Note to Readers: Somehow I can't post this to America's Raw Story. Below is Chapter 10 from my book The Devils Marriage. I  am posting it so readers of my article, The Peoples' Capitalism, published on 6/4/2018 in OpEdNews can read the initiatives I didn't include ih that article.

Chapter 10. Ending Undemocratic Capitalism

Dialogue from the Netherworld

  Democracy requires unfettered capitalism.

---Milton Friedman (1912-2006)

  No, it’s your corpocracy that requires it.

      ---Adam Smith (1723–1790)

     I begin this chapter by imagining a dialogue “overheard” from somewhere between the putative father of capitalism, Adam Smith, and the Nobel laureate in economics and guru of free-market capitalism, Milton Friedman. The views of the two gentlemen have little in common, and I can imagine a lively debate.

     Adam Smith’s espousal of a free market has been far overblown. He made only a passing reference to “the invisible hand” in his Wealth of Nations and never once in it used the term “capitalism.”¹ A moral philosopher, he understood the importance of morality, which he believed was manifested in a person’s sympathy for others. He would have recoiled at the very idea of the corpocracy and its capitalism, for Smith thought the emerging corporations of his time posed threats emanating from their unlimited life span; unlimited size; unlimited power; and unlimited license.² Look familiar don’t they?

     While Lewis Powell issued his battle plan that led to a new regime, Milton Friedman was later to hand it a blueprint for its new economic system grounded in his free-market ideology.³ It easily won over President Reagan, dovetailing perfectly with his biases. Reagan then proceeded to let laissez-faire capitalism run amok, which is why I choose to call it “undemocratic capitalism” (and sometimes “corpocratic capitalism”).

     The previous corpocracies had their own versions of undemocratic capitalism, but the current version is vastly larger, more powerful, wealthier, more hegemonic, more harmful, and seemingly invincible. It’s very good for the corpocracy and its allies, but very bad for everyone else at home and away. Let’s look at two pieces of recent evidence at home, “Hurricane Katrina of 2005” and the “Economic Katrina of 2008” (and still continuing) and then at some evidence away from home, the borderless exploitation of both real and paper economies.

Undemocratic Capitalism at Home

Hurricane Katrina of 2005

     In her book about “disaster capitalism,” Naomi Klein quotes Friedman as saying that “only a crisis-actual or perceived-produces real change.”⁴ A disaster, in other words, was an opportunity for Friedman to apply what he called “shock treatment” to let the free market work.

     A perfect “shock lab” was provided by the Katrina hurricane disaster that devastated New Orleans in 2005 and that fell on deaf ears in the Bush administration before it gave woefully delayed and totally inadequate aid. Right-wing think tanks, however, acted more swiftly, descending like vultures onto the city bringing with them Friedman’s proposal to “radically reform the educational system” in the shocked New Orleans⁵ The Bush administration dutifully followed suit, spending millions of dollars to take public schools away from the public and give it to for-profit organizations to operate private and charter schools. The 123 public schools existing before Katrina were slashed to just four and all of the 4700 unionized teachers were fired, adding further trauma and hardship to the city and its residents. For them the idea of a “free-market” suddenly became the reality of a “fired market.” And all this to what end, a better education for school children? It’s not likely. The performance of privatized schools around the nation has been rather dismal.⁶ Privatization of public schools is just one instance of what has been called “the fox in the henhouse.”⁷ We shall return to the cancerous growth of privatization later on in this chapter. 

Undemocratic Capitalism at Home

Economic Katrina of 2008

     The economic meltdown that began in 2008 has been the greatest financial and economic disaster in the U.S. since the Great Depression. The latter doomed the regime of that era. The current regime is still thriving, however. Main Street and the overall economy, on the other hand, have been devastated. It may take years for the country to recover from this “shock-in-reverse” and even longer to assess the final toll. Drawing on countless news reports, analyses, and commentaries I have posted in Table 10 and in no particular order a premature, incomplete, and very general run down on the toll so far from Economic Katrina.

---Put Table 10 about here---

     Hurricane Katrina had been brewing for a few days or so. Economic Katrina had been brewing for two decades or so. Very few people, including some astute economists, saw it coming and those who did were ignored. And most everyone who’s analyzed the mess has offered a different explanation for it. A year later, having had more time for further analysis and reflection, The New York Times concluded that “Pretty much everyone agrees on the causes for the country’s desperate financial mess: predatory lenders, weak regulations, even weaker regulators, and risky nigh unto incomprehensible financial instruments.”⁸ The latter were like bets in a high-stakes game no one truly understood and that could never have been played had the Clinton administration and Congress not repealed the law prohibiting banks from becoming casinos. One of the best accounts I’ve read, incidentally, on how that repeal turned banks into casinos is to be found in one of my favorite periodicals, The American Scholar, and was written by a law professor, William J. Quirk.⁹ There’s nothing “quirky” about his analysis.

     I pretty much agree with the Times overall postmortem except some factors were overlooked. My own postmortem tells me the meltdown was caused by a conflation of factors that included: casino banks, Friedman’s free-market ideology; a hands-off government; predatory lenders; gullible borrowers; the repackaging and selling of shaky loans as securities; the heady times of easy money and overspending; and incredible booty (astronomical salaries/bonuses) for the masterminds and deal makers on Wall Street even as Main Street was going broke.

Exploitative Globalization

 

     Globalization is very controversial, meaning different things to different people and affecting them differently. In its simplest sense, globalization means the economic presence of and financial imprint on other countries by another country’s policies and agents. Globalization is controversial because of its imprints. Some claim their net effect is positive, some say negative. But it is all negatively exploitative when the corpocracy extends its hegemony offshore.

    America’s corpocracy respects no borders and never has, starting with the first regime and the Banana Wars. Since then the globe has become a giant badvantage, an oversized opportunity for commercial exploitation. With the entrance of Reagan, his pal the Brit Margaret Thatcher, and with Friedman in tow, exploitative globalization by the U.S. corpocracy spread like an epidemic.

The “Unholy Trinity”

  

     This well-deserved nickname refers to the International Monetary Fund (IMF), the World Bank (WB), and the World Trade Organization (WTO).¹⁰ They became the primary enabler of the corpocracy’s global hegemony and in effect have made “American firms de facto agents of foreign policy.”¹¹

     The trios’ purpose ostensibly from the beginning has been to reduce poverty and to develop the economies of Third World countries. In reality the aim of its work has been totally different, very “unholy.” Huge amounts of money masquerading as developmental loans and contingent on the currency devaluation and paring of the borrowing country’s social programs are siphoned off to huge, transnational corporations, many of which are U.S. firms, and the pockets of the governing and power elite of the country. The country goes further into debt and becomes even more vulnerable to being further exploited, including being subjected to sham debt relief programs.

     No matter where on the globe the exploitation takes place there is a similar pattern of corporate behavior involved that includes such despicable, inhumane practices as relying on militaries and militias to purchase commodities made by forced labor; using armed groups to protect corporate assets; supplying arms to rebel and government forces; actually participating in military actions; engaging in smuggling, money laundering, and illegal currency transactions; and sweat-shop production of goods.

