Regime Change Begins At Home

Freeing America from Corporate Rule

Charles Derber (Author)

Publication date: 07/01/2004

Regime Change Begins At Home

By the author of the internationally acclaimed books Corporation Nation, The Wilding of America, People Before Profit, and The Pursuit of Attention

Shows that Americans are ruled not just by a particular administration but by a corporate regime, spanning several decades and incorporating both mainstream political parties, which puts the interests of big business ahead of those of ordinary Americans

Offers hope-and detailed strategies and tactics-for defeating the corporate regime and returning America to its people

Since 1980, America has been run by a corporate regime that has co-opted both political parties and shifted sovereignty from "we the people" to trans-national corporations. The result has been job insecurity for millions of workers, debts as far as the eye can see, and a dangerous quest for global domination. Democracy itself has been undermined and the Constitution weakened. This regime must be overturned! And, as Charles Derber demonstrates in his provocative new book, it can be. After all, Derber points out, there have been other corporate regimes in American history, although this latest version is by far the most extreme. Still, the corporate regimes of the Gilded Age and Roaring Twenties were overturned. To create regime change again, it will require bold, creative strategies, uniting progressives and conservatives in a new politics, which Derber outlines in detail.

Regime Change Begins at Home exposes the many lies the corporate regime has used to maintain itself throughout its history, from the Cold War to the Iraq war, with a particular emphasis on how the Bush administration has cynically sought to, as Condelezza Rice once put it, "capitalize on the opportunities" presented by 9/11. Derber reveals how the Bush administration has used the so-called "war on terror" to frighten and distract the public. But regime change is possible. In Part III, Derber lays out the vision of a new regime, describing the social movements now fighting to achieve it, and the major new political realignment-one spanning the traditional conservative-liberal divide-that can make it happen. Derber does not minimize the difficulty of the task ahead, but he offers hope and specific, sophisticated, often surprising advice for defeating the regime and returning America to its citizens.

  • By the author of the internationally acclaimed books Corporation Nation, The Wilding of America, People Before Profit, and The Pursuit of Attention
  • Shows that Americans are ruled not just by a particular administration but by a corporate regime, spanning several decades and incorporating both mainstream political parties, which puts the interests of big business ahead of those of ordinary Americans
  • Offers hope-and detailed strategies and tactics-for defeating the corporate regime and returning America to its people

Read more and meet author below

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Overview

By the author of the internationally acclaimed books Corporation Nation, The Wilding of America, People Before Profit, and The Pursuit of Attention

Shows that Americans are ruled not just by a particular administration but by a corporate regime, spanning several decades and incorporating both mainstream political parties, which puts the interests of big business ahead of those of ordinary Americans

Offers hope-and detailed strategies and tactics-for defeating the corporate regime and returning America to its people

Since 1980, America has been run by a corporate regime that has co-opted both political parties and shifted sovereignty from "we the people" to trans-national corporations. The result has been job insecurity for millions of workers, debts as far as the eye can see, and a dangerous quest for global domination. Democracy itself has been undermined and the Constitution weakened. This regime must be overturned! And, as Charles Derber demonstrates in his provocative new book, it can be. After all, Derber points out, there have been other corporate regimes in American history, although this latest version is by far the most extreme. Still, the corporate regimes of the Gilded Age and Roaring Twenties were overturned. To create regime change again, it will require bold, creative strategies, uniting progressives and conservatives in a new politics, which Derber outlines in detail.

Regime Change Begins at Home exposes the many lies the corporate regime has used to maintain itself throughout its history, from the Cold War to the Iraq war, with a particular emphasis on how the Bush administration has cynically sought to, as Condelezza Rice once put it, "capitalize on the opportunities" presented by 9/11. Derber reveals how the Bush administration has used the so-called "war on terror" to frighten and distract the public. But regime change is possible. In Part III, Derber lays out the vision of a new regime, describing the social movements now fighting to achieve it, and the major new political realignment-one spanning the traditional conservative-liberal divide-that can make it happen. Derber does not minimize the difficulty of the task ahead, but he offers hope and specific, sophisticated, often surprising advice for defeating the regime and returning America to its citizens.

  • By the author of the internationally acclaimed books Corporation Nation, The Wilding of America, People Before Profit, and The Pursuit of Attention
  • Shows that Americans are ruled not just by a particular administration but by a corporate regime, spanning several decades and incorporating both mainstream political parties, which puts the interests of big business ahead of those of ordinary Americans
  • Offers hope-and detailed strategies and tactics-for defeating the corporate regime and returning America to its people

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Meet the Author


Visit Author Page - Charles Derber

Charles Derber is professor of sociology at Boston College and former director of its graduate program on Social Economy and Social Justice. He is a prolific scholar in the fields of political economy, international relations and society, and is the author of eight previous books, including People Before Profit: The New Globalization in an Age of Terror, Big Money and Economic Crisis, Corporation Nation and The Wilding of America.

To learn more about Charles and his work, visit him on the web here

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Table of Contents



Part I: The Corporate Regime

Chapter 1: The Regime
Chapter 2: Elections and Regimes
Chapter 3: Beyond Normal Politics

Part II: Extreme Regime

Chapter 4: The Big Lie
Chapter 5: Dog-Wagging with Bush
Chapter 6: The Perfect Storm
Chapter 7: Econogate
Chapter 8: The Rules of Extremism

Part III: Regime Change
Chapter 9: The Fight for Our Lives
Chapter 10: The New Democracy Regime
Chapter 11: Realignment for Democracy

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Excerpt

REGIME CHANGE BEGINS AT HOME

CHAPTER 1

THE SINS OF THE REGIME

23

Regime” has a nasty ring to it. We hear about Saddam Hussein’s regime, the North Korean regime, Fidel Castro’s Communist regime, the radical clerical Iranian regime, or the Syrian dictatorial regime. You get the idea. A foreign government that is repressive, and that U.S. leaders would like to see eliminated, will get branded in the United States as a “regime.”

