gracchusdixit

Yesterday, the French people voted to elect their next President.  The French electoral system is complicated.  There were eight candidates in the race, and no single candidate won an absolute majority.  So, there will be a second, run-off election, the outcome of which is far from certain.  Nonetheless, the public opinion polls suggest strongly that the French may turn out the conservative, Nicolas Sarkozy, whose “reforms” have thus far failed to revitalize the French economy in the wake of the global financial collapse, and elect a socialist, Francois Hollande, in his place.

Hollande has vowed to raise both personal and corporate tax rates, to restore the social safety net that Sarkozy scaled back, and to renegotiate the treaties which have given substantial control over the French economy to a variety of international financial institutions like the European Central Bank.

Whether Hollande will actually do any of these things if he is elected, remains to be seen.  But the prospect terrifies the financial markets and has created an avalanche of apocalyptic commentary from pundits in the United States, the United Kingdom, and the European economic and political establishment.  If the French elect a socialist, their decision could embolden other European or Latin American countries to do the same.  And that, of course, would be very bad for business.

The critics say that the French are living in a fool’s paradise.  They argue that the French welfare state—which protects unions and employees, guarantees retirement benefits, provides universal and free education, and has created what most observers believe to be the best health care system in the world—is unsustainable.  They claim that the pace of French economic growth is too slow, and the scale of French debt is too high.  The French, according to their critics, must face up to reality and change their way of life.  That way of life, they say, must become more “Anglo-Saxon” if the French expect to compete and thrive in the global economy.

But the French people aren’t so sure.  There is a genuine “left” in France rather than the tepid brand of “liberalism” that exists in the United States.  Hence, the French people are asking fundamental questions of their political leaders, which seldom arise in our own political debate.

They are asking, for example, why democratically elected governments should be made to do the bidding of the banks, the markets, and unelected financial elites.

They are asking why French citizens should be compelled to surrender hard-won rights in order to enrich rootless corporations and their shareholders.

They are asking why the wealthy should be allowed, even encouraged, to avoid taxation by moving their money to safe havens like Switzerland, Liechtenstein, or the Cayman Islands.

They are even asking whether the entire system of global capitalism is worth defending, let alone saving, when it cannot provide a decent and secure livelihood to ordinary men and women, all the while its endless pursuit of profit ships jobs offshore and drives down wages at home.

Of course, France is not the United States, and perhaps the French are in fact living in a fool’s paradise.   But at least they seem to understand the kind of paradise they want to live in.   After all, it was the French, not the American, revolution that beheaded a king, threw out an oppressive aristocracy, and threw off centuries of subservience to the privileged and the powerful.   Perhaps, two centuries later, it is the French who are once again asking the right questions.

The recent brouhaha over the ruling of the Obama administration that religiously affiliated institutions provide to all their employees the health insurance benefits required by law—including birth control—has been labeled by Republicans as an “unprecedented” violation of the religious freedom guaranteed by our Constitution.  This charge might well be troubling—if it were true.  But it isn’t true.  It is a blatant and deliberate distortion of the facts.

There is, to begin with, nothing “unprecedented” in the original requirement or in the “compromise” that followed it   This stipulation merely reflects laws that are already on the books in more than twenty states—laws which are altogether reasonable and have been accepted as such for years.  These laws do not require priests or pastors, churches or synagogues, to condone contraception or any other form of birth control they may object to.  If Catholics or evangelical Protestants or anyone else choose not to use this kind of coverage, that is, and always has been, up to them.  Neither existing laws nor the new ruling affect the freedom of religious practice in the least.

The more serious distortion, however, lies in the way Republicans twist the meaning of the phrase, “religious freedom”.  The Constitution mentions religion exactly twice, and it is unmistakably clear from these references that our Founding Fathers had two sorts of religious freedom in mind:—freedom “of” religion and freedom “from” religion.

The Sixth Article of the Constitution states that “no religious test” shall ever be imposed as a qualification for holding office or a public trust.  Religion, in short, is to have no place in deciding who governs our country or how it is governed.

