Friday, July 16, 2010
Jane Hamsher is providing an essential service by having people do such important spade work, making firedoglake a excellent website for understanding the ongoing effort to dismantle what remains of the New Deal, even if you don't agree with the overall ideological perspective. Now, even Donna Smith of Reuters is reporting what the Commission wants to do:
The Deficit Reduction Commission is the instrument by which the sub-proletarianization of the US will be accomplished. Reduced social security benefits, the reduction, if not elimination of the home mortgage deduction and substantially less government assistance, this is the future, coming soon to your neighborhood. And, just in case there was any confusion:
Erskine Bowles and Alan Simpson made clear at a U.S. Chamber of Commerce event that the bipartisan panel is eying tax breaks, including the popular mortgage interest deduction, as well as slashing government spending in its effort to recommend ways to cut the estimated $1.4 trillion federal deficit.
It is all going to be very painful, Bowles said.
The 18-member commission has been tasked by Obama to deliver its recommendations in December, well after the November congressional elections in which the deficit and $13 trillion debt have become major issues.
Bowles and Simpson provided some insight into what the commission might suggest.
Bowles, who served as former President Bill Clinton's chief of staff, said most of the effort has to come from spending, a view that puts him at odds with some of his fellow Democrats who are looking to pare back President George W. Bush's tax cuts for the wealthiest Americans to reduce the deficit.
I just want to see the vast majority of it come out of spending, Bowles said.
He said about 75 percent of the deficit reduction effort should come from spending cuts and 25 percent from revenue increases.
If such measures are proposed and adopted, we will experience an exponential increase in already extreme disparities of wealth within this country. Governmental expenditures and income taxes are generally redistributive, while a tax on consumption is regressive, reducing the amount of taxes that the wealthy pay upon investment income while placing more of the tax burden upon the middle and lower class.
Bowles also called for capping government spending at 21 percent of the overall economy. Government spending now accounts for 24 percent of the economy and could rise to 27 percent, according to Republican Senator Judd Gregg, who is also a panel member.
I would like to see us take a hard look at tax expenditures, Bowles said, adding that they amounted to government spending by a different name. Bowles said he favors lowering corporate and individual income tax rates and putting in place a tax on consumption.
Approval of the sorts of measures suggested by Bowles would enshrine the imperialism of market "reason" so incisively critiqued by lenin earlier today. In the UK, it is manifesting itself in the most extreme form through plans to privatize much of the provision of health care by the National Health Service.
As described by lenin:
There are three critical things to understand about the public statements by commissioners like Bowles and Simpson in relation to lenin's insight: First, and most obviously, the implementation of policies designed to facilitate such a philosophy, as the Commission intends to do, will inflict social hardships upon Americans to a potentially unprecendented degree, perhaps even worse than those experienced during the recessions of the 1870s and 1890s and the Great Depression of the 1930s.
One aspect of this specious conception of reason is the encroachment of a set of analytical principles established by marginalist economics into other fields of social science. Though specifically concerned with the workings of markets, it is assumed by their advocates that these could apply universally. And, as Ben Fine and Dimitris Milonakis argue (From Economics Imperialism to Freakonomics, Routledge, 2009), the 20th Century saw a growing tendency for various authors, including the writers of such ordure as Freakonomics, to extend them as universally as possible. Freakonomics (and its Super- sequel) discovers a market logic behind a bewildering variety of social phenomena. Gary Becker finds that market logic explains a wide range of phenomena including crime and punishment. For Robert H Frank, economics explains everything, and he encourages his students to find ways to apply market laws to all manner of questions. Everything up to and including romantic relationships can be understood in terms of utility maximization. Thus, the search for a partner can be interpreted as a petty entrepreurial activity in a competitive market, in which - acting on information and incentives - couples form property-based relational contracts as a means for effectively utilizing resources, and the relationship is only sustained for as long as each maximises the utility that the other receives.
Underpinning this approach is three basic analytical principles. The first is individualism. The individual is taken to be the self-sufficient unit of all forms of behaviour, the real basis of all fictitious corporate entities. The second is rational self-interest. The individual behaves in ways that will maximise utility to herself, on the basis of a rational assessment of the information available in the market. Here, utility is purely subjective - whatever is useful to an individual is whatever she thinks is useful, while there is an assumption of an implicit market in all walks of life, even where there are no commodities, no price signals, and no currency. The third principle is exchange. Utility maximisation optimally takes place through the act of exchange, and that exchange can take place between the drug dealer and the addict as much as the lover and the pursued. This kookiness, where it is not merely circular and vulgar, descends into absurdity when the suitability of the theory can only be established through an ad hoc proliferation of conceptual innovations, as when - for example - Becker explains criminal recidivism in terms of a preference for risk. This naturalises and universalises the cut-throat self-advancement of career-minded bourgeois WASPs, distilling it into a set of puerile anthropological axioms. Middle market books such as The Economic Naturalist probably aggrandise the narcissism of the bourgeois, allowing them to read about themselves and their conduct in flattering terms, giving it a metaphysical twist, endowing it with transcendent validity. And small wonder that such people like to hear that everyone else has exactly the same petty, criminal mentality that they do - it is not capital that is self-maximising, it is humanity itself! - and that they have merely been more successful utility-maximisers than the majority of humankind.
Second, and also fairly evident, it will result in a period of violent unrest, again, perhaps worse than any comparable periods in American past. Given the lack of any publicly recognized left alternative, or for that matter, any political alternative, the prospects for horrible incidents like, say, the pogroms in Russia in the 19th Century, are more likely than we want to admit. Perhaps naively, I still hope that we won't descend something akin to the worst excesses of fascism.
Third, and more subtlely, there is, as emphasized by lenin, the effort to impose a vision of all human experience as one limited to the rationality of market transactions. Beyond intensifying the devastation of the global environment, it will further impair the ability to persuade people to act collectively and have a sincere interest in the well being of others. It will also result in harsh emotional dissonances for everyone subjected to it. People find fulfillment in life for many reasons other than personal economic success, and the inabililty to seek to attain such fulfillment will have nasty consequences for those frustrated by it, whether they are conscious of it or not. A fuller understanding of this emergent phenomenon awaits a 21st Century Freud or Jung, but, for now, the peril is that such repressed resentments will erupt violently, reordering society along explicitly authoritarian lines.