That is why the idea of an “American regime” seems so strange to Americans, who have been conditioned to think of regimes as bad governments somewhere else. Have you ever imagined the term can be applied at home? Maybe not, but the dictionary makes clear that the term applies to any “system of rule,” at home or abroad. Europeans, Africans, Latin Americans, Middle Easterners, and Asians talk frequently about the “American regime,” which they fear and mistrust.25

Certificate of Birth


Name:  Third Corporate Regime
Date of Birth:  Election Day, 1980
Father:  Ronald Reagan
Mother:  Corporate America
Headquarters:  Washington, D.C.
Current Caretaker:  George W. Bush

Brief Biography


The regime is twenty-five years old. It took form under the Reagan administration. The regime consolidated itself under Bush I, secured legitimacy from Democrats under President Clinton, and radicalized itself under Bush II. The aim of the regime is to shift sovereignty from citizens to transnational corporations, and to transform government into a business partner committed to maximizing global profits for a small number of global executives and shareholders. It is showing signs of age and is viewed by much of the world as dangerous. Caution is advised.24


Registry of Regimes, Washington, D.C.

Regimes are institutionalized systems of power, good or bad, that rule a nation. Every regime is like a political house built around five great pillars. The pillars usually support the ruling elites, but in democratic regimes they can empower the people. The architecture of the house and the design of its pillars reflect the underlying balance of power in society. The groups or organizations that control money tend to design and run the “house.”

MEET THE PILLARS


  1. A dominant institution (e.g., the corporation, the government, the church) that ultimately controls the house
  2. A mode of politics (e.g., corporate sovereignty, theocracy, representative democracy) that determines how the house is run
  3. A social contract (e.g., the welfare state, laissez-faire, libertarianism) that sets the terms for the tenants
  4. A foreign policy (e.g., isolationism, empire, multilateralism) that dictates the relationship to the neighbors
  5. An ideology (e.g., social Darwinism, socialism, individualism, democracy) that spells out the creed of the household

President Bush is the United States’s most recent and extreme regime leader. He has done some expensive renovation of the pillars, in collaboration with the big monied interests that helped put him in office. He has changed the façade of the regime but not its underlying structure or aims.26

WHO IS GEORGE W. BUSH?


Let’s be clear: Bush should not be treated as a power unto himself. He is simply the most militant custodian of a regime that preceded him and will likely persist after he is sent back to Texas. Nonetheless, regime change looms because of Bush’s extremism and the underlying terminal cracks in today’s aging regime.

Regimes cling to power, claiming that God or nature has ordained them. A nineteenth-century regime leader, John D. Rockefeller, said, “The growth of a large business is merely a survival of the fittest ... the working-out of a law of nature and a law of God.”1 This sort of rhetoric is popular in the current regime, with neoconservative ideologues from the Reagan to the Bush administration portraying the American “free market” system as part of nature, and corporate capitalism as the highest stage of social evolution. One of the regime’s favored thinkers, Francis Fukuyama, a former Reagan administration official and now professor of public policy at George Mason University, calls the current American order “the end of history,” evidently God’s and man’s most perfect creation.2 But while the new corporate regime is deeply entrenched and controls the public conversation, it has not ended history, which in the United States consists of a never ending contest between the existing regime and those seeking regime change. America’s first ruling elite was the British colonial authority, a victim of the most dramatic politics of regime change in the nation’s history: the Revolution. Under George Washington’s first presidency, a Hamiltonian business regime warred with and ultimately triumphed over Jeffersonian Republicanism, to be followed by a succession of new regime changes.27


A BRIEF HISTORY OF U.S. REGIMES

U.S. REGIMES

First Corporate Regime

Built by the robber barons 1865–1901

Progressive Regime

Led by trust-busting President Teddy Roosevelt 1901–21

Second Corporate Regime

Brought to you by Presidents Warren Harding and Herbert Hoover 1921–33

New Deal Regime

Designed by President Franklin Roosevelt 1933–80

Third Corporate Regime

Sponsored by global corporations and Presidents Ronald Reagan, George Bush, Sr., Bill Clinton, and George W Bush 1980–????

While you won’t read about regimes in most history books, American history is a series of fascinating regimes and regime changes. The modern history of U.S. regimes began immediately after the Civil War, when the earliest American corporate regime was born. Art Garfunkel sang “Don’t know much about history,” but if you want to understand the current regime and how it uses power against you, you have to know its history.28


THE FIRST CORPORATE AND THE PROGRESSIVE REGIMES


The first corporate regime was born with a bang after the Civil War. John D. Rockefeller, J. P. Morgan, and other robber barons built America’s first great national corporations in one of the world’s most impressive bursts of economic dynamism and abuse of power. The regime developed as a marriage between the robber barons and the presidents of the era. Republican presidents Grant, Harrison, Garfield, Arthur, and McKinley and Democrat Grover Cleveland all carried water for the new captains of industry. The robber barons dominated American society from the end of the Civil War until 1901.