The First Amendment guarantees a number of fundamental rights, one of which is the right of all Americans to practice religion as they wish.  Another is the right to be free from any “established” religion.  Individuals, in short, are free to believe whatever they choose, but government has no right to enshrine a particular set of religious beliefs as the law of the land.

People like Rick Santorum want to change that.  They are less concerned to preserve their own freedom “of” religion than to abolish the freedom “from” religion guaranteed to everyone else.  They assert that we are, or should be, a “Christian nation,” and that’s what the Founders really intended us to be.  If that were the case, the Founders had plenty of opportunity to say so.  But they chose otherwise.  In none of our founding documents do the words “Jesus,” “Christ,” or “Christianity”—or even the word “God”—appear.

The Founding Fathers were men of the Enlightenment.  They read the Bible, to be sure.  But they also studied Voltaire and Diderot, Gibbon and Spinoza.  Whether men like Jefferson, Franklin, and Washington actually believed in the Christian God is an open question.  What isn’t in question is their firm conviction that every American should be free from the tyranny of someone else’s religious beliefs.

That is what this argument is really about.  Those who oppose the administration’s ruling can invoke the freedom “of” religion all they want.  Yet in seeking to deny full health care coverage to those who don’t share their beliefs, they have no right to violate the freedom “from” religion which the Constitution guarantees to us all.

In the four decades that followed the first inaugural of Franklin Delano Roosevelt, only one Republican occupied the White House, there were Democratic majorities in both houses of Congress in all but two election cycles, and Democrats controlled the Senate without interruption.  During this long political continuum, many of the best things in our public life were accomplished:  Social Security, unemployment insurance, Medicare and Medicaid, the GI bill, and, of course, the Civil Rights Act.

Then Richard Nixon came along.  It was Nixon who embarked upon what is now infamously known as the “Southern strategy,” which blatantly exploited the racial bigotry of white Southerners and drove a wedge between the two halves of the old Democratic coalition—the working-class cities of the North and the rural South.  The “Southern strategy” got Nixon elected, but it still left Congress in the hands of the Democrats.

It took Ronald Reagan to turn the strategy into something broader and far more corrosive.  Reagan cooked up a new kind of anti-government populism that deliberately preyed upon the anxieties of social and religious conservatives in every region of the country.  Thanks to Reagan, the Republican Party, once the voice of Eastern financial interests and the stolid Midwest, became the party of race, religion, and guns.

All of this suited the Party’s establishment just fine.   Reagan’s faux populism was the perfect formula for masking the Party’s true goals:  gutting the accomplishments of the New Deal, cutting taxes on the rich, and advancing the business interests of its corporate sponsors.  For a generation, this shell game was fabulously successful.  It got Reagan elected twice and gave us the phrase, “Reagan Democrats”.  It put an end to the Democratic stranglehold on Congress.  It put two Bushes in the White House.  It made Newt Gingrich the Speaker of the House and very nearly got Bill Clinton impeached.

But the game was always a bargain with the devil, and the devil may soon be asking the Republican Party to pay up.

Republicans have spent thirty years distracting voters from the real issues.  They’ve used a host of irrelevant but socially divisive controversies—abortion, nativity scenes in front of town halls, prayer in the schools, flag-burning, gay unions—to make their constituents forget about lousy jobs, stagnant incomes, ludicrously expensive health care, useless wars, and a massive give-away of the nation’s wealth to the very few.

The problem with this sort of tactic is that the ante keeps rising.  The more Republicans have incited fear and anger, the angrier people have become.  To keep pace, the Party has had to become progressively more extreme.

The even bigger problem is that Republican populism has gotten completely out of control.  The original plan was to manipulate—and control—the emotions of religious and social conservatives.   They were supposed to vote as they were told but were never intended to hold office, let alone turn their cultural and religious prejudices into the predominating policies of the Party. The new Republican electorate was never, ever, under any circumstances supposed to get real power.    That would be going too far.  That would derail the whole plan.  That would bring electoral disaster.

