Globalization and Sovietization of America

December 27, 2016 in News by Slad

UNZ

What President Trump should do

In his election campaign Donald Trump has identified several key themes that defined American malaise. He pointed to capital flight, bad trade deals, illegal immigration, and corruption of the government and of the press. What is missing in Trump’s diagnosis though is an explanation of this crisis. What are the causes of American decline or as Ross Pero used to say: Let’s look under the hood.

Most of the challenges America faces today have to do with two processes we call Globalization and Sovietization. By Globalization we mean a process of externalizing American business thanks to the doctrine of Free trade which has been up to now the Gospel of the establishment. By Sovietization we mean a process of slow expansion of the role of the government in economy, education, business, military, press, virtually any and every aspect of politics and society.

Let us start with Globalization. Dani Rodrick (The Globalization Paradox: Democracy and the Future of the World Economy) has argued that it is impossible to have democracy and globalization at the same time. Democracy is inevitably going to clash with the demands of Globalization as they are opposite. Globalization requires entrepreneurs to search cheaper means of production worldwide. In practice, this means moving capital out of the USA. For fifty years economists have been preaching Free trade, meaning that free unimpeded, no tariffs trade is good for America. And it was in the 1950s, 60s and 1970s that American products were cheaper or better than those overseas. Beginning with the 1970s, the process reversed. Globalization enriched the capitalists and impoverished the rest of Americans. To put it in Marxist terms the interests of American society to survive and prosper came into contradiction with the interests of capitalism as a system of production and with the capitalists as a class who has no homeland, and for whom homeland is where it is easier to make money.

American capitalism from its very beginning was based on the assumption that what was good for business was good for America. Until 1929 it more or less worked. The robber barons were robbing other entrepreneurs and workers but at least they reinvested their ill gained profits in America. The crash of 1929 showed that the interests of Big Banks clashed with the interest of American society with devastating results. The decades after WWII have seen a slow and steady erosion of American superiority in technology and productivity and slow and steady flight of capital from the USA. Globalization has been undermining America. From the point of view of Global prosperity if it is cheaper to produce in China, production should relocate to China. From the point of view of American worker, this is treason, a policy destroying the United States as an industrial power, as a nation, and as a community of citizens. Donald Trump is the first top ranking politician who has realized this simple fact. The vote for Donald Trump has been a protest against Globalization, immigration, open borders, capital flight, multiculturalism, liberalism and all the values American Liberal establishment has been preaching for 60 years that are killing the USA.

Donald Trump wants to arrest the assault of Globalization on America. He promised to reduce taxes, and to attract business back to the USA. However, reduced taxes are only one ingredient in incentives. For businesses to stay or come back to the US, companies must have educated labor force, steady supply of talented, well-educated young people, excellent schools, and safe neighborhoods, among other things. As of now most of these preconditions are missing.

To fight Globalization Donald Trump announced in his agenda to drop or renegotiate NAFTA and TPP. That is a step in the right direction. However, this will not be easy. There are powerful vested interests in making money overseas that will put up great resistance to America first policy. They have powerful lobbies and votes in the Congress and it is by far not certain if Trump will succeed in overcoming their opposition.

Another step along these lines of fighting Globalization is the proposed building of the Wall on Mexican border. That too may or may not work. Powerful agricultural interests in California have a vested interest in easy and cheap labor force made up of illegal migrants. If their supply is cut off they are going to hike up the prices on agricultural goods that may lead to inflation or higher consumer prices for the American workers. But still, the wall, the trade deals and an end to capital flight are comparably easy tasks compared to more serious and structural problems of American society we call Sovietization. Let us turn to those.

Americans almost automatically are conditioned to think that they live in a country of free private enterprise. They take it for granted that America is a country of capitalism meaning private ownership of the means of production, to use a Marxist term. In fact, we should realize that huge sectors of American economy are not private at all, that in fact they have been slowly taken over by an ever growing state ownership and control. That is what we call Sovietization of American economy and society. Look at the two largest items of the American budget: the Military, Social Security and Medicare Medicaid. These three are government run, government owned, totally Socialist top down bureaucratic structures that taken together account for more than half of the US government expenditure.