Sound familiar? The parallels between this first corporate regime and the one today are haunting. The late-nineteenth-century robber baron regime created many of the historic companies, such as Chase National Bank (now J. P. Morgan Chase), First National Bank and National City Banks of New York (now Citigroup), Standard Oil (now called Exxon), and U.S. Steel (now called USX), which, after various mergers, still dominate America. It was the first regime to flood politics with corporate money and create all-powerful corporate lobbies in Washington. Rockefeller’s aides, with briefcases literally stuffed with greenbacks, worked in the offices of senators’ who wrote legislation on oil, banking, and other industries. It’s no secret why they were called “robber barons.” They used their influence over presidents to send in troops when workers tried to organize, and they helped write tax laws that created a huge and growing gap between the very rich and everyone else. We live in born-again robber baron regime, with the corporations bigger and more global, and their domination of Washington even greater.29

Like earlier invading hosts arriving from the hills, the steppes or the sea, [the robber barons] overran all the existing institutions which buttress society, taking control of the political government, of the School, the Press, the Church, and … the world of opinions or of the people.3


MATTHEW JOSEPHSON,

The Robber Barons

Despite its awesome power, this first corporate regime faced a radical challenge by the Populists, fiery farmers and plain-spoken people from the heart-land who created the People’s Party in 1892, captured the Democratic Party in 1896, and launched one of the country’s most important politics of regime change. They proclaimed in 1892 that corporations were being used “to enslave and impoverish the people. Corporate feudality has taken the place of chattel slavery.”4 While the Populists melted away with the 1896 presidential defeat of their candidate, William Jennings Bryan, they helped give rise to the reform movement of the Progressive Era under the “trust-buster,” President Theodore Roosevelt. In 1907, Roosevelt called for “the effective and thorough-going supervision by the National Government of all the operations of the big interstate business concerns,” a direct challenge to the “free market” regime discourse of the robber barons. Roosevelt was no revolutionary, but he did engineer his own regime change politics, culminating in his effort to create a Bureau of Corporations that would put limits on the strongest Rockefeller, Morgan, and other robber baron fiefdoms. Corporations had to restructure themselves and embrace a measure of public accountability, as the Progressive Era consolidated political power in a new regulatory regime quite different from the robber baron order. The eminent historian of the Progressive Era, Gabriel Kolko, labeled the resulting government-led regime “political capitalism.” The Gilded Age corporate regime passed into oblivion.5 30


THE SECOND CORPORATE REGIME AND THE NEW DEAL


The Bush administration resembles not just the Gilded Age presidencies but also the Republican presidencies of the 1920s, which presided over the nation’s second corporate regime. The Harding, Coolidge, and Hoover administrations abandoned the regulatory impulse of the Progressive regime and turned Washington back to big business. While less constitutionally extreme than the Gilded Age presidents, they created a regime of corporate hyper-power, dominated by an ideology of corporate self-regulation and paternalism. They proclaimed a union-free world known as Plan America, a vision of corporate paternalism in which big business would house and educate workers and provide them with medical care and retirement. Plan America was a vision of a whole society wrapped in a benign corporate cocoon, without need for government regulation or unions, previewing some of the views about corporate responsibility fashionable in the current regime. President Hoover said that the government “owes nothing” to himself or any citizen, since the business world had created opportunity for everyone and could police itself. The Roaring Twenties saw an era of overwhelming corporate dominance enlivened by booming prosperity, scandals such as Teapot Dome, and a huge stock market bubble that popped in 1929. The regime ended with market collapse and the victory of President Franklin Roosevelt in 1932.6 31

Spurred by the Depression and the recognition that capitalism could be saved only under a different order, Roosevelt created the New Deal, a regime that established basic rights for labor, codified in the Wagner Act, and created an entirely new social welfare system built around Social Security. The New Deal did not end corporate power, but it turned the government into a limited agent of countervailing power and sought to preserve a public sphere, whether in the health system or in the post office, safe from corporate predators. Economist John Kenneth Galbraith wrote at the height of the New Deal that the federal government’s main peacetime role is to rein in corporate power, a statement that no established thinker or politician could have entertained in the Gilded Age or Roaring Twenties regime.

THE GREATEST AMERICAN REGIME


The New Deal regime was the longest and most important in modern American history. It lasted several decades after Roosevelt’s death in 1945 and still gives hope to many ordinary Americans. By realigning government with ordinary workers and citizens, it created foundations for economic growth and a middle class who could make good on the American Dream. While the New Deal was not a revolutionary anti-capitalist regime and was far from an ideal democratic order, it resurrected the democratic dreams of the Declaration of Independence, reversed the corrupting legacy of two earlier corporate regimes, and demonstrates to skeptics today that U.S. regime change can take back the government from the corporate moguls.


ENTER, THE THIRD CORPORATE REGIME


32

The New Deal regime survived almost fifty years, profoundly changed the nation, helped enshrine the labor movement as a new force, and redefined the Democratic Party. But it, too, succumbed, as neoconservative radicals in the 1970s spurred a politics of regime change leading to the election of Ronald Reagan in 1980. In Chapter 3, I explore the many reasons for this all-important regime change, as dramatic as the one engineered by Rockefeller and Morgan. As a new generation of robber barons entered into a marriage with the Reaganite political class in Washington, they created a regime whose power is now compared with the Roman and British Empires. It rules not only America but much of the world.33

The third corporate regime is the house we live in today. George W. Bush is just the current master of the mansion. The basic design of this regime was established by Reagan a quarter-century ago.

MEET THE PILLARS OF THE THIRD CORPORATE REGIME


Dominant Institution—The Transnational Corporation

Corporate plutocrats own this house.

Mode of Politics—Corpocracy

Wealthy residents run the house, although all tenants have a vote.

Social Contract—Social Insecurity

Tenants have no long-term lease.

