of obvious tax boondoggles, like the subsidies for oil companies. “That is no tax hike,” he claimed. “You only hike taxes when you raise rates. We are not asking anybody to raise anybody’s rates.”

Speaking on the CNN program “State of the Union,” House Minority Leader Nancy Pelosi made the same argument, saying, “It’s not a question of tax increases,” only closing loopholes.

At a Democratic Party rally in Ohio Saturday, Vice President Biden hailed the progress in the budget he has chaired, which have identified more than $1 trillion in domestic spending cuts, then declared that the rich should make a contribution too. “We’re not going to let the middle class carry the whole burden,” he said. “We will sacrifice. But they must be in on the deal.”

“We’re never going to get this done,” he continued, “we’re never going to solve our debt problem if we ask only those who are struggling in this economy to bear the burden and let the most fortunate among us off the hook.”

Biden did not explain why those who are struggling should bear any of the burden for a financial crisis caused by the super-rich. Nor did he address the question why those responsible for the financial swindling and looting that triggered the 2008 Wall Street crash are making more money than ever, instead of being prosecuted and locked up.

Obama’s spokesman Jay Carney made the same type of argument as Biden, telling the press Friday, “The president is willing to take tough choices but he cannot ask the middle class and seniors to bear all the burden for deficit reduction and sacrifice while millionaires and billionaires are let off the hook.”

Again, there was no explanation of why working people and the elderly should bear any portion of the burden for a crisis that they did not cause.

The rhetoric about “shared sacrifice” is only a preparation for a further cave-in to the demands by the financial elite that the working class pay for the crisis caused by the billionaires.

In his own appearance on ABC’s “This Week” program, Senate Republican leader Mitch McConnell punctured the phony populism of the congressional Democrats and the Obama administration, pointing out that the Democrats, despite their rhetoric, were equally opposed to tax increases for the wealthy.

“Back in December,” he said, “when Democrats owned the government, they had a huge majority in the Senate, a huge majority in the House, we had a vote in the Senate on raising taxes on people making over $1 million a year. That was defeated. Democrats voted against it, a reasonable number of them. And then two weeks later, they all came together and voted to extend current tax rates.”

Obama ceded to the Republicans in December on the issue of extending the Bush tax cuts for the wealthy, even when he still had large Democratic majorities. In April, he worked with Republicans in passing more than $60 billion in cuts in current spending on domestic social programs. There is no reason to expect a different outcome of the ongoing talks on the debt ceiling.

The two established parties represent rival trends within the corporate ruling elite. The Republicans are the more aggressive, because they represent the most openly rapacious faction. The Democrats employ hollow phrases at times to sustain illusions among working people that they represent an alternative, while voicing the concerns of those sections of the ruling elite that fear that policies that too openly favor the multi-millionaires will produce a reaction from the working class that will prove impossible to control.

The tax measures now proposed by the Democrats only demonstrate to what degree the financial oligarchy has imposed its stranglehold on American political life. Among the proposals put forward by the Democrats, which have virtually no chance of being enacted, are to eliminate the $3 billion tax break for corporate jets, to end a tax break for hedge fund operators worth $20 billion, and to limit tax deductions for households with incomes of more than half a million a year.

Such is the anti-democratic and unrepresentative state of the US political structure that even such slight impositions on the wealthy are considered completely unrealistic, while the two parties debate whether Medicare and Medicaid, which underwrite healthcare services for 100 million people, should be abolished, or “merely” cut by half a trillion dollars.

Can The Fed Stop Quantitative Easing?

If the Fed stops QE, confidence in the US dollar would rise. Money would flow into US investments, both supporting the US stock market and helping to finance the large US budget deficit. Gold and silver prices would decline. Negative dollar expectations would be squeezed out of oil and grain prices, although drought, flood, and supply factors would continue to impact grain prices and the administration’s wars can impact oil prices.

If a halt to QE coincided with more European sovereign debt problems, the dollar might regain a lot of the ground that it has lost.

Looked at from this perspective, the Fed should halt its bond purchases, and people should bail out of their bullion investments and commodity speculations.

But there are other factors in play–the economy and continuing solvency worries about financial institutions. At a June 22 news conference, Federal Reserve chairman Ben Bernanke said: “Some of the headwinds that have been concerning us, like the weakness in the financial sector, problems in the housing sector, balance sheet and deleveraging issues, may be stronger and more persistent than we thought.”

Despite the fiscal stimulus of the large federal budget deficit and Obama’s $700 billion stimulus program, the economy’s growth and employment performance is not up to expectations. Indeed, as John Williams says, if inflation were fully measured, the economy’s growth could be negative, and if unemployment were correctly reported, the current rate would be over 22%.