The Military: Americans are told they have a best military in the world. In fact, it is not the best but the most expensive one in the world. According to the National priorities Project, in fiscal 2015 the military spending amounted to 54% of the discretionary spending in the amount of 598.5 billion dollars. Of those almost 200 billion dollars goes for operations and maintenance, 135 billion for military personnel and 90 billion for procurement (see Here is How the US Military Spends its Billions)

American military industrial complex spends more that the next seven runners up combined. It is a Sovietized, bureaucratic structure that exists and thrives on internal deals behind closed doors, procurement process closed to public scrutiny, wasted funds on consultants, kickbacks, and outrageous prices for military hardware. Specific investigations of fraud do not surface too often. Yet for example, DoD Inspector General reported:

material internal control weakness… that affect the safeguarding of assets, proper use of funds, and impair the prevention of and identification of fraud, waste and abuse. Source: “FY 2010 DoD Agencywide Agency Financial Report (vid. p.32)” (PDF). US Department of Defense. Retrieved 7 January 2011, cited in: https://en.wikipedia.org/wiki/Military_budget_of_the_United_States#cite_note-20

Why is it that an F35 fighter jet should cost 135 million apiece and the Russian SU 35 that can do similar things is sold for 35 million dollars and produced for 15 million? The answer is that the Congress operates on a principle that any price the military asks is good enough. The entire system of military procurement has to be scrapped. It is a source of billions of stolen and wasted dollars. The Pentagon budget of half a trillion a year is a drain on the economy that is unsustainable, and what you get is not worth the money. The military industrial complex in America does not deliver the best equipment or security it is supposed to.(on this see: http://nationalinterest.org/blog/the-skeptics/cutting-waste-isnt-enough-curb-pentagon-spending-18640)

Donald Trump was the first to his credit who raised the issue: Do we need all these bases overseas? Do they really enhance American security? Or are they a waste of money for the benefit of other countries who take America for a free ride. Why indeed should the US pay for the defense of Japan? Is Japan a poor country that cannot afford to defend itself? Defense commitments like those expose America to unnecessary confrontations and risk of war over issues that have nothing to do with America’s interests. Is it worth it to fight China over some uninhabitable islands that Japan claims? (See discussion: http://nationalinterest.org/blog/the-skeptics/should-the-us-continue-guarantee-the-security-wealthy-states-17720 )

Similarly, Trump is the first one to raise the question: What is the purpose of NATO? ( see discussion of NATO utility: http://nationalinterest.org/blog/the-buzz/will-president-trump-renegotiate-the-nato-treaty-18647) Yes the Liberal pro-Clinton media answer is: to defend Europe from Russian aggression. But really what aggression? If the Russians wanted to they could have taken Kiev in a day two years ago. Instead, they put up with the most virulently hostile regime in Kiev. Let us ask ourselves would we have put up with a virulently anti-American regime in Mexico, a regime that would have announced its intention to conclude a military alliance with China or Russia? Were we not ready to go to nuclear war over Soviet missiles in Cuba? If we would not have accepted such a regime in Mexico, why do we complain that the Russians took action against the new regime in Ukraine. Oh yes, they took Crimea. But the population there is Russian, and until 1954 it was Russian territory and after Ukrainian independence the Russians did not raise the issue of Crimea as Ukrainian territory and paid rent for their naval base there The Russians took it over only when a hostile regime clamoring for NATO membership settled in Kiev. Does that constitute Russian aggression or actually Russian limited response to a hostile act? (see on this Steven Cohen: http://eastwestaccord.com/podcast-stephen-f-cohen-talks-russia-israel-middle-east-diplomacy-steele-unger/) As I have argued elsewhere Putin has been under tremendous pressure to act more decisively against the neo-Nazis in Kiev. (see Vlad Brovkin: On Russian Assertiveness in Foreign Policy. (http://eastwestaccord.com/?s=brovkin&submit=Search )

With a little bit of patience and good will a compromise is possible on Ukraine through Minsk accords. Moreover, Ukraine is not in NATO and as long as it is not admitted to NATO, a deal with the Russians on Ukraine is feasible. Just like so many other pro-American governments, Ukraine wants to milk Uncle Sam for what it is worth. They expect to be paid for being anti/Russian. (See discussion on need of enemy: http://nationalinterest.org/feature/does-america-need-enemy-18106) Would it not be a better policy to let Ukraine know that they are on their own: no more subsidies, no more payments? Mend your relations with Russia yourselves. Then peace would immediately prevail.