Foreign Policy—Empire

The house rules the neighborhood.

Ideology—The Corporate Mystique

The house claims tenants are free and announces it is open for business.


THE TRANSNATIONAL CORPORATION


34

The foundation pillar of the regime is the transnational corporation, the biggest concentration of cold cash in human history. The companies dominating the regime—giants such as Wal-Mart, General Motors, General Electric, Exxon, Citigroup, Bank of America, Verizon Communications, Phillip Morris, and Microsoft—are wealthier than most countries. Citigroup has total assets of over a trillion dollars, to be precise one trillion, one hundred eighty-seven million!7 Wal-Mart employed 1.3 million workers in 2003.8 General Motors’ annual sales in 2000 were larger than the gross domestic product (GDP) of Hong Kong, Denmark, Thailand, Norway, Poland, South Africa, and 158 other countries.9 Of the 100 largest economies in the world in 2001, 51 were corporations, and only 49 were countries (based on a comparison of corporate sales and country GDPs). Big business has existed under every U.S. regime since the Civil War, but the third corporate regime is creating a world where companies are replacing countries as the superpowers. They make the corporations of earlier regimes look like pygmies.

Two hundred corporations sit at the heart of the regime, led by the Top Ten. These Top Ten alone have assets worth about $4 trillion. That is $4,000,000,000,000! But you’d have to add on GM, Ford, J. P. Morgan Chase, Microsoft, and scores of other behemoths to get the picture. Four trillion dollars is just a fraction of the wealth controlled by the two hundred intertwined giant companies that control the regime.

These firms’ size reflects the rise of a truly transnational corporation, whose unique global character is uniquely

CORPORATE SUPERPOWERS


Here are the Top Ten U.S. Corporations in 2003, ranked by Forbes magazine according to a Super-Index of sales, profits, assets, and market.10 I have listed only assets here.

THE TOP TEN A$SETS
1. General Electric 574,274,000,000
2. Citigroup 1,097,190,000,000
3. ExxonMobil 152,644,000,000
4.AIG 547,295,000,000
5. Bank of America 660,458,000,000
6. Wal-Mart Stores 94,552,000,000
7. Fannie Mae 887,257,000,000
8. Verizon Communications 167,468,000,000
9. IBM 96,484,000,000
10. Altria Group 87,540,000,000
35

threatening for U.S. workers. We have long had global corporations, but never the transnational form of company that—at lightning speed and on a mass scale—can transfer abroad production of virtually every good and service. Not just the size but also the distinctive reliance on foreign labor and the approach to global profits differentiate transnational firms and the third corporate regime from previous incarnations. Today’s corporation has turned “trade” into something quite new: a way to use U.S. capital to employ cheap foreign labor at the expense of American jobs. Trade becomes an internal transfer within the global corporation itself, maximizing profit by uniting U.S. capital and technology with foreign workers unprotected by labor laws or regulations. This inevitably produces the mass outsourcing of jobs that has now exploded into one of the great political issues of our time, and it serves notice that the core economic interests of the third corporate regime will increasingly diverge from the interests of American workers and citizens.36

Two hundred corporations, eighty-two of which are American, dominate the global economy, producing 27.5 percent of the world’s total economic activity. The regime serves the U.S. companies most directly but promotes global trade and investment rules benefiting all the top two hundred. Their combined sales are now greater than the combined economies of all countries minus the biggest ten, and eighteen times the combined annual income of the 1.2 billion people (24 percent of the total world population) living in “severe” poverty.

What do all these numbing numbers mean? For one thing, huge inequality. The top three shareholders of Microsoft own more money than do all six hundred million people in Africa. Bill Gates and Warren Buffet, the two richest corporate moguls, have more wealth than the poorest fifty million Americans. Beyond this, corporations make out like bandits in many ways. The share of federal taxes paid by corporations dropped from 23.2 percent in 1960 to 11.4 percent in 1998.11 In 1998, Texaco, Chevron, Pepsi Co., Enron, WorldCom, McKesson, and the world’s biggest corporation, General Motors, paid no federal taxes at all.12

In the third corporate regime, we are all corporate constructions. We get our dreams and opinions from corporate media such as Fox or Disney; our children’s education is based on curricula provided by Microsoft or AT&T; our food comes from Phillip Morris and Wal-Mart, the world’s largest grocers; our credit cards and mortgages are granted by one-stop superbanks such as Citigroup or J. P. Morgan Chase. Corporations pry away from government anything that is profitable and increasingly deliver our education, health care, social services, and even law enforcement. Everything is for sale since the regime’s purpose is to promote profit above all else.13 37

As they seek to make the entire social order profitable and marketable, corporations are remaking everything in their own image, including government itself. Governments look and act more like companies, and corporations present themselves more as governments. Governments act to protect profits, and corporations speak the language of social responsibility. Business takes on the planning and rule-making roles of government, and government becomes increasingly about money.14


CORPOCRACY


OK, it’s not a pretty word, but it describes an ugly reality. To understand corpocracy, look at George W. Bush’s cabinet, a Who’s Who of corporate America.15


PRESIDENT GEORGE W. BUSH

Former CEO of Texas Rangers and Board of Directors of Harken Energy

VICE PRESIDENT RICHARD CHENEY

Former CEO of Halliburton, Inc., the huge energy and defense conglomerate

SECRETARY OF DEFENSE DONALD RUMSFELD

Former CEO of General Instrument Company and of the drug giant G. D. Searle and Co.

FIRST BUSH SECRETARY OF TREASURY PAUL O’NEILL

Former CEO of Alcoa and of International Paper Co.

