Monday, October 17, 2011

Wall Street Response: Occupy Obama? Dump the GOP/Tea Party?

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Wall Street may dump the GOP and support Obama and the Democrats. Sound odd?

While activists occupying Wall Street may have started a social movement that might take over the Democratic Party, something else is going on. Events in the Republican camp might complicate things.

Some may point out that Obama is already occupied by Wall Street given his appointments and his very soft line on the banks protecting them from mass loan modifications, and avoidance of fines and criminal penalties for the financial industry for its fundamental part in crashing the economy. This idea certainly has strong merit to it.

But something more significant, more fundamental is afoot. A political sea change may be coming.

The Tea Party influence in the Republican Party is large. Romney, a moderate, is having a hard time getting any momentum going. Romney, the corporate candidate is seen to be part of the “system” which encompasses both Republicans and Democrats

If a Tea Party candidate or a candidate strongly influenced by the Tea Party becomes the official party candidate for president, big business may look elsewhere for a candidate.

Tea Party far right views are unacceptable to Wall Street and the Fortune 1000.

Even though this movement stands for low or no taxes for business and no regulation which greatly appeals to the corporations, at the same time, the Tea Party is stunningly ignorant on other economic and financial matters.

The far right is against central banking, the Federal Reserve. It has no concept of fiscal policy designed to manage inflation or interest rates. The fact that the Fed actually manufactures money is seen as a sin, as a form of counterfeiting. Bernanke has been described as a “traitor”. And the policies of the central bank are seen as a form of magic and mysticism.

Many Tea Party members support a gold standard which is not practically possible because the US does not actually have enough gold to be redeemed in a mass way. In addition, implementation of a gold standard would encourage individuals and companies to horde gold and not invest in economic expansion, turning a stagnant recession into a quick plunge into depression.

Further, the far right, as shown in summer federal budget negotiations, has no concept of a national credit rating. Tea Party representatives railed with glee about government shutdown and gridlock. It would seem they had no grasp on the concept that a lower credit rating for the US would mean more economic malaise for the nation, and that some self limitation of personal behavior was in order for the good of the country.

Issues like the strength of the dollar and treasury bond rates also seem to be beyond them.

Moreover, the Tea Party has not yet grasped that we live in a Global Economy – that what we do has an effect on the world, and what other countries do has an effect on us.

In short, the Tea Party could crash the domestic economy quite quickly with is ineptitude. And hasten a new world economic order in which the US has little influence and the US dollar and bonds are marginalized.

The problem with this political culture is that it has no concept of a whole or system and its necessities.

The Tea Party only sees a world of many individuals, that is, small businesses. It cannot fathom that there are larger, centralizing institutions that must coordinate the disparate community or there will be Chaos -- that one must manage money, interest rates, economic growth, inflation, deflation and more, and taxes are necessary to fund these institutions. There are issues that appear on a higher level that do not on a local and individual level.

Tea Party economics is Microeconomics on the smallest scale. It is a micro-paradigm of a disconnected small business person who lives in a lonely world of competition, buying, selling, production, managing employees and so on. This is the psychology and culture of individual ownership.

Small business exists in a high pressure world where taxes are enormous, material costs are too high, credit is expensive and where there is a lot of competition that drives down pricing. Industry at this scale is without the benefits that big business enjoys – the power of monopoly pricing, comfortable credit terms, stunning tax loopholes, broad marketing and advertising, influential lobbyists.

In a major recession, negative emotions grow -- fear, desperation, anger. These are directed at “bigness”, at government, at institutions, at organization in general, at hierarchy, at centers, at leaders, at community, at the globe. 