If we admit that there is no Russian aggression and that this myth was propagated by the Neo/Cons with the specific purpose to return to the paradigm of the cold war, i.e. more money for the military industrial complex, if we start thinking boldly as Trump has begun, we should say to the Europeans: go ahead, build your own European army to allay your fears of the Russians. Europe is strong enough, rich enough and united enough to take care of its defense without American assistance. (See discussion of Trumps agenda: http://nationalinterest.org/feature/course-correction-18062 )

So, if Trump restructures procurement mess, reduces the number of military bases overseas, and invests in high tech research and development for the military on the basis of real competition, hundreds of billions of dollars could be saved and the defense capability of the country would increase.

Socialized sector of economy:

The sad reality is that the Sovietized system is engulfing more and more Americans. We are a country of government dependents. According to one study:

The percentage of Americans now receiving means tested program now stands at 35% . When you add pensions, unemployment, Social Security, the percentage of Americans relying on government for part or all of their subsistence is 49.5% of the American population.(See Kevin Boyd, Independent Journal Review )

If we add to this number Americans who work for the government and the number who work for government subcontractors we have the majority of work force. Everywhere, the government steps in, it creates a system of dependency and abuse. The second largest expenditure of the US government after defense is Social Security, Medicare Medicaid. In 2014 Social security outlays were 24% whereas Medicare and Medicaid combined another 23% of the national budget.( http://kff.org/medicare/fact-sheet/medicare-spending-and-financing-fact-sheet/ ) with fifty five million Americans receiving benefits. According to the University of Berkeley study: states and the federal government spent $152.8 billion a year on food stamps, health insurance, and cash assistance programs.( http://www.cheatsheet.com/money-career/whos-on-welfare-9-shocking-stats-about-public-assistance.html/?a=viewall ) . We have the most expensive Medical care in the world, and by far not the best.

Moreover, the system of dependency generates wide scale abuse. I know some real estate agents whose favorite customers are single mothers on welfare because the government pays their rent. He can charge a slightly higher than the market price as the government will pay up. The rationale is: rip off the government. When the government pays, no one counts how much it costs, be it the military, education, or welfare.

All of those Socialist Sovietized governmental, top down bureaucratic institutions, basically distribute public funds. The widely held liberal view that the needy need public assistance covers up the underlying premise that there should not be the needy who need public assistance. Moreover, the public assistance generates a system of governmental power over the people. They are no longer free to be in charge of their lives. They are dependent on the Big Bother for their livelihood. Is that the kind of America our founding Fathers wanted?

Aside from 55 million on some form of government assistance there are millions who are federal and state employees, 22 million to be exact. (see Terence P. Jeffrey here: http://www.cnsnews.com/news/article/terence-p-jeffrey/21955000-12329000-government-employees-outnumber-manufacturing)

The exact number of Federal and State government employees has been calculated and researched. Here is the data to be exact as of 2005:

By 2005 the Federal government employed 14,6 million people: 1.9. million civil servants, 770,000 postal workers, 1.44 million uniformed service personnel, 7.6 million contractors, and 2.9 million grantees. https://markstoval.wordpress.com/2012/04/10/how-many-people-work-for-government/

Millions are actually paid by the government but technically are private sector employees. According to one study: ^ Federal agencies spent over 500 billion for contracted products and services in 2012 according to federal data.^ (https://www.cbo.gov/publication/49931 ) In the last ten years the study shows the government bailed out companies and banks significantly expanded the numbers of those who are paid by the government:

a further 4.7 million employees dependent on taxpayer funding since 2005, bringing the total true size of the federal government to just under 20 million employees. https://markstoval.wordpress.com/2012/04/10/how-many-people-work-for-government/

This data shows that the United States of America is already now a country where the majority of the labor force is paid by the government in one way or another. Comrade Stalin used the expression Commanding Heights. He meant that the most important sectors of the economy are under firm control of the ruling party, such as defense industry, police, army, security institutions, agriculture, and education. Well we have arrived to Stalin’s favorite system, all of those in America today are under firm control of the Big Brother government.