     Needless to say, no transnational corporation, no totalitarian regime, no quasigovernmental agency inside or outside the Unholy Trinity will own up to such practices. They “can’t admit,” says a very knowledgeable authority on the subject, that “it is human rights violations that make ... countries attractive to business -- so history has to be fudged, including denial of our support of regimes of terror and the practices that provide favorable climates of investment, and our destabilization of democracies that [don't] meet [the] standard of service to the transnational corporation...."¹²  I liken exploitative globalization by the U.S. corporacy as taking economically impoverished and starving countries on a death march.

Global Exploitation of Paper Economies

     Borderless transactions in paper, or currency, have now vastly overshadowed borderless transactions in goods, services, and commodities. With today’s electronic technology, trading in foreign currencies can and do occur around the clock. This size and speed create a golden opportunity for currency speculation.

     Currency speculators are domestic or foreign depending on their origin. They can throw their own or another country already struggling economically into an even deeper crisis from the resulting currency devaluation. I don’t know if speculators who cause their own country’s economy to collapse have ever been called “economic traitors,” equivalent to “economic hit men” who exploit foreign countries, but the analogy seems to fit.¹³

     The influence of Milton Friedman and the Unholy Trinity can also be seen in foreign currency speculation. He had argued against government efforts to stop currency speculation, contending that speculators ultimately help stabilize the economy and to allow people to hedge their bets in the trading of currencies.¹⁴ Consistent with Freidman’s free-market philosophy, the IMF opposes government intervention in response to currency devaluation from speculation. The theory and advice, however, fly in the face of a globe full of evidence to the contrary.

     Most if not all Asian countries, Brazil, England, Indonesia, Mexico, Scandinavia, South Korea and South Africa have each suffered devastating financial crises from currency speculation. Take Malaysia in 1997, for instance. Its prime minister at the time, Dr. Mahathir Mohammed, was so outraged that he wanted “currency trading to be made illegal!”¹⁵ One country at least, China, has done just that and with finality by making currency speculation a capital offense punishable by death (at the same time, though, she is acting like a rogue state when she deliberately exports undervalued goods).

Setting the Stage for True Economic Reform

     We are not Malaysia or China. Neither the Wall Street bankers who were the primary instigators of Economic Katrina nor the politicians who enabled it were executed or held accountable at all. Bankers, moreover, have been getting multi-billion dollar bail outs from the politicians and taking part of the hand-out as bonuses to themselves.

     Until the regime is ended there can be no true economic reform, only band aid patching, and another economic crisis even worse is sure to be just around the corner.¹⁶ Lobbyists have been swarming all over legislative deliberations on financial reform, and we can expect only cosmetic changes at best by the current administration’s economic team. Its members mostly came through the revolving doors from Wall Street, were very cozy with it, and had a hand in shaping the very policies that enabled the crisis. The legendary Paul Volcker, economist, former Chairman of the Federal Reserve under Presidents Carter and Reagan, and Chairman of President Obama’s Economic Advisory Board, gives legislative reforms a B- grade and observes that “There is a certain circularity in all this business. You have a crisis, followed by some kind of reform, for better or worse, and things go well for a while, and then you have another crisis.”¹⁷ In other words Chairman Volcker, we will be revisited by a third great depression on down the decade some day. Is that essentially what you are telling us?

     If progress were being made in unleashing democracy power in some form or other against other elements of the corpocracy, it would be a good time to set the stage for achieving true economic reform. Let’s assume there has been a taskforce commissioned by some nongovernmental group and charged with polling the opinions of middle class Americans, the socioeconomic group absolutely essential to any true democracy and viable economy, and then melding the solicited public opinion with the taskforce’s a) consideration of new ways of thinking about capitalism; b) enunciation of a proposed new national economic policy; c) design of a new form of capitalism that I’ll call simply “democratic capitalism,” d) proposed objectives and initiatives to implement the design, and e) report on the findings and recommendations to the administration, to the Congress, and to the American people.

     There should be no economists on the taskforce who were blindsided by Economic Katrina, who nourished it with their free-market ideology, or who are still in the dark and disagreement.  As recently as late Summer 2010 economist Thomas Friedman was saying that after talking to senior economic policy makers he came away concluding that “things are getting better, except where they aren’t. The bailouts are working, except where they’re not. Things will slowly get better, unless they slowly get worse. We should know soon, unless we don’t.¹⁸ Who needs their advice? Instead, members should include some prominent and innovative thinkers about the reform of capitalism but who aren’t economists. I have identified some who, based on their writings, ought to be invited (Aristotle in absentia).

     In Appendix C I have abstracted some of their writings and will be drawing upon them in presenting nine broad objectives and a host of more specific initiatives to create a democratic capitalism. The nine are these.

                                   

                                                End free market ballyhoo.

                                                End fear mongering over national debt.

                                                End privatization.

                                                End economic disparities and poverty.

                                                End shut-out capitalists.

                                                End financial speculation.

                                                End exploitative globalization.

                                                End unsustainable development.

                                                End elitist pay without performance.

End Free Market Ballyhoo

Tea Party Patriots, Inc. ("TPP") is a non-partisan,

non-profit social welfare organization dedicated to

furthering the common good and general welfare

of the people of the United States. TPP furthers

this goal by educating the public and promoting

the principles of fiscal responsibility, constitutionally

 limited government and

                        free markets.

                                                                        ---www.teapartypatriots.org.

     The proof is already in the flattened pudding that free-market theory is utterly unworkable, destructive, and a hypocritical ploy by the regime. As author Thom Hartmann has noted, “one of the most pernicious claims the ‘coporatocracy’ (his term) makes is that business flourishes best in a perfectly ‘free’ market---so all of society does better.”¹⁹ Proponents of a free market theory have for decades pointed to productivity gains and wage increases as confirmation of their arguments for deregulation and a swift transition from the manufacturing to the service sector, yet the productivity gains are “grossly overstated” because of the unmeasured effect of outsourcing, wages have been falling, not rising, and a resurgence of manufacturing would help, not hurt the economy.²⁰ Their arguments, moreover, have been further if not totally repudiated by Economic Katrina.

     The so-called Chicago School of Economics, where Friedman once held forth, is hugely responsible for extolling the virtues of the free-market. And it is especially noteworthy and satisfying to learn that another influential member of that camp, lawyer and economics writer Judge Richard A. Posner, has since turned heretic and is now debunking the free-market ideology.²¹ He should be the honorary chair of the task force, and it should include in its proposed national economic policy a denouncement of free-market theory! The policy also needs to delineate government’s proper obligations and role both in society and in its market place so as to strike a balance between total government rule on the one hand and total market rule on the other (recall Abraham Lincoln’s view of the proper goal of government mentioned in the first chapter).