And that’s precisely what now seems to be happening to the Republican Party.  The once pliable “base” that Richard Nixon conjured up—the evangelical Christians, the blatant racists, the gay-bashers, the immigrant-haters—are now in the driver’s seat.  They are the people who gave the “tea party” its angry energy.  They are the people who can’t abide Mitt Romney.  They are the people who are are behind Rick Santorum’s “surge”.

For Santorum is one of their own.  He actually seems to believe that birth control should be banned, that a woman impregnated by a rapist should “make the best of a bad thing,” that the legal marriages of gay Americans should be nullified, and that every citizen should be compelled to live by the Sharia Law of the Old Testament rather than the principles of the Constitution.  No wonder the Party’s establishment has become so hysterical and desperate at the prospect of somebody like Santorum becoming their nominee.   If that happens, they will have nobody to blame but themselves.  They will reap what they have sown.

As soon as Newt Gingrich and Rick Perry started to criticize Mitt Romney for the way he made his fortune at the private equity firm of Bain Capital, the Republican establishment started circling the wagons in his defense.   Some called criticism of Romney’s money-making un-American.  Others, like John McCain, asserted that the only alternative to people like Romney is communism.  Romney himself accused critics of “the bitter politics of envy.”  The excuse for all this hysteria is that Gingrich and Perry are doing President Obama’s work and thus undermining the Republican Party’s likely nominee.

But that’s not the real reason for the hyperbole.

The real reason is that the Republican establishment knows Gingrich and Perry have struck a nerve.  In attacking a great, predatory fortune like Romney’s, they are striking at the very essence of the Republican Party itself, which remains what it has always been:  a cat’s paw for the wealthiest American individuals and corporations.   The Republican establishment cannot allow ordinary citizens to question, even for a moment, the behavior of market capitalism, because that would bring their entire house of cards tumbling down.  For Republicans, it’s all or nothing.  Either you worship at the altar of the market or you’re a godless communist.

This dichotomy, of course, is utter nonsense.  No  economic or social system, including market capitalism, is flawless, and to criticize its imperfections or abuses is an exercise in common sense, not communism.  Because private equity firms like Bain Capital operate in the shadows at the very edge of the market, it is not only appropriate to examine and question their behavior, it is absolutely necessary.

Bain is one of the largest private equity investors in the country.  The key word is “private,” which means that Bain is owned by its partners, not by outside shareholders.  Going all the way back to the House of Morgan, private equity firms have had a long history of complex deal-making that has amassed great fortunes for insiders.  Because they are not required to disclose their financial results, it is often difficult to determine how their deals actually work, who really benefits, and whether outside investors are getting their fair share of the proceeds.

Private equity companies do four things.  (1) They provide venture capital for new companies that might have a tough time raising funds from traditional lenders or markets.  (2) They create and manage investment funds targeting specific industries, countries or regions.  (3) They acquire entire companies and continue to operate them.  (4) They buy up and then “restructure” companies, either selling or dismembering them for a profit.   The first two of these activities are uncontroversial.  In particular, providing seed money for new businesses is one of the most productive functions of private equity investing.  It involves risk, and its success deserves reward.

Venture capitalism, however, is a tiny part of Bain’s overall business.  The firm’s web site lists more than a hundred start-ups, but these constitute a mere fraction of Bain’s total investments.  Thus, true venture capitalism can have contributed very little—if anything—to the fortune amassed by Mitt Romney when he was Bain’s ceo.

Romney’s money appears to have come from murkier transactions—leveraged buy-outs, which produce immense returns at little personal risk.  The dynamic of leveraged buy-outs is simple:  a firm like Bain borrows money to acquire a company, using that company’s assets as collateral; it then squeezes profit margins to pay down the debt, pocketing the difference and collecting hefty management fees along the way.  When all the profit has been extracted, what’s left of the the acquired company is often broken up and sold off before the business collapses and its stock becomes altogether worthless.  We won’t know for sure how much of Romney’s money came from this sort of chicanery until he discloses his financial statements and tax returns—something he is obviously reluctant to do.