An economy this weak offers no support to US-derived corporate profits or to the outlook for financial organizations. US corporations have made large investments abroad in the production of goods and services to sell to US consumers who have neither the income nor borrowing capacity to purchase. People without jobs and those with the low paid jobs provided by domestic service, such as hospital orderlies, bartenders, and waitresses, cannot afford to buy a house even at the depressed current prices. To the extent that financial institutions’ books remain filled with real estate paper, the financial crisis is not over.

Moreover, it is unlikely that the Dow Jones average can be sustained without growth in employment and GDP.

Can the Fed afford to sacrifice recovery, employment, and Obama’s reelection to save the dollar and price stability? This is the unasked and unanswered question.

Americans Shift to More Negative View of Libya Military Action

PRINCETON, NJ — Americans are more likely to say they disapprove than approve of the U.S. military action in Libya. That represents a shift from three months ago, just after the mission began, when approval exceeded disapproval.

The results are based on a Gallup poll conducted June 22. The House of Representatives is set to vote on resolutions that would limit the U.S. role in Libya, partly because of questions about whether the mission violates the War Powers Act since President Obama did not obtain congressional authorization for it. The U.S. sent forces to Libya in March as part of a multinational force to protect rebels in that country from attacks by Libyan President Moammar Gadhafi.

Democrats are the only political group to show more support for than opposition to the U.S. involvement. Independents are the most likely to show opposition, with a majority disapproving.

Republicans’ opinions have changed the most since March, moving to 39% approval from 57%. This likely reflects increased criticism of the mission’s legality and cost from some Republican congressional leaders and presidential candidates. Independents’ views have become slightly more negative over the last three months, while Democrats’ opinions have been largely stable.

Opposition Mainly Because of Substance, Rather Than Legality, of Military Operation

The poll sought to explore Americans’ reasons for opposition to the operation by asking those who disapprove whether they disagree with the substance of the policy or with how it was executed. Most who disapprove, 64%, do so because they do not think the U.S. should be in Libya at all. Just under a third, 29%, disapprove because they do not think the president obtained the necessary approval from Congress to conduct the operation.

Republicans who disapprove divide about equally between saying the U.S. should not be in Libya (48%) and saying the president did not go through the proper procedures (46%).

Supporters View Gadhafi Removal as Ultimate Goal

The stated goal of the military operation was to protect Libyan citizens from attacks by the country’s government, but the obvious question is whether the ultimate goal should be removal of the government, namely, President Gadhafi, from power. The poll asked those who approve of the mission whether the U.S. action should continue until Gadhafi is removed from power, and the vast majority, 85%, agree.

Implications

Gallup found initial support for the U.S. mission in Libya low compared with other recent U.S. military engagements. As the operation continues into its fourth month, and with increased criticism of the effort from political leaders, it is not surprising that support for it has eroded. It is still unclear whether Congress will ultimately limit the mission in Libya or authorize it to continue. The president’s Wednesday announcement of troop withdrawals from Afghanistan shows he is sensitive to pressure to scale down U.S. military operations abroad as the U.S. struggles to improve the economy and get the federal budget deficit under control.

Survey Methods

Results for this Gallup poll are based on telephone interviews conducted June 22, 2011, on the Gallup Daily tracking survey, with a random sample of 999 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia.

For results based on the total sample of national adults, one can say with 95% confidence that the maximum margin of sampling error is ±4 percentage points.

Interviews are conducted with respondents on landline telephones and cellular phones, with interviews conducted in Spanish for respondents who are primarily Spanish-speaking. Each sample includes a minimum quota of 400 cell phone respondents and 600 landline respondents per 1,000 national adults, with additional minimum quotas among landline respondents for gender within region. Landline telephone numbers are chosen at random among listed telephone numbers. Cell phone numbers are selected using random-digit-dial methods. Landline respondents are chosen at random within each household on the basis of which member had the most recent birthday.

Samples are weighted by gender, age, race, Hispanic ethnicity, education, region, adults in the household, and phone status (cell phone only/landline only/both, cell phone mostly, and having an unlisted landline number). Demographic weighting targets are based on the March 2010 Current Population Survey figures for the aged 18 and older non-institutionalized population living in U.S. telephone households. All reported margins of sampling error include the computed design effects for weighting and sample design.

In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.

Polls conducted entirely in one day, such as this one, are subject to additional error or bias not found in polls conducted over several days.

View methodology, full question results, and trend data.

For more details on Gallup’s polling methodology, visit www.gallup.com.