Notice

to

Tea Party and other Free Marketeers

What you really should want

is a

Corpocracy-Free Market

End Fear Mongering Over the National Debt

     In one of his many insightful columns Paul Krugman writes that fear mongering over the national debt may prove to be as destructive as was fear mongering over weapons of mass destruction (WMD) the Bush Administration relied on to justify bombing Bagdad and starting the war against the relatively defenseless Iraqi government and its military. Just as the WMD were never found so too says Krugman has no evidence been found that proves the fearful claim by politicians, cons, and others that the national debt destabilizes our economy as well as jeopardizes its recovery and weakens our influence internationally. The reason the unfounded claims could prove destructive in the short term is that they create a pressure for reductions in federal spending that would actually worsen the current socioeconomic situation.²²  

     As I see it there is good national debt and there is bad national debt. Good debt means enough federal spending on programs to help meet real economic and social needs such as more employment, better education, and better and affordable health care that once better met will require far less government spending in the future, by then only maintenance spending in contrast to remedial spending. Bad debt means going into the red from unreasonably and unfairly low taxing of the wealthy; from more rather than less corporate welfare, especially warfare welfare; and federal spending on initiatives our society doesn’t really need, actually suffers from it, and shouldn’t be burdened by them.     

     National debt is a political and socioeconomic phenomenon. When President Clinton left office there had been no federal deficit for three years and surpluses were expected to continue for a decade longer. President Bush’s policies, on the other hand, created massive bad debt. His policies were to overspend on the wrong initiatives and charge the wealthy even less for expenses.²³ Both presidents in their policies contributed in no small measure to Economic Katrina, and attempts to recover from it simply inflated the debt (not all of the economic stimulus spending in my opinion was bad debt). Today, the national debt seems to be around $13 trillion. Meanwhile, the social needs of the country have been festering from underfunding of education, health care, and employment programs, the very needs that had they been attended to would have, as I said, resulted in good and shorter term debt.   

     The task force needs to examine federal spending levels under varying political, economic, and social conditions and propose some kind of a gauge for determining what would be the appropriate deficit levels in the short and long term under the various conditions, including a good estimate of what would be a realistic defense budget (see previous chapter). It should also spell out the implications of its proposals for the rest of the strategic objectives and initiatives to end the corpocracy. 

End Privatization

     Rabid government haters and corporate purveyors of privatization argue that business can do much better than government in providing public services and meeting public needs in general. Not so! Michael Edwards, activist and author, explains in his book Small Change that the inherent nature of business with its profit-seeking motive and its short-term perspective and demands makes business unable to come even close to solving hardcore problems like poverty, epidemics, war, social discord, and the like.²⁴ I would simply add this question: How many business firms, large or small, can you name that are making significant inroads on such problems?      

     Yet the public sector is increasingly being taken over by the private sector. Privatization, argue Si Kahn and Elizabeth Minnich, co-authors of The Fox in the Henhouse is the private sector’s way to “undercut, limit, shrink, or outright take over any government and any part of the public sector that stands in the way of corporate pursuit of ever larger profits and could be run for profit.”²⁵ I’ve already cited the example of public schools being privatized in New Orleans (the cons want all public schools to fail). Consider another example beginning as a riddle: What a) sorts mail but is not the USPS, b) cuts Social Security checks but is not the SSA, c) counts the census but is not the Bureau of the Census, d) monitors air traffic but is not the FAA, and e) runs space flights but is not NASA? Give up? It is Lockheed Martin, the largest military contractor in the U.S. This company is just one of several examples the two writers give of privatization.²⁶ Or consider the privatization of airport security by the government allowing the airlines to provide it and on the cheap. Paul Krugman has controversially speculated that the cheaper security made the terrorists’ catastrophic September 11, 2001 high jacking of the passenger jets easier.²⁷

     Take any industry and any common property, such as airwaves for example, and they have been privatized, usually more so than less. Corporations with exceptions don’t actually steal public property. It’s usually gifts in the dowry from government. Taking these gifts back, needless to say, won’t be child’s play, but it ought to be a high priority of any broad-scale offensive to reclaim our democracy and regain fuller control over our common goods and how we chose to satisfy our common needs.

     Taking them back totally, as in the nationalization of industries, would be a draconian and politically suicidal step. Nevertheless the task force should strongly advocate nationalizing certain public-sensitive industries such as the defense industry, the energy industry, the financial services industry, and the health care industry.

     Regarding this last industry, Thom Hartman makes some cogent points. If health care is a privilege, then privatization by the health care industry is not a national and human offense. But if it is a right, as it is in most developed countries, then letting profit takers takeover is a blatant denial of a right to which each citizen is entitled upon birth. Hartman notes that even communist China provides health care for its people.²⁸ But the corpocracy easily thwarted the single-payer or national health insurance option during the rancorous and seemingly interminable health care reform debate of 2009 and into early 2010. This option would have barred the health care insurance industry from the trough. As it now stands, the new reform law will be a big boon to this industry and the pharmaceutical industry. “Anything less than national health insurance is voodoo” says an NGO advocating for national health insurance.²⁹

     Keeping or taking back public sector services only partially does not seem to work well. Profit seeking thwarts rendering better and cheaper services to the public. The federal partnership with the insurance industry in proving flood insurance is a case in point. Government bears all the risk and the insurance companies get all the revenue.³⁰ The insured get flooded with debt.

     The task force should explore all proposals for reversing privatization. These include: Barne’s proposal (see Appendix C) that the government assign common property rights to institutions, distinct from government and from corporations, and that would be set up as trusts to manage the common property; Hartmann’s mostly politically oriented initiatives (see Appendix C); Terry’s proposal for a “Nation of Owners,” (see Appendix C); litigation such as relying on the Commerce Clause of the U.S. Constitution to rebuff in court further privatization efforts; and educating and mobilizing the public against privatization.

End Economic Disparities and Poverty

     The late Justice Louis Brandeis said, “We can have a democracy or we can have great wealth in the hands of the few. We cannot have both.” And we don’t. We don’t have a genuine democracy but we do have great and sometimes vulgar (i.e., ill begotten) wealth in the hands of one percent of Americans who possess nearly forty percent of all wealth in the nation.³¹ And at the opposite end of the socioeconomic spectrum, in 2007 there were 37.3 million people living in poverty, or 12.5 percent of the U.S. population, and a bleak prospect of most Americans at some point in their life falling into poverty.³² More poverty-stricken people live in America than in any other developed country.

     The glaring and inexcusable gap between our own haves and have not’s is sensed by the silent majority, as silent, submissive, and inattentive to all the other telltale signs as they may be. In a 2009 poll nearly one-half of them reported being disturbed over the gap between the rich and the poor in the U.S.³³ That slightly more than one-half aren’t conscience-stricken must be good news to the dividing and conquering regime.

     The mighty U.S. has spent trillions to develop the most sophisticated weapons but not for the decades-old war on poverty. When it comes to this war the U.S. is an undeveloped nation that has made mostly minimal, token, and begrudging efforts toward meeting Article 25 of the 1948 United Nation’s Declaration of Universal Human Rights in which everyone on earth is declared to have the right to an adequate standard of living.

     A granted but unfulfilled right may be worse than no right at all. It certainly is a breech of universal values and an overflowing wrong. Article 25 ought to be made an economic policy goal that should also seek the end of poverty and a start toward a shared prosperity and property ownership for all Americans as Jeff Gates has proposed (see Appendix C). It’s a lofty goal even without the current economic crisis, but a goal that may be reachable if the current crisis ever subsides. As President Obama said in his inaugural address, “We remain the most prosperous, powerful nation on Earth.” But, Mr. President, the prosperity has been monopolized and the power has been abused.