Apologists for companies like Bain Capital routinely invoke the famous phrase of Joseph Schumpeter, “creative destruction,” to rationalize what they do.  But there is no moral or practical calculus that can possibly justify their activities.   Companies like Bain, and men like Romney, contribute little of value to society as a whole.  Their business strategy—buy it, rape it, dump it—produces plenty of destruction, but the only thing it creates is unearned wealth for their partners.   Republicans claim that our country would be better off with a ‘businessman” like Romney in the White House.  If so, they’re going to have to come up with somebody better.  They’re going to have to find somebody who knows how to create businesses instead of destroying them.

“Take the country back” seems to have become the clarion call of the Republican Party.  Sarah Palin can scarcely scribble a blog without reciting this refrain.  Michele Bachmann just used the phrase in announcing the end of her candidacy.  The tea party has virtually adopted it as a motto.  Conservative talk radio is filled with it.  The Internet boasts a host of URL’s with one version of the language or another.  You can even watch “instructional” videos on You Tube explaining “how to take our country back.”

It’s impossible to say who first voiced this battle cry, and it’s not at all certain that it was a Republican.  Both Howard Dean and Barack Obama said something very much like it in 2008, perhaps to their regret.  What is certain, however, is that the sentiment expressed by this phrase now underpins much of what passes for political thinking on the right.

But exactly what do Republicans mean when they say they want to “take the country back”?  There are at least three answers:  the corporate, the evangelical, and the libertarian.   Among the current front-runners for the Republican nomination, Mitt Romney embodies the first answer, Rick Santorum the second, and Ron Paul the third.  But all three answers amount to the same thing, and all three of the men who embody these answers share the same goal:  taking our country backward rather than forward.

Corporate Republicans like Romney want to take the country back to an era when business was free to do whatever it wished, unregulated and unsupervised.  Free to treat employees like chattel.  Free to pollute the environment.  Free to put profit before people.

Evangelical Republicans like Santorum want to take the country back to an era when a narrow and oppressive moralism dominated our public and social life.  When women were second-class citizens.  When gays weren’t treated as citizens at all.  When “uppity” minorities knew their place.  When the values of so-called “Christians” were imposed on everyone else.

Libertarian Republicans like Paul want to take the country back to an era largely of their own imagining when government barely existed, the United States lived in splendid isolation, the “gold standard” dominated our economic life, and ordinary Americans were left to fend for themselves in a dog-eat-dog world.

Above all else, Republicans want to “take the country back” from Barack Obama, a man who personifies everything they find both mystifying and threatening.  It isn’t the policies of the Obama administration they abhor—which are largely conventional and innocuous—it is the man himself.  A man of mixed race, from a troubled family, who nonetheless succeeded brilliantly in public life.  A man of Christian beliefs who nonetheless both understands and tolerates those with other beliefs.   A man whose very existence contradicts the stereotype of what Republicans imagine an American, let alone an American President, should be.

Republicans don’t question Barack Obama’s birth certificate because it is genuinely in doubt.  They don’t brand him a “socialist” because he is even remotely close to being one.  They don’t call him an “appeaser” because he has given aid and comfort to our enemies.  They do all these things, because the election of Barack Obama sent a clear, unequivocal signal that the America of today is not the America of a century ago.  That is the America the Republicans want to take us back to.

The Republican Party and its paid propagandists would have us believe that Democrats are wasteful spendthrifts who produce nothing but disaster for the financial markets, “job creation,”  and the broader economy.   Every Republican candidate for President recites this refrain as if it were the Pledge of Allegiance, and some, like Mitt Romney, have predicated their entire candidacies on it.  The trouble is, it’s a complete and utter myth.  Either that, or a bold-faced lie.

I recently examined the performance of the S&P 500 since 1926, the first year for which data are available.  I did some quick arithmetic to calculate the annual returns produced under Democratic and Republican presidents.   Guess what?   Over the last 84 years, the average return produced under Republican administrations was 8.1 percent.  Under Democrats, it was 15.5 percent.

