Michael Hudson and Jeffrey Sommers: Wisconsin Death Trip

Wisconsin Death Trip
By MICHAEL HUDSON and JEFFREY SOMMERS
Counterpunch

...

Economics textbooks, along with Fox News and shout radio commentators, spread the myth that fortunes are gained productively by investing in capital equipment and employing labor to produce goods and services that people want to buy. This may be how economies prosper, but it is not how fortunes are most easily made. One need only to turn to the 19th-century novelists such as Balzac to be reminded that behind every family fortune lies a great theft, often long-forgotten or even undiscovered.

But who is one to steal from? Most wealth in history has been acquired either by armed conquest of the land, or by political insider dealing, such as the great US railroad land giveaways of the mid 19th century. The great American fortunes have been founded by prying land, public enterprises and monopoly rights from the public domain, because that's where the assets are to take.

Throughout history the world's most successful economies have been those that have kept this kind of primitive accumulation in check. The US economy today is faltering largely because its past barriers against rent-seeking are being breached.

Nowhere is this more disturbingly on display than in Wisconsin. Today, Milwaukee – Wisconsin's largest city, and once the richest in America – is ranked among the four poorest large cities in the United States. Wisconsin is just the most recent case in this great heist. The US government itself and its regulatory agencies effectively are being privatized as the "final stage" of neoliberal economic doctrine.

A peek into Governor Walker's so-called "budget repair bill" reveals a shop of horrors that is just the opposite of actually repairing the budget. Among the items listed in the bill until Wednesday night were selloffs of state power generation facilities – in no-bid contracts notoriously prone to insider dealing.

The 37 facilities he wants to sell off that produce heating and cooling at low cost to the state's universities and prisons. Walker's budget repair bill would have unloaded them at a low price, presumably to campaign contributors such as Koch Industries – and then stick the bill for producing this power at higher rates to Wisconsin taxpayers in perpetuity. (And this is all being sold as a "taxpayer relief" plan!) Invariably, this will make its way into new legislation once attention is diverted from the current controversy.

The budget bill also plans to tear down the Wisconsin Retirement System (WRS). This is not New Jersey, where a succession of corrupt governments have underfunded (read: stolen) the state pension system in order to shift resources to pay for budget shortfalls in general revenues caused by tax breaks for the rich. The WRS is one of the nation's most stable, well-funded and best-managed pension systems. Although Wisconsin is not a big state, the WRS has amassed $75bn in reserves, and pays out handsome pensions to its public retirees, without needing new public subsidy. The Walker bill has language providing for tearing down this system, raiding its assets to pay for further tax cuts for the rich (especially property owners), and then throwing Wall Street a meaty bone as public employees would be shifted to 401k plans handled by money managers on commission.

In a separate proposal, Governor Walker would start privatizing the University of Wisconsin's two flagship doctorate-granting campuses. Ironically, the land grant universities – of which Wisconsin has long been among the best – were created by protectionist 19th-century Republicans as an alternative approach to British free-market doctrine, which dominated the prestigious and largely anglophile Ivy League universities. These universities, like their German counterparts, taught a new economic policy of state management and public enterprise that formed the basis for subsequent US and German development.

Walker would kill off this tradition, and return intellectual production to the highest bidder.

Other proposals suggest selling off Wisconsin's public northwoods lands with their cornucopia of mineral and timber wealth. And much more is said to be in the works.

So Walker's war is not only against the Democrats and labour, it is against Wisconsin's Progressive Era institutions. His policy threatens to pauperize the state and deal a coup de grace to Progressive Era institutions and impoverish the state's middle class. Contra John Maynard Keynes's gentle suggestion of "euthanasia of the rentier", it is the middle class that is being euthanized – throughout North America and Europe.

To Read the Entire Essay

Rachel Maddow: Gov. Scott Walker Has Faked a "Budget Crisis" Before

John Nichols: Socialism? Not Quite, Say the Socialists

Socialism? Not Quite, Say the Socialists
by John Nichols
Common Dreams

...

What seriously surprises her is that the health-care reform legislation that's been passed by Congress would be characterized by anyone who knows anything about economics or politics or history as "socialist."

"I'm afraid it's not socialized medicine," she says of the plan, which maintains private health-insurance companies, pharmaceutical companies, hospitals and nursing homes - most of which saw their stock values rise after the legislation was enacted.

Indeed, the Socialist Party stands in opposition to President Obama's approach.

"This is not a healthcare reform bill," says Socialist Party USA co-chair Billy Wharton, "It is instead a corporate restructuring of the American healthcare system designed to enhance the profits of private health insurance companies disguised with the language of reform"

As the Socialists note:

The bill passed by the House (March 21) would mandate all Americans to purchase health insurance coverage or face a fine. It would also create health insurance exchanges, an idea crafted by the right-wing Heritage Foundation, where people would purchase insurance from private companies. Those not eligible for Medicaid but who still could not afford to purchase insurance would receive public funds from the federal government to purchase bare bones coverage insurance plans from private insurers.

(Socialists) opposes this restructuring on the grounds that the mandates allow private insurers to use the coercive power of the state to enhance their private profits. Insurance credits will serve as a public subsidy to private companies. It is yet another case of public money that could be used for necessary social programs being funneled towards companies that engage in practices that are abusive and detrimental to the overall society.

Wharton argues, as would any self-respecting Socialist, that "public funds would be better spent in creating a national single-payer system. Democratic socialists see such a system of open access to care as one part of a larger transition toward making health-care a guaranteed human right for all."

That's a far cry from anything the Democrat in the White House has proposed. Indeed, as Wharton wrote in his recent Washington Post piece -- titled "Obama's No Socialist. I Should Know" -- "The funny thing is, of course, that socialists know that Barack Obama is not one of us. Not only is he not a socialist, he may in fact not even be a liberal. Socialists understand him more as a hedge-fund Democrat -- one of a generation of neo-liberal politicians firmly committed to free-market policies."

So Myrtle Kastner is amused, and perhaps a little thankful to Limbaugh, Beck and the others who keep talking about "socialism." She's hoping that young people, in particular, will want to learn more.

And what will she tell them?

"I know they call Obama's plan ‘socialist,'" says Kastner. "But if the point is to make sure everyone has health care and that costs are kept down, Socialists really could have come up with something better."

To Read the Entire Article

More:

Bill Wharton: Obama's No Socialist, I Should Know