     Along with this policy goal the task force ought to propose a national definition and declaration of the meaning of wealth in a true democracy. The definition might be along the lines of Peter Barnes’ “common wealth,” Rianne Eisler’s “the real wealth of a nation,” or Dana Zohar and Ian Marshall’s “wealth we can live by” (see Appendix C). Accompanying the policy goal ought to be at least seven objectives for reducing economic disparities and ending poverty: end rationalizations for the status quo; the fair sharing of democracy’s cost; reducing joblessness to the greatest extent feasible; increasing wages; reducing the costs of daily living; the upgrading of American education, and the creation of a Made-in-America Campaign.     

End Rationalizations for the Status Quo

  

     Two tiresome rationalizations of economic disparity and poverty need to be put to rest. One is the argument of trickle-down economics. The second is the mean-spirited argument that the poor get what they deserve. In the face of enormous economic inequities and social injustice these knee-jerk responses of the regime and its allies are pathetic and immoral.

     To rationalize its own excesses, including its hand outs from the government, corpocratic capitalism spouts the theory of trickle down economics. In reality, the excesses gush upwards. What small residual trickles down stops at the back door of the middle class, never going down farther to “the projects,” a euphemism for public housing where the poorest of poor who aren’t homeless live in dangerous and fetid conditions.

     The other argument is that poverty is self-imposed by overspending and sloth. It’s true we have a consumptive society stoked by corporate interests (some seventy percent of our economy is consumptive), but most Americans living below the poverty line don’t fall there because of their own failings. Recall my reference in the first chapter to the findings of Mark Rank, the professor of social welfare, who contends persuasively I think that economic and political factors, not any personal shortcomings of individuals account for the appalling level of poverty in America (Professor Rank in his book makes numerous proposals for ways to reduce the poverty level).³⁴  I have concluded from my own research of the literature that people in poverty are there because of one or more of four mostly circumstantial factors: joblessness, “dead wages” (those that don’t qualify as “living wages”); the expensive cost of daily living; and poor education. All four are recipes for snuffed drive and sloth. All four are situational factors, not personal factors, and belie the belief held by many Americans, especially the cons, that being poor is the result of personal irresponsibility.³⁵   

Share Democracy’s Cost Fairly 

     Justice Oliver Wendell Holmes once said something very wise, very humane, very patriotic, and very practical. He said, “I like paying taxes. With them I buy civilization.” Democracy is precious and worth the cost, yet many wealthy individuals and many corporations don’t pay their fare share of it.

     The task force needs to consider any and all good ideas on how to achieve fair-share taxation, including Barnes’ proposals for common tax credits (see Appendix C). Just as importantly. the task force needs to peer through the regime’s veil and do a “tax-escape” audit” of all forms of corporate welfare, including tax havens, tax cuts for the filthy rich, etc.³⁶ While this exercise is being done, a poll needs to be taken of middle-class Americans asking them what they think would need to be done to protect and promote the general welfare of all Americans (e.g., taxing everyone fairly, providing all Americans with affordable housing, a job paying no less than a living wage or guaranteed unemployment insurance at the same level until a job is gotten, security from an America at peace with the world, etc, etc). Next, an analysis would be made to estimate how much it would cost to meet each of these needs and how they could be met if there were fair taxation; that is, without any corporate welfare. Finally, another poll would be conducted, telling people about the findings and asking them if they would be willing to apply their democracy power to end corporate welfare for the sake of the general welfare.

Move toward “Full” Employment

  

     Over 40 years ago the Full Employment and Balanced Growth Act was passed. It was an abject failure.³⁷ The Great Society’s “War on Poverty” clashed with the country’s real war at the time and never recovered. The Act could never have achieved full employment in any case and was more a symbolic gesture. Full employment of employable people, of course, is an unreachable goal. People will always outnumber available jobs, and continuing technological “progress” means more outputs with still fewer people inputs. So there will always be the need for a strong social welfare program, including possibly some kind of more or less open-ended unemployment benefits, which will never happen with the current regime that deliberately allows benefits for hundreds of thousands of the unemployed to expire because offsetting spending cuts aren’t made.

     While full employment is unrealistic, economist Paul Schiller nevertheless asserted, unbelievably right in the midst of Economic Katrina, that such a goal, with interim lesser targets and supported by new fiscal and monetary policies might at least shore up public confidence in the economy and lead to more employment.³⁸ I would suggest instead a different goal, that of an “acceptable unemployment level,” and define it as that level reached only after all conceivable and realistically possible employment measures have been effectively applied to create new jobs and to save existing ones.

     The most fertile source for creating new jobs is the small business sector. It has far more firms and is far more innovative than behemoth corporations. Unfortunately, only a miniscule portion of the administration’s stimulus plan of 2009 was allocated to reinvigorating this sector.³⁹ Whatever the allocation, larger or smaller, it should not be funneled through the federal Small Business Administration. It ought to be abolished or totally reformed. Only a tiny slice of the small business sector ever gets loans from this agency.⁴⁰ Instead, the two NGOs, American Independent Business Alliance (AMIBA), and Business Alliance for Local Living Economics (BALLE), are the ideal NGOs to spearhead, with support from other NGOs and through prodding of the administration, the creation of new jobs in the small business sector. As part of this overall initiative, there ought to be a program for creating paid apprenticeships with small businesses.

     Another fertile source for creating new jobs is government itself. Serious consideration ought to be given to resurrecting the public work relief programs of the Works Progress Administration and the Civilian Conservation Corps established in response to the first Great Depression in the 1930s. Millions of Americans were employed not on make-work projects but in much needed work such as highway and building construction, slum clearance, reforestation, and rural rehabilitation. Some 70 plus years later there is just as great a need for similar public works projects. There surely ought to be a job in Obama’s “most prosperous” America for any able-bodied person.

     There are other initiatives the task force ought to consider for lowering unemployment to an acceptable level. They include forbidding job outsourcing and company relocations to other countries; employment tax credits and job-sharing incentives (two positive forms of corporate subsidy); and compensation for household care givers and volunteer workers that would probably pay many times over in a more educated work force, in reduced health care costs, and in reduced social welfare costs. This last initiative is drawn from the ideas of Aristotle and Eisler (see Appendix C). If Aristotle’s view of the economy as household management and Eisler’s notion of the household economy and its productive value were to be explicitly and officially recognized as a contributor to the GDP, then millions of otherwise officially “unemployed” would need to be treated as gainfully employed and ought to be compensated in some way by the government.

     One conclusion is crystal clear. Even a more modest employment goal is doomed to fail unless the regime is upended and its allies quieted. They will block every employment initiative the government may get the nerve to muster. They will trot out their tiresome and thoroughly repudiated dual arguments that by letting the free market work the economy will grow and create new jobs and secondly that spending more federal dollars on employment programs will raise the federal deficit. I can’t repeat enough times. The free market theory is just that, theory, and it’s all bunkum. The GDP and stock market are up from the depths of Economic Katrina and yet the unemployment rate has soared. As for all the shortsighted and mean-spirited fear mongering over the federal deficit, there are far worse deficits in our social fabric and they have been caused in no small part by an unacceptable unemployment level. They are the deficits of increased poverty; increased crime; increased illnesses; broken families; loss of self-esteem; and increased social restlessness and unease.   