But maybe that’s unfair.  Maybe Republican presidents were dealt a bad hand of cards by their spendthrift Democratic predecessors, and it took them a few years to clean things up.  So, I looked at the difference between first and second terms in office.  Under second-term Democrats, returns averaged 14.6 percent.  Under the first-term Republicans who succeeded them, they dropped to seven percent.  Oops.

But did things get better when Republicans got their own second four years in office?  They did.  Returns during Republican second terms rose to 11.5 percent.  That’s better—but still an embarrassing four points lower than under the Democrats they replaced.  Another oops.

And what about Ronald Reagan, whose presidency, we are constantly told, was a boom for the markets and led to a booming economy?  Under Reagan, the S&P produced a 14.7 annual return.  That’s certainly better than the overall Republican record.   But it’s still lower than the Democratic average.  Indeed, it’s little better than the record of Reagan’s much-maligned predecessor, Jimmy Carter, and it’s much worse than the returns produced during the first two years of the Obama administration.  Oops again.

Of course, the stock market and the overall economy aren’t the same thing.   Most Americans are far more worried about their paychecks than their portfolios.  So, I also took a look at GDP, the broadest measure of economic activity.   Since 1926,  our total economy grew, on average, 1.8 percent a year under Republicans and 4.8 percent under Democrats.  That may be the biggest oops of all.

I’m not at all sure that I will vote for Barack Obama next November, but if I do, it may be for an altogether counter-intuitive reason:  another four years of a Democrat in the White House will be better for business.  You’re not seeing double.  That’s what I said:  “Better for business.”

Michael Bloomberg has the reputation of being one of the most successful big-city mayors in the country, which is a tough trick to pull off when you run the biggest and least governable city in the land.  Much of this reputation rests on the notion that, because of his immense personal wealth, he is beholden to no one and free to serve all the citizens of New York City without regard for personal gain or special interests.

But Bloomberg just blew that reputation to smithereens, exposing it for what it actually is—a carefully and expensively manufactured sham.  By forcibly ejecting the Occupy Wall Street demonstrators from Zuccotti Park in the dead of night, he revealed his true colors.  He is nothing more than another rich guy (in his case, a very, very rich guy) whose sole interest is to preserve an economic status quo that benefits himself and his cronies on Wall Street.

In a press conference after this sneaky late-night raid, Bloomberg asserted that, in a choice between the First Amendment rights of the demonstrators and “public health and safety,” public health and safety had to come first.  That proposition is ridiculous on its face.

To begin with, no such choice existed, and it wasn’t a choice that had to be made.   Exactly what danger to public health was Bloomberg afraid of?   It was the demonstrators, not the general public, who were sleeping outside in the cold and the rain.  Perhaps there was some litter piling up in Zuccotti Park.  But there’s enough litter on the streets of New York to sink the Titanic.  As to public safety, the only violence sparked by this movement has come from over-zealous police departments, not from the demonstrators, who have been doing a remarkably effective job of policing their own behavior, thank you very much.

And even if Bloomberg’s phony conflict between public hygiene and free speech existed, it is not at all clear why the one should take precedence over the other.  Free speech is the essence of democracy.  Without it, none of the other freedoms we value so much are remotely possible.  It is guaranteed by our Constitution; it is the hallmark of our democracy; it should be protected against all who try to attack it.

It was Justice Oliver Wendell Holmes—a man whose mental and moral stature dwarfs the right-wing pygmies now sitting on the Supreme Court—who articulated the principle that only a “clear and present danger” to the very survival of the nation can justify the suppression of free speech.  Does Michael Bloomberg really believe that the demonstrators in Zuccotti Park constituted a “clear and present danger” to the survival of New York City?  Of course not.