Education:

Look at our universities. It used to be that in 1975 I paid 3000 dollars for tuition per year at Georgetown. Today it is more than ten times the amount. Why? Because the universities have hiked up tuition fees over the years as they were receiving ever larger government and private foundation grants. According to the data for 2011, the Federal Government paid 40 billion for research and development to universities. See on this: http://www.huffingtonpost.com/2013/04/27/universities-government-money_n_3165186.html

So much so, that many universities cannot live without those grants, as more than 60% of their R&D funding comes from the Big Brother. The more money they get, the more they need. It has created a system of dependency, milking the government and private foundations for ever more money. What is wrong with the Universities being dependent on government money? The answer is obvious: The casualty is Academic independence. If we value Academic freedom as a value in its own right, we should not have a system of government control over Higher Education.

As the Universities hiked up the tuition fees, the government held out a helping hand offering students’ loans. That led to an ever worse indebtedness problem and total Sovietization of American Higher education: ^Americans owe nearly $1.3 trillion in student loan debt, spread out among about 44 million borrowers.^ see: https://studentloanhero.com/student-loan-debt-statistics/) There is nothing private about our education anymore. Universities are totally dependent on government handouts; the students are totally dependent on student loans. The Sovietized bureaucracy thrives on processing all these money flows. The result is that we have the most expensive education in the industrialized world.

Our high schools are even worse. Check out the scores of high schools kids in Singapore and America will come across as a third world country. Several studies compared the skills of American High School graduates to those in other countries. They were way behind in math. But in technology category that measured:

things like using email, buying and returning items online, using a drop-down menu, naming a file on a computer or sending a text message…. The U.S. came in last place — right below Poland. (see: http://www.npr.org/sections/ed/2016/03/10/469831485/americas-high-school-graduates-look-like-other-countries-high-school-dropouts )

The problem is the same as elsewhere, bureaucratization, dependency, urban decay, poor financing, unqualified teachers, no competition, in a word Sovietization.

Mr. Trump, please get rid of Socialized Sovietized sectors of the economy as soon as you can. Drain the swamp in Washington: ban the lobbyists, make it a crime to lobby for private interest in a public place, restructure procurement, introduce real competition, restore capitalism, phase out any government subsidies to Universities, force them to compete for students, force hospitals to compete for patients. Cut cut cut expenditure everywhere possible, including welfare.

One of the most disgusting features of the Soviet system was the mass surveillance of the population by the KGB. Letters were opened, radio broadcast jammed, informers were listening in on private conversations and denouncing neighbors to the KGB. Could we have ever imagined in our worst dreams that a system of mass surveillance would be created and perfected in the USA. (see discussion on this in: Surveillance State, in http://www.americamagazine.org/issue/surveillance-state

What is even worse, is that the American public does not seem to be concerned that much. If in the Soviet Union, intellectuals and common folks were making jokes and ridiculed the Big Brother, today in America no one is seriously worried. No one is ready to fight for their freedom to read, write, say and think whatever they please without the NSA surveillance. Whether President Trump will defend individual liberty I do not know. The only hopeful sign is that he constantly attacks various Security agencies for their conspiring with Clinton, distorting facts and basically servicing the establishment.

To de-Sovietize America you will need to make what may be called a revolution. Perhaps Bernie was right after all. You will have a real fight with the establishment and their subsidized, Sovietized media, and their foundations and members of Congress. If you succeed you may indeed come down in History as the President who saved America from self-destruction. If you fail, decline will continue with catastrophic consequences.