Increase Wages

  

     In the opinion of the Clinton administration’s labor chief, “the only way to keep the economy going over the long run is to increase the wages of the bottom two-thirds of Americans.”⁴¹ He said that, by the way, after having been in the administration whose signing of the NAFTA and GATT trade agreements for the benefit of the corpocracy caused Americans’ wages to go into a “free fall.”⁴²

     The national minimum wage law is based on a minimum level of consumption, has been on the books since the late 30”s, and has become a farce. It falls short of a wage a middle class family actually needs to live not luxuriously, just worry-free of being able to meet reasonable needs. Many states’ laws consequently have set a higher minimum, and several jurisdictions have established local policies requiring still higher so-called living wages. But they are “just a starting point,” claims Thom Hartmann, because “even people making a ‘living’ wage often must work two jobs.”⁴³

     The argument that raising wages raises unemployment is false, Hartmann claims, and notes that “every time the minimum wage gets raised, employment goes up.”⁴⁴ Corporations don’t want to concede that raising wages lower profits, not employment. 

     Corpocractic capitalism offers “dead” wages, not living wages, mostly by emasculating the bargaining power of labor unions. For any wage earner nowadays to keep up with inflation isn’t like running on a treadmill, it’s like running on two of them at once. Moreover, many low-wage earners aren’t paid even the minimum wage to which they are entitled, are denied overtime pay, and are dissuaded from filing worker compensation claims.⁴⁵

     Anyone who needs work ought to get work and be fairly compensated for it. The task force should consult with jurisdictions about what lessons were learned in requiring a living wage. Consideration could also be given to proposing a nationwide living wage and offsetting the costs to employers possibly through tax credits adjusted by the financial health of the employers.

Reduce the Costs of Daily Living

     So much personal wealth owned by so few helps to drive up the cost of daily living simply because the wealthy can afford to pay more for goods and services. A major cause of indebtedness, Professor Howard Karger contends in his book, Shortchanged, is due to “the high cost of living in a privatized society,” not to “over consumption.” He notes that the rising cost of necessities now amounts to 75% of a family’s two-person income, leaving little left for luxuries for the “functionally poor.”⁴⁶

     One of life’s necessities is getting affordable preventive and therapeutic health care, the latter especially for acute and chronic medical conditions. When these conditions afflict the functionally poor and the uninsured in general more misery is simply heaped on misery. While the new health care reform law of 2010 (written by lobbyists) will extend insurance coverage it does not provide universal coverage and traps many people already covered in costly state-run high-risk plans. Moreover, there will probably be endless legal battles contesting the new law’s implementation.

     Ralph Nader, in his July 16, 2010 Nader Alert e-mail to me pointed out that Iran has a much better health care system than in the impoverished parts of our own country. This sad state of affairs is morally repulsive. It is also economically insane. A healthy people in the long run help, not hurt the national economy, and trying to stay or get healthy can overwhelm ordinary household budgets. I recently read a letter to the editor of The New Yorker in which the writer raised a very insightful question that had never occurred to me. “Could it be,” the writer asked, “that unaffordable health care is the ultimate cause of the recession” (i.e., Economic Katrina)?⁴⁷ That is, earning power may have shrunk at least partly because health care costs spiraled, leaving wage earners to turn to mortgaging their homes far beyond their value once the bubble burst. 

     Affordable and decent housing is one of life’s necessities and is becoming increasingly less available, especially, Professor Rank notes, among low-income households. To reverse that trend he proposes establishing a national housing trust fund with budgetary sensitive ways to pay for it (e.g., end federal subsidies of mortgages on million dollar and up homes), expanding and using more effectively the government’s housing voucher program, providing refundable housing tax credits for low-income homeowners and renters, and enforcing fair-housing laws.⁴⁸

     The last two necessities I’ll mention briefly here are the need among low-income families and single-parent households for affordable and decent child care and child support. All children, not just those in affluent households, are America’s future for better or worse. It behooves America on economic and moral grounds to ensure that the general welfare of needy children is not neglected. America is failing that obligation miserably. Many day care centers are of poor quality, even good centers may offer only partial-day care, and many single custodial parents do not get the child support payments ordered by the courts. I will refer the reader to Professor Rank’s book where he addresses these problems and proposes a number of solutions.⁴⁹

  

Move toward a Quality American Education

     Yet another factor linked to poverty is poor education. America is currently producing high school drop-outs “at an average of one every 26 seconds.”⁵⁰ Nearly one-third of America’s youth entering high school never graduate. A blue-ribbon commission’s searing indictment of America’s educational system more than 25 years ago spawned a flurry of educational reforms, yet the same report, says a prominent educator, could be written today because our educational system still is “in turmoil.”⁵¹ Getting a poor education hits hardest those who need quality education the most, children from families in the lowest socioeconomic ranks. A recent study of the academic performance of children across the entire socioeconomic and minority group spectrum found a gap in the quality of education these children are getting so gaping that it will take more than a century to close if ever.⁵² And remember those civic clueless high school students.

     It’s beyond the scope here to propose an array of new educational reform initiatives. Even so, education can’t be disconnected from our economy or our current economic system. One shouldn’t be reformed without reforming the other also. A good starting point for thinking about interconnected reforms I think is to remember Riane Eisler’s views on what the real wealth of nations really is all about, on the basic purpose of an economic system, and on the need for massive investment in child care and human development (see Appendix C).

Create a Made-in-America Campaign

     I proposed this idea without explaining it in the previous chapter. I will explain it now. Suppose that we lived in a corpocracy-free America. All non-military corporate welfare would thus have been eliminated. There would also be no warfare welfare, only a realistic defense budget and no more warring. What could we do with all of the billions or trillions of dollars saved? Besides spending directly on the objectives already mentioned for ending economic disparity and poverty, we could create a Made-in-American Campaign to reduce America’s humongous trade deficit by making in America the products and services we are now buying from other countries. The task force would need to identify what all of those items are and what would be needed in the way of capital, labor, and material to make those items here at home. The resources and production would be funded from the money no longer misspent by the former corpocracy. This kind of business subsidy would be truly beneficial. The dual draft system would supply some of the labor needed and the available, unemployed labor pool would supply the rest. I know the idea sounds fanciful, but as I like to say, anything conceivable may be possible. 

End Shut-Out Capitalists

     So much capitalism, so few capitalists! Democratic capitalism would put an end to that.  Gates (see Appendix C) has proposed many specific initiatives besides his six strategic proposals for infusing more capitalists into capitalism. They include government contracts to encourage employee stock ownership plans (ESOPs); strategic government purchases from firms with certifiably broad-based ownership; strategic government licensing; converting private access to public access of natural resources; employee ownership of public services such as snail mail; the favoring of more inclusively owned firms that seek trade assistance; government loans to business firms contingent on their more inclusive ownership; orienting development banks to businesses with more participatory ownership; a robust antitrust policy; strategic public pension plan investments; exploiting a variety of government subsidies (the good kind of subsidies that don’t constitute corporate welfare); and changing a variety of tax policies to create more capitalists.