SECRETARY OF THE TREASURY JOHN SNOW

Former CEO of CSX, the railroad giant, and Chairman of the Business Roundtable, the leading big business group in America

TRANSPORTATION SECRETARY NORMAN MINETTA

Former Corporate Vice President of Lockheed Martin

LABOR SECRETARY ELAINE CHAO

Former Vice President of Bank of America

AGRICULTURE SECRETARY ANN VENEMAN

Former Board of Directors of Calgene, Inc., a subsidiary of Monsanto Corporation


Bush’s cabinet illustrates the marriage between big business and big government that is the second pillar of today’s corporate regime. Corporations are the senior partners in the marriage, dominating the political class because of their control over election funding and the media and the general triumph of big money over all major social institutions. I call the marriage “corpocracy,” since it represents corporate rule in a constitutional democracy and turns a formally democratic government into a vehicle for corporate ends. To be blunt: call it “pseudo-democracy”

Give due credit to Reagan for this second pillar. Despite Reagan’s rhetoric that “big government is the enemy,” he hugely expanded the vast, unaccountable federal government, a body so entangled with big business as to be indistinguishable from it. Reagan’s cabinet of former CEOs, like Bush’s, functioned as a Board of Directors for corporate America. True, Reagan dismantled much of the government created by the New Deal regime in the name of returning power to the people and the states. But he simply shifted government control and resources in a new direction. The system annually funnels billions of dollars in subsidies to corporations, whose financial power dominates the president’s cabinet and congressional cloakrooms.38

THE REGIME AND MAD COW


After a “mad cow” was discovered in the United States, in December 2003, Alisa Harrison, the spokesperson for Agriculture Secretary Ann Veneman, told the American public not to worry—American beef is safe. She didn’t say that she used to be public relations director of the National Cattlemen’s Beef Association. In fact, the Department of Agriculture, which is supposed to protect the public from mad cow disease and other health risks, is packed with cattle and former ag-business lobbyists. Dale Moore, who is Veneman’s chief of staff, was previously chief of staff for the National Cattlemen’s Beef Association. And another high-ranking Department of Agriculture official used to be president of the National Pork Producers Council.16

39

Corpocracy works like a Las Vegas slot machine, but one with a surefire chance of winning. Take the pharmaceutical industry as an example. In 2000, the industry put millions in the Washington slot machine to help reelect Bush.

THE CORPOCRACY GAME

RULES FOR DRUG COMPANIES


  1. Give Bush $21 million during his 2000 campaign.
  2. Spend $100 million in contributions, entertainment, and lobbying of Congress between elections (2000–2004).40
  3. Use 467 lobbyists on the Hill to pressure representatives and draft the Medicare Overhaul Bill, which returns billions in new profits to pharmaceutical companies.
  4. Spend $100 million in 2004 to reelect the president and make sure that the new Medicare program delivers the goods.17

Of course, the game is not played just by pharmaceuticals. With all corporations pulling together, it’s even more fun and profitable.


RULES FOR ALL CORPORATIONS


  1. Give Bush $2 billion during his 2000 campaign.
  2. Get back $300 billion in corporate welfare.
  3. Draft the laws on energy, trade, media, pharmaceuticals, and health care.
  4. Laugh all the way to the bank with a trillion-dollar tax bonanza.
  5. Spend $3 billion in 2004 to reelect the president.

image

The industry then used its lobbyists in the House of Representatives to draft the huge Medicare overhaul bill passed in 2003. Yes, you’re right, this bill prevents government bulk purchasing of pharmaceuticals, which might reduce prices and drug-company profits. And it will privatize Medicare, adding billions of dollars in profits to HMOs and private health insurers. And for good measure, the industry will give millions more in 2004 to help reelect the president and ensure the profits go where promised.41

The New Deal remade government to serve and empower ordinary people, but today’s regime is turning American democracy into a system of corporate sovereignty, creating a massive divide between rich and poor in political power as well as wealth. Corporations control the political agenda of both parties, and money washes away the people’s voice. Citizens became consumers and couch potatoes, spectators of the show in Washington or indifferent to it. Workers like David Billingsly lose their voices and, increasingly, their jobs.42

Just as troubling to a functioning democracy as classic quid pro quo corruption is that danger that officeholders will decide issues not on the merits or the desires of their constituencies, but according to the wishes of those who have made large financial contributions valued by the officeholder.


U.S. SUPREME COURT, in a 2003 decision upholding campaign finance reform


SOCIAL INSECURITY


The regime is systematically dismantling the social contract of the New Deal that promised social security to a generation traumatized by the Depression. That contract was expensive and protected people by regulating corporate excesses. The current regime seeks a new social contract—its third pillar—that trades the social security of workers and citizens for profit maximization.

Social insecurity begins with the job. The regime now aims to abolish the very concept of a job, the secure full-time form of work that prevailed in the mid twentieth century but now is seen as an unacceptable limit on profits. “What is disappearing,” writes organizational analyst William Bridges, “is not just a certain number of jobs—or jobs in certain industries ... but the very thing itself: the job. That much sought after, much maligned social entity, a job, is vanishing like a species that has outlived its evolutionary time.”18

Jobs that survived in the new regime lost their government or union protections. This required all-out assault on the New Deal Wagner Act, which enshrined unions, and President Reagan was up to the task. The regime wasted no time in busting unions, with Reagan’s first act being the dismantling of PATCO, the air traffic-controller union. Reagan then began what is now a long-standing regime policy of breaking unions: he made anti-union appointments to government labor boards, encouraged companies to break union contracts and demand concessions, and facilitated the ultimate corporate weapon against labor, exit power. As companies under the new regime fled overseas for cheap labor, aided by Reagan’s tax breaks for companies operating overseas, massive downsizing became the regime’s signature. Thus, the regime created the breed of contingent and outsourced jobs that has turned America’s “middle class” into an “anxious class.”43


