Romney, Obama, and the Bipartisan ‘Free Market’ Scam
“Ryan’s a corporatist. Ryan is anything but a conservative. [‘Corporatist’] is my word for what they’re calling crony capitalists — they expand government in the service of corporate interests. It’s the merger of big business with big government where the big government is in the service of big capitalism.” — Ralph Nader
“In the Soviet Union, capitalism triumphed over communism. In this country, capitalism triumphed over democracy.” — Fran Lebowitz, Social Studies
No election year is complete without a parade of politicians telling us that the free market is the panacea for the country’s economic woes.
Republicans are more blatant in their promotion of market solutions. Mitt Romney, in his nomination acceptance speech, declared that the White House should be inhabited by a business-oriented president, i.e., one who understands and bows to the market. Democratic Party leaders are more nuanced in their language, until you peel away the rhetoric and consider their actual policies and actions.
It’s time we took a look at what Gov. Romney, his fellow Republicans, and their Democratic opponents mean when they talk about the market.
If we examine the legislation that Congress and various presidents have promoted and passed, it’s clear that “free market” for politicians of both parties is code for something quite different from what most people believe it means.
For most Americans, the model for market competition is a group of similar businesses, perhaps located on Main Street, that compete for customers. Two shoe stores on the north and south ends of town both want customers, so they compete by adjusting their prices, offering more and better merchandise, and advertising. Why should government interfere, when both shoe shops, the employees they hire, and customers’ feet benefit from such competition?
At the level of major corporations — multinational companies, Wall Street, Big Oil, agribusiness, defense contractors, and various conglomerates — the Main Street model is a propaganda tool.
The deregulation that Republicans and Democrats have enacted has little to do with popular conceptions of the free market. On the contrary, deregulation enables corporations to buy up their competition, especially smaller companies. The result of leveraged buyouts and other forms of acquisition is that businesses combine to form monopolies and virtual monopolies, with economic (and political) power concentrated in fewer and fewer boardrooms.
Monopolies are the enemy of competition. When a single company or a tiny number of companies (ExxonMobil and Chevron, for example) possess so much horizontal and vertical control over markets, no real competition takes place.
This is hardly a secret, but politicians of both parties still pretend that such concentration benefits everyone, despite so much counter-evidence. A good example is Comcast’s exclusive ownership of cable TV rights in Pittsburgh and other communities, allowing it to get away with high prices and poor customer service. Another example is the 1996 Telecommunications Act, signed by President Clinton, which deregulated ownership of media and allowed a small number of large media firms to buy up several TV, radio, and newspaper companies in single cities, giving them greater control over what news we’re allowed to see, hear, or read.
The proliferation of Walmarts in recent decades is classic faux free market: supported by local Democratic and Republican elected officials with tax breaks, subsidies, and taxpayer-funded changes in infrastructure, Walmart undercuts small local businesses with dirt-cheap prices, draining the area economy and turning Main Street into a ghost town, while paying employees sub-liveable wages with no benefits.
What Mitt Romney means by “free market” is unrestrained power for corporate bureaucracies. He has a special affinity for this idea, as co-founder of Bain Capital, a private equity and public market investment firm.
We shouldn’t confuse companies like Bain Capital with Main Street businesses like the shoe-store example above. For companies like Bain and execs like Mr. Romney, small businesses exist to become fodder for larger companies. The damaging effect of this kind of predatory capitalism on jobs and local economies in the US has been reported by Tim Dickinson in Rolling Stone and other journalists.
Sam Smith, in the August 25 edition of Undernews, wrote ?”Personal to campaign media: Please stop referring to Mitt Romney as a businessman. He’s not; he’s an investment banker who makes money off of businessmen and through buying and selling their businesses. As any business owner can tell you; this is miles from the same thing.”
The “Market” Agenda
Bain Capital, like many financial sector firms, is less a business in the usual sense and more the blunt expression of an idea — the free movement of capital, without regard for its effect on civil society or the environment. Both Republican and Democratic parties serve the doctrine of unrestrained corporate power and it’s easy to see why. Browse the web site of the Center for Responsive Politics for a glimpse at the hundreds of thousands of dollars that top corporations contribute to politicians of both parties to maintain their influence.
The Supreme Court’s Citizens United decision (2010) affirmed the legal status of corporations as “persons” under the 14th Amendment and allowed them to advertise without restriction for favored candidates, granting corporate elites even greater leverage over major-party politicians. As a result, the differences between the two parties are mostly factional: within a narrow and sometimes nonexistent range of disagreement, they compete over the best way to serve their top benefactors. (See “Closer Than You Think: Top 15 Things Romney and Obama Agree On” by Bruce A. Dixon in Black Agenda Report.)
They render this service with various kinds of legislation and public policy:
• Massive taxpayer-funded subsidies and tax breaks: If we judge by the money they make from heavily subsized energy firms, the Koch brothers are welfare queens par excellence. Citizens for Tax Justice has published lists of major corporations, like Verizon, General Electric, and Pacific Gas & Electric, that pay zero or near-zero taxes despite billions in profits.
• Deregulation: The classic example is President Reagan’s loosening of laws governing the savings and loan industry in the 1980s, which led to a crisis that vaporized the life savings of hundreds of thousands of Americans. President Clinton’s signature on the 2000 Commodities Futures Modernization Act and repeal of Glass-Steagall eliminated rules that would have prevented the 2008 meltdown, a fact missing from the visionary speech he delivered at the 2012 Democratic National Convention.