     Gate’s proposed initiative to further ESOPs ought to be debated before any decision to move forward on it is made. They have been an upside-down incentive for management and might turn out to be so for employees. They are often merely a means for employers to benefit from extra tax credits. And usually they are not accompanied by empowerment of workers to become more involved in important business decisions. On the other hand, the one major advantage of ESOPs, if the disadvantages can be eliminated, is that if employees own a majority of the stock they are the company’s primary owners with controlling power over the business.    

     Yet another path to shared capitalism would be to pursue policies that extend the whole range of stakeholder ownership in enterprises. As Korten explains, “stakeholder ownership involves placing the rights and powers of ownership of productive assets in the hands of people who have more than just a financial interest or stake in their long-term viability.”⁵³ These people include, besides workers, suppliers, customers, and residents of the communities where the enterprises are located.

     Majority employee-owned U.S. companies are probably the most prevalent of non-traditional ownership. They number in the thousands, have “at least 50% of their stock owned by an ESOP, a stock purchase plan in which most full-time employees can participate, a profit sharing plan or other trust, or some combination of such plans.”⁵⁴ Other stakeholder ownership patterns include a variety of cooperatives such as consumer co-ops.    

    The major drawback to stakeholder ownership of publicly held corporations is that only stakeholders who own shares in the firm have the power, as weak as it often is, to influence their representatives, the members of the board of directors. This may seem appropriate on the surface since shareholders invest their money in the firm, but they don’t directly affect the success of the firm, unlike workers who do its work, unlike suppliers who supply it, unlike customers who buy from it, and unlike communities that provide public services necessary for it to exist.⁵⁵

 End Financial Speculation at Home and Away

 

     Aristotle (see Appendix C) had a disparaging view of making money from money, the pure and simple aim of financial speculation, financial manipulation, and outright financial fraud. It creates, to paraphrase him, an “unnatural” wealth. To quote me, it creates all too often vulgar wealth. Financial speculation, including commodities speculation needs to be outlawed.

     If I understand Roger Terry correctly (see Appendix C), he would eliminate the very need of Wall Street. Not a bad idea if only we could get away with it. But we would have to go beyond Wall Street in New York City. Its dominance is being eroded not only by foreign currency speculation but also by the sprouting of private marketplaces here and there, some so clandestine as to be “all but invisible, even to regulators.”⁵⁶

    A strategy that makes sense to me would be to phase out over time the stock market wherever it operates while somehow protecting long-term investors until the process is completed. My reasoning is this. First, much of the stock market is a cesspool of investments in socially irresponsible corporations. Second, there just aren’t that many socially responsible corporations beyond their window dressing in which to invest. Third, those corporations that invest only for making money rather than for product and service improvements are no longer truly useful or necessary for the real marketplace of goods and services. Fourth, start-ups can go to banks rather than through initial public offerings.

     David Korten (see Appendix C) would severely curtail Wall Street’s scope. He starts with this observation, “money is a useful medium of exchange except in the hands of speculators where it becomes an anti-democratic, anti-market instrument of instability and unjust extraction.”⁵⁷ He then goes on to propose these particular initiatives for neutering Wall Street: prohibit banks from financing speculators; substantially tax short-term capital gains (why not heavily tax gains from all stock market investments?); encourage use of local currencies; make creating new money a public function, not one of bank loaning; charge fees for holding any financial assets; reinvigorate community banking; prohibit the use of financial assets as collateral for borrowing; and prohibit foreign currency speculation.⁵⁸

     A big tail, the banks, in America, is wagging a bigger dog, the financial industry and Washington. The tail needs to be cut into smaller pieces. Or they need to be nationalized, putting Washington in control of them. This, the New York Times editorialized would be “the least bad solution to a truly desperate situation.”⁵⁹ Such a proposal would meet an avalanche of protests. Among them would be the argument that government doesn’t know how to run banks. That argument doesn’t wash. Government runs the nation’s central banking system (i.e., Federal Reserve), FDIC, and much more. Some 100 private banks, in contrast, have recently run themselves into the ground, and another 400 and counting are on the brink of nose diving.⁶⁰

     Needless to say it might be easier to move a mountain than to create a democratic capitalism without financial speculation or with a diminished and regulated version of it. Wall Street owns a big chunk of Washington, not the other way around despite the huge taxpayer funded bailouts. An exasperated Senator Dick Durbin, perhaps I should call him a misfit in the circus, complained that the banks “are still the most powerful lobby on Capitol Hill. And they frankly own the place."⁶¹ And that ownership seems to be inhibiting any bold Wall Street reforms President Obama might otherwise implement. His proposal to overhaul the financial regulatory system, says one commentator, “is little more than an attempt to stick some new regulatory fingers into a very leaky financial dam rather than rebuild the dam itself,” and the new rules that finally emerged validate the commentator’s assessment; the rules were given as I said a B- grade by Paul Volcker, and have been found wanting by numerous other knowledgeable authorities.⁶² Paul Krugman, who has been tracking the progress of the rulemaking, adds that the Obama administration “still seems to operate on the principle that what’s good for Wall Street is good for America.”⁶³ Since lobbyists haven’t been banned and the revolving doors and archways haven’t been blocked yet, why should we expect anything differently?

     Despite the seeming implausibility of any meaningful reform, the task force should propose that America go after Wall Street for the sake of Main Street by considering ideas such as those of Korten and Terry and maybe suggesting an outlier like Durbin to lead the charge. A capitalism that allows financial investments is one thing, a capitalism that allows financial speculation amounting to reckless gambling and “rational irrationality” is quite another.⁶⁴ 

End Exploitative Globalization

     The task force should consider several specific initiatives to end exploitative globalization: abolishing the Unholy Trinity; repealing international trade agreements; ganging up on the globalizers; starting anew globally; and pursuing greater localization.

Abolish the Unholy Trinity

     Anti-globalization activists and authors John Cavanagh and Jerry Mander argue that reforming the WTO, the WBO and the IMF rather than abolishing them is not a good option. They are, the authors say, “so fundamentally at odds with the human interest.”⁶⁵ Whether these institutions are ended through whatever a decommissioning process might entail or by the U.S. officially announcing its withdrawal of membership and funding will be immaterial as long as they are ended. 

     Litigation against the WTO is another course of action, although the WTO prevails whenever trade disputes filed by the U.S. are settled in court.⁶⁶As far as I know there has yet to be brought before the highest court a constitutional challenge to the WTO’s overruling of the U.S. 

Repeal Existing Trade Agreements

     Getting rid of the WTO won’t get rid of existing international trade agreements. Other than ruling on disputes that arise, it’s unlikely the judiciary will entertain legal attacks on the legitimacy of the agreements as legally binding contracts, although I suppose it’s possible the International Trade Commission, a quasi-judicial Federal agency, could be sued for yielding to the WTO. Another option is legislative action. U.S. trade agreements are ratified by Congress and will have to be repealed by Congress. To that end a few petitions have been written but are languishing, probably because the petitioners are individuals acting alone or are members of small NGOs. What are needed are petitions with tens of thousands of signatures.   