MEET ALLEU MARDSDEW

In my interviews I talked to -many downsized and outsourced workers. Allen is a forty-year-old software engineer freelancing for computer companies in the United States and living in Boston. Allen told me that his father “was a salesman for an electrical company, and he worked for the same company his whole life.” But Allen, although well educated with graduate degrees in business and accounting, has worked “for about forty companies,” and, he says, “Fifty percent of the employees on the payroll are temp or contractors like me. The companies don’t want to pay benefits, and they’re greedy.” Allen claims his father’s era is finished, and Allen does not expect to ever get a permanent job.

By stripping away the protections and security of the New Deal job, the current regime is endangering the middle class. Allen declares flatly: “The middle class is disappearing.” Like David, the despondent accountant profiled earlier, Allen says his own American Dream is shrinking. “Lots of things I thought I was going to have I may never have. I may never own a home. I may never marry, and I definitely will not have children.” Allen is thinking not just of his own difficult economic circumstances but of his brother and sister-in-law, who have four children and are not making it. His brother has been downsized twice out of well-paying corporate jobs. Allen says, “My brother is on his second wife and was never in a position to afford even one.” 44


In a transnational corporate regime, corporate globalization becomes the ultimate hammer for beating down U.S. job protections and security in the name of “free trade.” But, as noted earlier, “trade” has become simply a vehicle by which U.S. transnational companies use American capital and technology to employ foreign rather than U.S. workers, outsourcing jobs and using the threat of future outsourcing to erode the benefits, protection, and security of the American worker created by the New Deal regime. The U.S. social contract is dragged down toward the horrendous social contract that has long prevailed in Third World countries, thereby globalizing the third corporate regime’s social contract on terms that favor the transnational corporation at the expense of workers in both rich and poor countries.

Along with the loss of secure jobs and benefits, a horrendous social contract emerged from the slash-and-burn approach to the New Deal social welfare system. Reagan started the process by taking a sledgehammer to domestic social spending, arguing that the New Deal’s welfare system undermined the entrepreneurial spirit at the heart of the new regime. He bled nearly every domestic program—education, health care, food stamps—to finance his huge tax cuts for the rich and his bloated military spending.45

Reagan’s social policies continued under Bush, Sr., and into the Clinton years, when Newt Gingrich spearheaded the Contract for America, which proposed cutting nearly all social spending and leaving a government devoted entirely to corporate welfare and the military. Clinton did his part by calling for “the end of welfare as we know it.” Clinton targeted one hundred thirty federal programs for extinction, many for education, scientific research, or the environment, and he proposed to abolish or radically downsize the Department of Housing, the Department of Transportation, and other agencies devoted to social ends. One Washington observer noted, “You expect to see Republicans when they are in power doing this—it’s what they’ve been pushing for years. But to see the Democrats doing it, and to see the competition between the White House and the Congress as they race to privatize—it’s amazing.”19

Bush is pursuing the regime’s social contract in yet more brazen ways, openly promoting permanent tax cuts for the rich worth trillions of dollars while underfunding virtually all vital social programs, including his own touted education act, “Leave No Child Behind.” In Chapter 7 I describe Bush’s “war at home”—his assault on the social needs of ordinary Americans—which rivals the fierceness of his war on Iraq. Let it suffice to note here the regime’s contract of Social Insecurity is moving, under Bush, toward its ultimate conclusion: privatizing and ultimately eliminating Social Security itself. The collapse and scandals of the financial markets postponed Bush’s plans until his second term, but he proposed privatization in his 2004 State of the Union address, and his advisors are candid that they remain committed to privatizing Social Security and turning it from a scheme of social insurance into a private system of investments. That system not only threatens the retirement security of millions of lower- and middle-income Americans but also guarantees a multibillion-dollar bonanza for the Wall Street managers who are salivating about the profits to be made on your retirement money and mine.46


EMPIRE


As it revolutionizes life at home, the corporate regime is bent on transforming the rest of the world, distinguishing itself from the corporate regimes of the Gilded Age and Roaring Twenties. The foreign policy aim of the current regime—its fourth pillar—is to shape a global corporate order under the political and military direction of the United States. That aim reflects the globalization of the economy, the increasing dependency of American corporations on profits abroad, the post-World War II collapse of the European empires, and intractable global crises that require military solutions. These elements combine to create a militarized corporate system, breeding a new form of empire and a system at home eroding classic American civil liberties.

Empire has a long American history, but the current regime is pulling out all the stops, dismantling much of the multilateral framework and the system of international law created under the New Deal. Remember that Roosevelt helped create the United Nations, and his regime successors, such as Truman and Eisenhower, pursued global power with some deference to multilateralism and U.N. conventions. Reagan was impatient with international treaties and other multilateral restraints on American power. He rejected the entire New Deal international framework, openly expressing contempt for the United Nation, arms control, and restraints on military spending. The new regime’s corporate patrons encouraged Reagan’s inclination to use American power unilaterally, including efforts to change regimes throughout Central America and elsewhere in the Third World, to open the world up to their own global greed.47