In the hyperbole of distance all things are mythologized, exaggerated, demonized. In this view there is little understanding of government services, central banking, fiscal policy, the role of financial institutions, a global economy etc. -- but a great deal of resentment toward these. 
Further, the extreme individuality of the far right, having long ago passed out of healthy individuality, provides a perfect simplistic framework to understand the world – disconnection and sectarianism. All links, organization, centralization, wholes and their necessities, obligation, relationship, agreement, reciprocity, compassion and empathy are bad. Any idea or emotion that takes one out of a self absorbed orbit is rejected. This anti-social, extreme, unhealthy individuality dispenses with “sociality” entirely, and pursues a notion of individuality that actually reduces the horizons for the citizen – when a combination of individuality and sociality would be far more beneficial to each citizen and the whole of society too.

The political program of this behavior becomes nihilism and destruction, the breakup of government and everything else – the privatization of public schools, selling off roads to toll companies, forming a mercenary military, selling off national forests and government land, deregulation of the nuclear power industry, complete deregulation in general, the end of social benefits etc. – in short, the creation of 21st century version of a nightmare Charles Dickens’ world of universal exploitation and misery.

The ultimate result is a world of no government and complete privatization. The Tea Party is hypnotized by the idea of profit, cash and capitalism, it seeks the conversion of all social activity into business – public education, charity and perhaps even church. People have learned that we live in a human word of multiple values and thus we will need multiple institutions, the reduction of all to one institution does not work – whether it be church, capitalism, state, media or something else. The mantra of the EBITDA which numbly reiterates the holy path of profit-making enterprises substitutes commerce for all Human values, and as a result this will make us less than Human – because we cannot reduce art, spirit, knowledge, creativity, charity, nature, health, equality, justice, family and community to money.

We do not know what Adam Smith had in mind when he wrote the Wealth of Nations, but this movement to expand the wealth of nations by reducing the Wealth of Humanity represents a cynical turn for a wing of capitalism, as it gropes for new horizons to exploit.

Total privatization may be appealing to corporations that might want to buy up our highways and schools and mountains and forests at a Tea Party fire sale. However, the price they would have to pay to receive this would not be worth it. Along with a mother lode of government institutions and property would be attached the inevitable mismanagement of the national economy.

Deregulation, No Taxes and Privatization are appealing but may not be enough to sell the Tea Party to Wall Street.

Also, consider that corporate America has a greater stake in the world in this decade, more than ever before. US investments in developing countries are enormous, and for some major businesses, almost 50% of income is derived from international production.

International economics is highly important. This means a national economic policy to keep up the value of the dollar is important to maintain the investing power of US corporations. And connected to this is defending the credit rating of the nation to keep down interest rates on treasury bonds, to prevent them from descending to a junk bond status.

More, the entangling of US companies with foreign firms demands a radical shift to a mindset of diversity and multiculturalism. The old days of US domination are waning because US businesses now need partners, equal partners that is.

A governing party at home that proudly displays its streak of bigotry and ignorance of global affairs will become more than an embarrassment, it will impede policies that are good for global investment and trade, and for the sake of prejudice shrink our standard of living so that we keep to the primary goals.

Wall Street may have to swing to the left in the 2012 election to avoid a catastrophe, because the right, its traditional home, may have been taken over by economic incompetents.

And what a confusing situation this might create.

As Occupy Wall Street shows, a militant left is struggling to initiate a movement that can achieve ascendancy in the Democratic Party. At the same time, Wall Street, ironically, may be forced to join the Democratic Party, which would bring even more influence and control over party leaders. One occupation calls forth another.

So in 2012, if Wall Street backs Obama, we may see the demise of both the Republican and Democratic Parties: A major schism in the Democrats, and seizure of the vacated Republican Party by the Tea Party and then its inevitable, fanatical, rude insignificance.

And we might see America divided into three ideological trends: Far right (Tea Party), militant left (Occupy Wall Street), and corporate ideology ranging from moderate Republican (Romney) to conservative Democrat (Obama), which frankly look more and more alike.

So, something to think about…

Cage Innoye

 File:Day 2 Occupy Wall Street Sign 2011 Shankbone.JPG

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