     What are needed also are enforceable rules for a just and sustainable international trade and finance system. Cavanagh and Mander propose four essential rules: 1. All people in any country must have the right to determine their country’s economic priorities and policies while at the same time not infringing on the rights of people in other countries. 2. There must be “balanced trade” among trading countries. 3. There must be “fair commodity prices,” no domestic subsidies, price supports, no “dumping” with lower prices. 4. There must be no restrictions on intellectual property rights other than those that would stimulate innovation and creativity.⁶⁷

Gang Up on the Globalizers!

     There are many NGOs in the U.S. fighting exploitative globalization. But there aren’t 10,000 of them. Representatives of 10,000 NGOs from 82 countries organized an international coalition calling for the European Union to ensure effective participation of the poorest countries in considering reforms of international financial institutions such as the WBO and the IMF.⁶⁸ Let me repeat that number, 10,000 NGOs! Visualize representatives from over 10,000 NGOs protesting in front of the U.S. Capital, at 1600 Pennsylvania Avenue, at the CIA, at the Pentagon, at the USCC, at corporations, especially ones in the defense industry, and on Wall Street. If that mobilization were to materialize en force as something like an International Democracy Power Force, what do you think might happen? The corpocracy might bloody some of the protestors but it might also be the beginning of the breakup of the Devil’s Marriage.

Start Anew Globally                                                

     One or more institutions will be needed to replace the ones abolished. The most logical start is an institution that already exists, the United Nations. For over half a century it has had numerous international mandates. Three of its organizational components are most relevant here, the Economic and Social Council (ECOSOC), the International Court of Justice (ICJ), also called the World Court, and the UN Conference on Trade and Development (UNCTAD). Until it was shunted aside by the Unholy Trinity, UNCTAD had been a means for poor countries to reorient their economies toward constructive developmental efforts.

     Cavanagh and Mandy have proposed that UNCTAD first successfully challenge the longstanding premise that the only way for developing countries to achieve prosperity is to become fully integrated into the international system, meaning the Unholy Trinity’s system, and then secondly to go on to become the rule-making body for international trade. The authors also propose adding six more global institutions to assume the functions of the Unholy Trinity plus some more functions.⁶⁹ I would only add here that rather than just “dampen” currency speculation, as the authors suggest, the UN with the concurrence of financial markets in each country should work toward outright banning of such speculation. China, the country that treats it as a capital offense would surely go along with such an international ban!

     The UN’s full potential for global governance has been curtailed partly because its domain is so large and heterogeneous and partly because it has invariably been criticized and marginalized by Republican administrations in the U.S. Incredibly, the acting U.S. envoy to the UN in 2005 had remarked a decade or so earlier that “There is no such thing as the United Nations. There is only the international community, which can only be led by the only remaining superpower, which is the United States.”⁷⁰ Reforming the UN and giving it even more responsibilities will thus be an uphill battle. It has never been an effective institution in representing and advancing the interests of the Third World. It has never had any countervailing impact on the Unholy Trinity. It favors multinational corporations at the expense of developing localized companies and markets. Yet the prospect for reform may be a bit brighter now that President Obama has replaced Bush’s representative at the UN.

Localize More, Globalize Less

     It’s conceivable that, quite apart from any anti-globalization strategies, the same end may some day be achieved at least to some degree by various trends we see today, a few probably irreversible. They are, Cavanagh and Mander say: proportionately greater distribution costs domestically and internationally; the related trend of oil reserves dwindling; niche marketing; the shift from goods to services; more businesses operated from homes using computers; terrorist threats; and growing disdain for the work places of large corporations.⁷¹

     Cavanagh and Mander clearly aren’t recommending that we suspend anti-globalization strategies and wait for these trends to grow, but they do view them as making inevitable the application of their concept of “subsidiarity.” They refer to it as “an operating principle favoring the local whenever a choice exists, which means in practice that all decisions should be made at the lowest level of governing authority competent to deal with them.”⁷² Moreover, most decisions they say that involve the public can be made at some geographical level within the country, not outside it. The coauthors propose numerous initiatives for localizing more and globalizing less (e.g., establish government policies to support local enterprises).

     Additionally, there ought to be a national policy stipulating that wealth earned in America stay in America. As Robert Reich, the former Labor Secretary in the Clinton administration has pointed out, “the rich don’t necessarily invest their earnings and savings in the American economy; they send them anywhere around the globe where they’ll summon the highest returns.”⁷³ Money reinvested in America yields a qualitatively different and valuable return, a boost in the American economy, including employment.

End Unsustainable Development

     Economic growth that helps us to climb out of a recession is one thing. But endless economic growth, the Holy Grail of corpocratic capitalists, their economists, and the cultists of growth is like the Greek poet Ovid’s ancient tale of a greedy timber merchant, Erisychthon, who cuts down a sacred tree, angering Ceres, the Goddess of Plenty. She condemns him to eat everything in sight including himself after all else had been consumed. The authors who retell the tale believe he symbolizes the essence of materialistic capitalism, an insatiable “monster devouring itself.”⁷⁴ If it weren’t so hard to pronounce, the economic meltdown of 2008 could be nicknamed the Erisychthon hangover.

     Vaclav Havel, whom I mentioned earlier, is a modern day Ovid of sorts, having told the world that nature is warning us about our immoral footprint on her and that we must end the debt accumulated from constant economic growth and start paying back.⁷⁵ It’s this immoral footprint that prompted the UN as long ago as 1983 to convene what became known as the Brundtland Commission to assess the extent of that impact and the damages it had inflicted. Besides giving its assessment, the Commission in its report introduced what has become a widely accepted definition of sustainability; development that “meets the needs of the present generation without compromising the ability of future generations to meet their needs.”⁷⁶ Ralph Nader, who was instrumental in getting the Environmental Protection Agency established has just as simple a definition: “That you take out of the Earth no more than you put into it. That you put into the Earth no more than you take out.”⁷⁷

     Note that the Commission defined sustainability in terms of development, not growth. The two are very different. The concept of growth carried to its logical extreme is classical Ovidian. growth. Cut and sell more trees. Get bigger. Cut and sell still more trees. Get bigger still. Bigger becomes biggest and then grows beyond its adjectives. Go find and deforest another forest. And bigger than biggest is simply still more growth. At some point in the growth spiral growth becomes unsustainable. There are no more forests.

     The concept of development, in contrast, connotes improvement in quality, not increments in quantity. Get better, not bigger. Get from better to best. And the concept of best is synonymous with excellence, the epitome of quality. Unlike endless growth, excellent quality is not endless. There’s nothing beyond the eight criteria of excellence (e.g., reliability), and none of which involves unlimited growth.⁷⁸ Once all eight are met, excellence has been achieved.  Sustaining excellence requires only continually satisfying the criteria (e.g., no unreliability). 

Stop Ovidian Growth

     Nature will inevitably have the Last Laugh over our dumb growth, but His/Her laugh could be delayed by ending the corpocracy once and for all. And we can’t wait until it eventually devours itself for at some point America would also be devoured.