President Bush has simply accelerated the regime tendencies begun under Reagan and pursued more quietly under Bush’s father and Clinton. Maintaining Reagan’s disdain for international law and his fondness for interventions and regime changes abroad, Bush has used the post-9/11 climate mainly to institutionalize these long-standing regime policies in an even more transparent model. Former White House advisor William A. Galston described the regime’s current approach in its more extreme form: it “means the end of the system of international institutions, laws and norms that the U.S. has worked for more than half a century to build.”20 Princeton political scientist Richard Falk, one of the nation’s leading scholars on international law, writes that the preemptive invasion of Iraq “repudiates the core idea of the United Nations charter. … It is a doctrine without limits, without accountability to the U.N. or international law.”21 48

While the United States remains a constitutional system, the current U.S. regime already involves military expansion in the name of a war against evil, a fevered culture of patriotism and resurgence of religious nationalism, a system of growing repression and secrecy to protect “national security,” the rise of a Homeland Security Department and a culture of surveillance, a weakening of traditional checks and balances, integration of corporations and the military, and the rise of a master ideology and political culture organized around “spin” and deception. These tendencies have been most developed by the Bush administration but are consistent with the regime’s enduring aims of global dominance. They have raised serious alarms not just among liberals, but among many conservatives, from former Nixon advisor Pat Buchanan to the international financier George Soros, who see the specter of an Orwellian future. It is easy to see their point.49

HAVE YOU HAD THIS EXPERIENCE?

While driving in Boston recently, I saw a big, official-looking sign posted on the back of a city bus. It showed images of duct tape, flashlights, and water bottles, and it featured a face with a large eye looking right at me. The sign read, “Help everyone be safe by keeping your eye on the system.” I felt a chill run down my back as I realized the sign was really saying, “Keep an eye on your neighbors,” a Homeland Security directive right out of Orwell’s 1984.


THE CORPORATE MYSTIQUE


Free markets! Free trade! Free people! Free Iraq! Free world! Free after-Thanksgiving sales! Freedom is the seductive mantra of the third corporate regime. Most Americans buy it.

Liberty, of course, has always been at the heart of American ideology. What is new is a rhetoric of freedom for all that translates into unimagined freedom for big business, and big problems for the rest of us. The expansion of freedom for the First Citizens of this regime (that is, the corporations) is now equated with personal freedom. When we increase the freedom of corporations to speech or privacy, we increase our own. If we limit corporate free speech by limiting corporate campaign contributions, we threaten the cherished First Amendment speech rights of citizens.

It is all part of the corporate mystique, the regime’s ideology telling us that a “free market,” based on unfettered corporate liberty, is the best of all possible worlds. The mystique says there really is no other way. The market’s freedom is the cornerstone of every citizen’s freedom, and a free corporation is the precondition to a free society. The corporation is the golden goose, but it needs free range. When freed to do what it wants, it delivers the goods. If we shackle it, we shackle ourselves and our prospects for the good life. Kill corporate freedom and we kill off democracy.

The mystique, while rhetorically embracing personal liberty, in truth nourishes one form of personal freedom: the right to splurge at the mall. Consumerism! It is the highest form of freedom in the corporate mystique, and the regime encourages us to use our plastic cards to keep consuming long after we can afford to. Consumerism replaces citizenship as the operative value in the regime. I buy, therefore I am. I am what I buy! 50

The freedom dreamed of by the Founders is at high risk. Citizen choice in this regime is the right to decide between Coke and Pepsi. The regime argues that choice at the marketplace is the most powerful act of citizenship. One dollar, one vote. That is the democracy of the corporate mystique.

The regime then gets away with its frightening restraints on personal civil liberties, symbolized by the notorious Patriot Act. Citizenship is redefined as freedom in the mall, not the town hall. A corporate regime is seductive since we grew up as kids addicted to magical corporate goodies, whether Disney films or PCs. Creature comforts are the great blessings of the regime, and they are not easily dismissed by anyone, especially a population brought up on Toys ‘R Us and wild about Big Macs. How can you challenge the producers of the Magic Kingdom, who have brought you happiness your whole life? How can you challenge the makers of Mickey Mouse, your best friend for life?

The corporate mystique, and its consumerist brand of democracy, was born in the first corporate regime and turned into a national religion in the second corporate regime of the Roaring Twenties. But in the earlier corporate regimes, leading ideologues were busy enough persuading the ordinary American to embrace the corporation and get serious about consuming. Now they have to persuade the rest of the world. Globalization is the spread of the corporate mystique as the universal religion of the planet, and it is the cutting edge of the third corporate regime’s ideology. 51

One of the chief ideologues of globalization, New York Times columnist Thomas Friedman, writes that “So ideologically speaking, there is no more mint chocolate chip, there is no more strawberry swirl, and there is no more lemon-lime. Today, there is only free-market vanilla.”22 Nobody puts the regime’s line better than Friedman. Corporations are not good and necessary for the happiness only of Americans but of everyone in the world. And even if you don’t like it, you better learn to, because the train is out of the station and can’t be turned around. “I feel about globalization a lot like I feel about the dawn. Generally speaking, I feel it’s a good thing that the sun comes up every morning.... But even if I didn’t much care for the dawn there isn’t much I could do about it.... I’m not going to waste my time trying.”23

This is the corporate mystique as God’s way. The regime aims to make everyone on the planet a believer.


