Dismantling The Corporate Welfare State

Canadians and various other populations around the world may think we can complacently sit back and wait for America to put its financial house in order and we will all get back to our rambunctious post-modern prosperity, the free market economy, delusional democracy and other minor distractions. But it may be a very long while before the US makes the moves that will return itself to real prosperity and a real and ethical economy.

The US is now being run as a corporate welfare state where wealth is privatized and risk and debt are socialized. In other words, Wall Street pirates, bankers and corporations indulge their greed and incompetence at public expense. Of course these bailouts are only stopgap measures as it will only be a matter of time before another economic collapse, another round of bailouts and the public purse is picked one more time.

America’s capitalists are like the prodigal sons who blow their inheritance and then write home to dad for even more money and dad is all too willing to fork over even more cash. “Dad” is of course all those hapless politicians who are elected by the peoples but serve the corporate lobbyists.  When greedy corporations and hapless politicians get together you have an oligarchy- a bipartisan oligarchy as both of America’s political parties are part of the problem. An oligarchy- rule by economic elite- requires that politicians and corporatists collude and this defines 21^st century America.  Alarmingly, corporatism is only a step away from fascism. 

When politicians speak of “bipartisan initiatives” citizens beware, as it most likely means the public good is going to get savaged one more time. Bipartisanship is dysfunctional oligarchic behavior practiced by indolent politicians who want to take the path of least resistance and ensure their place in line at the feeding trough of corporate campaign donations.

Americans are unduly proud of their rambunctious free market capitalism. Neoliberals petitioned for the deregulated, privatized free market economy and political elites were all too willing to retreat from governance and grant them their wish. The private sector claimed that free enterprise must be truly free, that it would be self-regulating and that wealth would trickle down and everyone would live happily ever after.  Now, as economic ruin spans global horizons it turns out they just wanted a license for avaricious greed and very grand larceny.

            Politicians have come up with their usual clichéd response of throwing good money after bad with trillion dollar bailouts, incentives, soaring rhetoric and tough talk. These bailouts are tantamount to handing an alcoholic another bottle of whiskey and telling him to sober up. The rhetoric wears thin very quickly and the tough talk becomes stupid when it is obvious that structural change-how we do business- for Western and world economies is an urgent necessity. For starters, this structural change comes in the form of strict government intervention and regulation. The Neoliberal free market corporate driven economy has been an utter disaster and it now remains for legislators to bury it.

            Politicians were more than willing to cannibalize the social welfare state as they derided it excessive costs. Now the corporate welfare state makes it a bargain as trillions of dollars suddenly become available to bail out financial and corporate institutions rife with incompetence and corruption. Now, to avoid a ruinous and prolonged economic depression, politicians are going to have to end their complicity and cannibalize the corporate welfare state with an even greater vigor and determination than they did the social welfare state. In other words financial and corporate institutions are going to have to be rendered accountable, disciplined and socially responsible. Where they have proven in the grandest of terms they cannot exercise any of these prerequisites these must be imposed on them by non other than government.                

 It can be easily argued corporations as they are presently constituted have outlived their purpose. It is a brutal irony that even though the corporation is the very essence of the capitalist system and shuns socialism it is all too willing to accept socialist measures in the form of bailouts, subsidies and preferential treatment in taxation to remain viable.  While corporations drive economies they have also become hugely parasitic.

Steeped in power and privilege the modern corporation with its generously subsidized wealth has a proven ability to

 corrupt and subvert government priorities all too often in direct conflict and at the expense of the public good and national interest of the country.

President Barack Obama wants to re-establish US global primacy but it is a long road back as the US teeters on the brink of an economic depression that will easily out strip that of the 1930’s in scale and devastation. The road back begins in Obama’s own back yard as the American homeland has been plundered by the self interest of corporations, especially those of the military industrial complex. No country can afford to direct half of its national budget toward defense spending. No country can out source its industrial base and expect consumer spending, sub-prime mortgages and the fraudulence of Wall Street pirates to drive and sustain its economic well being.

Obama faces not only an economic crisis but also one of political leadership spanning not just one but several presidencies. The economic collapse of 2008 has in very large part been the result of years of negligent political leadership.

 US Politicians are predisposed to declaring wars and military states of emergency as they pander to their corporate constituencies and further implant the culture of fear (another subject for another time.)  Now Obama must declare an economic state of emergency for the ultimate well being of his country, but first of all, to shock America’s complacent and corrupted political classes into realizing the depth and ultimate consequences of the crisis. As the crisis was fueled by ruthless political indifference and negligence it can in turn only be resolved by resolute and hardnosed leadership- leadership that will not tolerate fools, petty partisanship, vested interests and corporate lobbyists.

Americans are going to have to start looking to Donald Rumsfeld’s “old Europe,” and even northward to Canada for economic and social policies it can import and adopt.  

It is a mistake to think that present efforts are going to turn this crisis around. This will only happen when citizens, consumers and investors have real confidence that the financial system has been restored to some semblance of integrity and sanity. An essential first step to recovery is establishing accountability. 

Our “global village” is at a point in time where we can ill afford dysfunctional political leadership, failed economic systems and serial warfare. Our political and economic systems must be stable, sustainable and form a basis for addressing urgent global agendas multilaterally.

America has an urgent national, but also global obligation to heal itself. Failure to do so means the year 2008 marks the end of a tumultuous era and the searing sunset of a vainglorious empire.

Robert Billyard 2009 ©

Next:  America Needs the Canadian Cure