     Four positive ways to slow if not stop unbridled growth have already been discussed: the tightening of antitrust regulations; the ending of corporate welfare; the ending of exploitative globalization; and more reliance on localized commerce. Other strategies involve fighting in court “big-box” stores that seek to enter yet more communities and displace yet smaller stores; and cultivating “smart” growth, not “no growth.”

Make Commerce Greener

     At best pollution permits are a temporary and partial solution to curbing pollution. They may slow its rate, but they will not make commerce much greener. At worst, they tell us all that we have the “right” to pollute as long as we pay for the permits. What legitimate authority gave us that right we should ask? The only legitimate authority would be Nature. If it/she/he could talk to us, what we would hear would be cries of anguish and pain, not “here’s your permit.”      

      One positive outcome emerging from Economic Katrina is the blossoming of usually small business firms working to create new products that will make smaller footprints on Nature. Additionally, there are a few goliaths, perhaps outliers in or outsiders of the corpocracy that have sensed the environmental crisis we are in and singlehandedly or together in small consortiums are trying to come up with greener innovations.   

     Making products and services greener will lighten our polluting footprint. But much more needs to be done beyond ending corpocratic capitalism. One promising course of action would be to carry out the four strategies proposed by the authors of the book on natural capitalism summarized in Appendix C.

End Elitist Pay without Performance 

                                                                                    For capitalism to work executive pay

                                                                                    must be linked to performance.

                                                                                                            ---Ben Bernanke

Chairman of the Federal Reserve

     Mr. Bernanke, who should have known better, misjudged the causes and the severity of Economic Katrina, but he’s absolutely right about executive pay.⁷⁹ One reason capitalism isn’t working is because there is typically little connection between the pay of corporate executives and how well and honestly their companies meet stakeholder expectations in a capitalistic market. In essence, executive pay without (the right kind of) performance is just one more badvantage corrupting capitalism. To make matters much worse, two related badvantages are that executive pay is unconscionably high and that while CEOs are fattening their own pay they are simultaneously laying off workers by the thousands.

     A prime and revolting example of these badvantages in play during Economic Katrina is the bailout bonuses for Wall Street executives. But pay without performance pervades all of corporate America, not just Wall Street. Long before Economic Katrina happened, for example, eleven companies with high risk ratings and a composite loss of $640 billion in shareholder value paid their CEOs a total of $865 million.⁸⁰  That’s nearly $80 million for each of the eleven failing CEOs and about two thousands times more than the average worker in their companies who probably was paid an annual wage of around $40 thousand. In his time, two millennia ago, Plato suggested a 9-to-1 ratio between the highest and lowest paid citizen. In his time, the late management guru Peter Drucker suggested between 20-to-1 and 25-to-1 ratio between CEOs and the workforce. Rick Wartzman, executive director of the Drucker Institute, said Drucker contended that paid CEO’s alienated “people on the plant floor who were convinced their bosses are crooks,” were “morally unforgivable when laying off workers,” and “tore at the fabric of society as a whole.”⁸¹

     The public outrage over executives of federally bailed out Wall Street firms giving themselves lavish bonuses prompted President Obama to set a pay cap of $500 thousand on senior executives of these firms. The public ought to be insulted by his timid measure. Bailed out executives ought to be fired, not bailed out and then capped. But the same pay cap ought to be imposed on CEOs of all corporations that receive handouts from the government.

     The public ought to be equally outraged over the contempt fat cat CEOs have for ordinary workers not just in the CEOs’ demanding and getting unconscionable and unearned compensation but also in their simultaneously laying off thousands of workers. The NGO, Institute for Policy Studies (IPS), reports that CEOs of the 50 corporations laying off 3,000 or more workers since the onset of Economic Katrina “took home 42 percent more pay ($12 million on average) in 2009 than their peers at S&P 500 firms.”⁸² On its website the NGO lists the 50 CEOs and urges readers of the site to “Find a layoff-leading CEO below: you can write a post on your Facebook wall, send a tweet to your followers, and tell your friends that you won't stand for injustice. Together we can shame these companies and stop executive excess.”⁸³

     When you think about it for a split second, the phenomena of pay without public service is happening in the other part of the Devil’s Marriage as well. Although their pay can’t compare with CEO pay, politicians are given six figure salaries, generous health care and retirement benefits, plush offices, and bloated staffs. And for what? Public service? No, corporate service. 

     The IPS entreaty is well intentioned to be sure, but I seriously doubt that shameless, overpaid CEOs (and politicians, too) can be shamed into pay cuts by face book messages, tweeting, bill boarding or by any other means of publicity about their notorious pay and contempt for workers. The only way to ensure pay with (the right kind of) performance is to end undemocratic capitalism and close down the circus. Needless to say, though, achieving those goals is easier said than done and shaming is at least a first step.

Is Any Capitalism Fit for a Real Democracy?

     We have gone through many ideas for a democratic capitalism, but is it possible that capitalism and democracy don’t mix at all, ever? I raise the question because some people would answer “yes.” One of them in a round-about way is Lester Thurow, a former dean of the MIT Sloan School of Management, professor of management and economics, and author of numerous bestsellers on economic topics. In one of his books he flat out says that “capitalism is perfectly compatible with slavery [and] democracy is not compatible with slavery.”⁸⁴

     Well, Professor, I agree with you only if you are referring to corpocratic or undemocratic capitalism. And I think it is now more imperative than ever to rid ourselves of it and envision and build a new and much better kind of capitalism. I know of no other acceptable alternatives to democratic capitalism. Communism? Definitely not! Unlike his teacher Plato, who advocated communistic guardianship of property, Aristotle did not, thinking it to be unnatural. Socialism? I suppose the kneejerk reaction of the cons, for whom the idea of social justice is synonymous with socialism, would be to call my version of democratic capitalism, “socialism” because it seeks to make capitalism more egalitarian and economically just.

     Charles Derber tells me he thinks “many of my preferred forms of capitalism are not really capitalism in any orthodox sense” and goes on to advise me either to “nuance my view that there is no alternative to capitalism” or to “simply reframe the argument, indicating the "good capitalisms" that I explore are not truly capitalist in the hegemonic model and that more clear alternatives are growing in the periphery of the developing world, as well as in U.S. local economies.” Contending that there is no alternative, he says, “seems a false and dangerous argument, [because those clear alternatives do in fact exist].” He tells me he “is working on a new book about alternative systems that we see seeds of around the world - and in the U.S.”⁸⁵ I look forward very much to reading that book because I have for the time being exhausted my self and my ideas on the matter.

     A democratic capitalism is a necessary but not totally sufficient condition (because there’s still, e.g., the circus to close down) for giving an affirmative answer to columnist Bob Herbert’s question at the end of the quote in one of his columns:

Let’s try investing in America and its people

for a change, rather than just hurling our billions

into the abyss. We can find trillions for a foolish

war and for pompous, self-righteous high-rollers

who wrecked their companies and the economy.

But what about the working poor and the young

people who are being clobbered in this downturn,

battered so badly that they’re all but destitute?

Can we find any way to help them?

                                                                                                ---Bob Herbert⁸⁶