THE SIX REGIME SINS


Six trends have hit the headlines under Bush that reveal the long-term basic aims of the larger regime. If the pillars of the regime create the design of the “house,” these sins are the design flaws that will lead to its inevitable destruction. We have here a mansion with a luxurious upper floor and a deteriorating foundation. Even as the architects are busily expanding the mansion, walls are crumbling, plumbing is rusting, and the roof is leaking. All these things hint that the regime, or political house, is beginning to implode and decay.52


1. Hooverism Redux

Bush is the only American president other than Herbert Hoover to preside over a net loss of jobs in the economy, at this writing 2.6 million of them. The mass loss of full-time unionized manufacturing jobs, along with long-term wage stagnation and the relentless stripping of overtime, pensions, health care, and other benefits, has been a defining feature of the regime for the past quarter-century. As it did under Hoover, the regime trusts in business as it moves the country and the world toward a speculative financial capitalism, chronic macroeconomic instability, erratic growth, and potential systemic deflation or depression. In this sense, Hooverism is the economic Achilles heel of every corporate regime, expressing itself now in global deregulation, overproduction, and financial instability.


2. The Red Shift

One of the key signs of systemic erosion is the scary red shift in the national accounts. Reagan led the way when he cut taxes and increased military spending, creating huge new debts. The Bush administration has created the biggest budget deficits in American history, amounting to $378 billion in fiscal year 2003 and projected to be almost half a trillion dollars the following year. The current Bush deficits are bigger, as a share of GDP, than those of Argentina when it melted down in 2002. Combined with massive trade deficits, the budget deficits put into serious question the fiscal credibility of a country depending on Japanese, German, Chinese, Saudi, and other foreign investment to finance its multitrillion-dollar national debt. The regime’s priorities of high military spending, giant corporate subsidies, and enormous tax cuts ensure growing long-term debt. Bush pushes tax cuts, military spending, and deficits to the limits, thereby endangering the health of the economy and the regime he represents.24 53


3. Reverse Robin Hood

Every corporate regime is Robin Hood in reverse. The deficits from Reagan to Bush, Jr., grew out of manic tax cutting to achieve the corporate regime’s main aim: transferring wealth to the rich. Trumping Reagan’s, Bush’s successive income tax cuts, projected to amount to several trillion dollars over the coming decade, are the most spectacular giveaway to the rich in American history. The top four hundred families, under Bush, gained the highest percentage of national income in more than half a century; the top 1 percent of the U.S. population control 40 percent of the wealth, their biggest slice of the American pie since the 1920s.25 During the first twenty years of the regime, “the gap between rich and poor more than doubled from 1979 to 2000.... The gulf is such that the richest 1 percent of Americans in 2000 had more money to spend after taxes than the bottom 40 percent.”26 Between 1973 and 2000, average real income of the bottom 90 percent of Americans fell 7 percent. The top 1 percent saw their income rise 148 percent, the top .1 percent had a 343 percent income rise, and the top .01 percent had a 599 percent income rise.27 America looks increasingly like Third World economies made up of corporate aristocrats and paupers.54


4. Good-Bye, Social Welfare, Hello, Corporate Welfare

Bush has accelerated the regime’s twenty-five-year trend toward brutally cutting social services—including education, Social Security, and health care—privatizing the shrunken remains, and redirecting federal savings to corporate welfare such as farming subsidies, mining and timber giveaways, research and development breaks and subsidies for big pharmaceuticals, depreciation breaks, and huge contracts to military companies. By the mid 1990s, according to the conservative Cato Institute, the regime was already spending approximately three hundred billion dollars a year on corporate welfare, reflecting the cronyism at the regime’s heart.28 The biggest service cuts and corporate welfare are still to come, laid out in the Bush administration’s plans to privatize Social Security, Medicare, and the other programs at the heart of the New Deal. The Bush plan will turn over billions to the Wall Street houses that invest the new privatized retirement accounts, and to the health care companies that take over administration of Medicare, thereby undermining the retirement nest egg and key health care needs of most Americans as they age. But the war at home does not discriminate against the elderly; young people are the fastest growing group of poor in the twenty-five years of the regime, reflecting ever deeper cuts in education, child care, and welfare.29 55


5. Corporate Constitutionalism

Rewriting the Constitution to protect corporations rather than people has been a dominant theme of corporate regimes since the Gilded Age. Under the First, Fourth, Fifth, Sixth, Seventh, and Fourteenth Amendments, the Supreme Court has been extending constitutional protections to corporations, securing the corporate right to spend literally billions of dollars, through political action committees (PACs) and “soft money,” on political campaigns and Washington lobbying, immune from public scrutiny. In the Reagan years, this was the perfect breeding ground for the savings and loan scandals and for huge corruption in the Pentagon and other government agencies. Today, the rash of Enron accounting scandals, Putnam mutual fund fraud, and Wall Street currency trading scandals reflect the same regime tendencies that weaken regulation and corporate accountability. Bush’s new frontier involves coercively exporting legal protection for corporations to the rest of the planet under the auspices of the World Trade Organization (WTO), which encompasses in its trade rules a planetary version of inviolable corporate rights in the name of free trade, development, and the war against terror.3056


6. Global Imperialism

The United States has been expansionist since its beginning, but the third corporate regime has been the most imperialist and militarist on a planetary scale. Reagan massively built up the military and the military-industrial complex and engineered multiple regime changes abroad—most famously in Nicaragua, Grenada, and other Central American countries— in the name of anti-Communism. While his backers claimed that Reagan’s policies created regime change in the Soviet Union itself, the Soviet Union, much like the Roman Empire, crumbled from within mainly because of its own corruption and inefficiency. After the Soviet meltdown, Bushes I and II both warred in Iraq to create a world order run solely by the United States. A long-standing regime aim is to integrate the petroleum reserves in the Middle East and elsewhere; the overarching goal is to increase the global profitability of American firms by preventing the rise of rival empires or trading blocs. Geopolitics and planetary greed meld in the new military-corporate regime, which now justifies its global imperialism in the name of a permanent war on terrorism.

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