It should now be obvious to everyone what Michael Bloomberg really believes—that the Occupy Wall Street movement is a “clear and present danger” only to Michael Bloomberg and his friends, to the financial and political elites who have for decades been rigging the system to advance and protect their own interests, to the mythology of the free market itself.  As a businessman, Bloomberg made a vast fortune doing the bidding of Wall Street.  As Mayor of New York City, he is still serving the same customer.  By trying to suppress the Occupy Wall Street demonstrators, Michael Bloomberg has played right into their hands.  He has demonstrated to the whole world that he is a Mayor for the One Percent, not a Mayor of the Ninety-Nine Percent.

It is impossible to know whether we’re witnessing a trend or merely a momentary reprieve, but last Tuesday’s elections provided at least a glimmer of hope that the country may at last be coming to is senses.  In state after state, in vote after vote,  the radical agenda of the far right went down to defeat.

The overwhelmingly repeal of the union-busting legislation pushed through by Ohio’s Republican governor earlier this year wasn’t unexpected—all the polling had predicted it—but the scale of the defeat was unequivocal.  Ohio’s governor didn’t even bother to make the usual excuses or blame the usual suspects.   Instead, his reaction to the defeat, in no small measure a rejection of the man himself, was one of stunned, slack-jawed humiliation.

The equally overwhelming defeat of Republican-backed legislation in Maine, designed to restrict voter registration, was harder to predict but no less heartening.  Of course, it’s Maine, and New Englanders have a history of common sense and stubborn fairness that may not be duplicated elsewhere.  But it’s a start.  And it’s a warning to Republicans in other states who are trying to pull the same trick in order to rig the next national election.

Then there was the unexpected success of a grass-roots campaign to recall Russell Pearce, the long-time political boss of Arizona and its de factor governor.  Pearce is a blatant white  racist, who pushed through legislation giving police a mandate to stop, search, and arrest anyone who “appears to be an illegal immigrant.”  Which, of course, means anybody who looks remotely Hispanic.  Even in a state where the electorate overwhelmingly supports get-tough measures against illegal immigration, it seems that Pearce went too far.

All three of these election outcomes, and many others like them that have received less attention, are unequivocal victories for those who oppose the extreme right-wing objectives of the tea party, its hangers-on, and its secret financial backers.

What happened in Mississippi is murkier.   By all measures, the decisive defeat of the “personhood” amendment ought be considered the most hopeful of Tuesday’s election results—because it was so utterly surprising, coming as it did from one of the most staunchly conservative and “Christian” states in the nation.  If the amendment had passed, it would have been a clear violation of Federal law, giving the right-wing Justices of the Supreme Court the chance they’ve been waiting for to reverse Roe versus Wade, which is precisely what proponents of the amendment wanted.  Now, the black-robed gang of five will have to wait for another opportunity to come their way.

The conventional wisdom is that even Mississippi voters, when faced with a stark and absolute choice, realized how complicated and personal the issue of “choice” really is—something most Americans have felt for decades.  But this interpretation doesn’t hold up under scrutiny.   Not very long ago, Mississippians voted almost unanimously to ban gay unions.  They voted overwhelmingly to keep the colors of the Confederacy on their flag.  A plurality told pollsters that they would support legislation outlawing interracial marriage.  And on the very day they rejected the “personhood” amendment, they also supported new restrictions on voter registration, a cynical move designed to make it hard for the state’s black citizens to have a voice in how they are governed.  Given such a record, it is difficult to believe that Mississippi voters suddenly “saw the light” and decided that being “pro-life” doesn’t require them to step back into the Dark Ages.

There is another, much uglier possibility.   The “personhood” amendment would have banned abortion under all circumstances, including rape.  In the Deep South, any relationship between a black man and a white woman has long been the most powerful of taboos, and the “rape” of a white woman by a black man has been counted the most heinous of crimes, as countless convictions by white juries of accused black men continue to demonstrate.  For some white Mississippians, the idea of a white woman being bound by law to give birth to an interracial child may have been too abominable to contemplate.

It is just possible that, for some “pro-life” Mississippians, not every life is equally sacred.  Behind this vote may lie, not suddenly enlightened ideas, but the dark, ancient, intractable racism of the Deep South.   If that is so, then this vote should give us no solace and no glimmer of hope, but a warning.