• Bailouts: Americans are still outraged at the unconditional multi-trillion-dollar bailout of Wall Street in 2008, which was supported by both John McCain and Barack Obama. Some of the bailed out firms used the money to buy up smaller companies, further consolidating themselves as “too big to fail.” President Obama went on to appoint Treasury Secretary Tim Geithner, economic advisor Larry Summers, and Chief of Staff Mike Daley — Wall Street operatives and advocates of the policies that triggered the crisis.
• Impunity for corporate crimes: At least the savings and loan execs whose actions caused the crisis in 1980s were investigated and brought to trial. Neither Barack Obama nor Mitt Romney intends to hold the Wall Street fraudsters behind the Subprime Mortgage Crisis responsible and ensuing meltdown accountable, nor will they allow anything more than token aid for homeowners who face foreclosures.
• Privatization of public services and resources (often for free, at fire-sale prices, or with no-bid contracts): When Atlanta and Detroit handed their water utilities over to private contractors, the results included brown water and higher bills for consumers. Wall Street firms and their pet politicians, including top members of President Obama’s Simpson-Bowles Commission on Fiscal Responsibility (“Catfood Commission”), seek reductions in Social Security that will force working Americans to invest their retirement savings in the high-risk Wall Street casino. Both Romney and Obama favor cuts in Social Security and Medicare. The privatization of prisons has created a financial incentive to lock up more Americans, to the point where the US has the highest rate of incarceration of any country in the world, with black, brown, and poor communities devastated by the numbers of young people behind bars for nonviolent offenses.
• International trade cabals that favor corporate demands over labor, human rights, and environmental protections and democratic sovereignty: NAFTA (signed by President Clinton after promising to oppose it during his 1992 campaign) is the most famous example. The Trans-Pacific Partnership (TPP), negotiated in secret and supported by both Romney and Obama, is the most recent.
• Overreaching intellectual property rights that privilege corporations: Think of the war between Monsanto and small farmers over genetically modified seeds and actions by the recording industry to exploit artists and censor the Internet by legal intimidation.
• Offshore accounts that allow wealthy corporations and individuals to escape paying US taxes, while Washington looks the other way.
Plutonomy versus Economic Democracy
There are some names for the ideology that says the chief purpose of government is to serve the demands of top corporations and help them consolidate power. Republicans call it promoting the free market and “ending big government.”
Democrats use equally obfuscating language (“win-win situation,” “public-private partnership”) and try to dress up their actions as compromise or even progressive reform. For phony progressivism, there’s no better example than the individual mandate imposed by the 2010 Affordable Care Act (ACA), an idea that was introduced by the rightwing Heritage Foundation, advocated by GOP leaders as a national plan in the 1990s, and enacted by Gov. Romney in Massachusetts.
The ACA (also known as Obamacare, more properly ObamaRomneycare) was crafted by Democrats with the participation of health insurance company reps. Despite the factional debate over health care reform, Obama and Romney and their fellow party leaders agree on the premise that the private insurance bureaucracy must maintain its control over our health care, without disturbing the skyrocketing medical costs that feed their bottom lines.
Occupy Wall Street protesters understand the radical, anti-democratic ideology of government-corporate convergence. Members of the movement who haven’t allowed the Occupy grievances to be shoehorned into “Reelect Obama” recognize that the solution lies outside the two-party election paradigm.
We should discard the “free market” claptrap and call it what it really is: corporatism, plutocracy, oligarchy, redistribution of wealth from bottom to top, rule by the One Percent, socialism for the rich, turbo-capitalism, Robber Baron Era redux, neo-feudalism. My favorite term is plutonomy, a word introduced in an infamous leaked Citibank memo on “global equity strategy” that fretted over “society demanding a more equitable share of wealth.”
We must develop a new and independent kind of politics to take America in a different direction. The Occupy Movement, joined by unions and community organizations, is doing so in the streets. The Green Party, with 2012 presidential nominee Jill Stein and running mate Cheri Honkala, has made inroads at the ballot box. Progressive Democrats are fighting the good fight in a party that may have drifted beyond rehabilitation.
There are plenty of alternatives to the current corporate-capitalism model: aid and redesign of municipal infrastructure to assist small businesses instead of Walmarts; support for family farms instead of Monsanto; worker-owned and community-owned companies and cooperatives; break-up of too-big-to-fail Wall Street behemoths into smaller regionally based firms (which the federal government had every right to undertake, since the 2008 bailout was in essence a government buyout); reversal of privatization of public properties and services like Social Security and public education; punishment for corporate criminals; renegotiation of trade pacts to ensure that local economies, the rights of working people, and the environment will be protected.
One of the best alternatives is Medicare For All. Politicians like to denounce Medicare For All as socialism. If fact, there’s more ‘free market’ with Medicare For All than under our current insurance system (or under ObamaRomneycare), since Medicare For All allows us to choose the physicians and hospitals that serve us, motivating them to compete for our visits — unlike private insurance and HMO policies, which tell us which physician or hospital to go to.
The first step towards winning real economic security for our country will take place when Americans figure out that “market-based solutions” are too often a bipartisan scam that masks a dangerous ideology. The constant repetition of the free-market ideal by politicians and talking heads in the media doesn’t make it any less fraudulent or extremist.