Saturday, November 06, 2010

The US Is Facing a Weimar Moment

The Obama administration may well have saved the extreme-capitalist system from collapse. But it will get no thanks for this from those who thought the system was not extreme enough, nor for those who hoped for its demise. And the masses who were affected economically by the impending collapse, and may have been spared even greater hardship, will not be grateful, seeing only their own pain, which is real -- and the pain yet to come.

The article (below) by Robert Freeman, sent to me and his family by my cousin, with a preface from him, was published on 2009 March 15th, but foresaw some of the things we are witnessing now as the election draws near next Tuesday (2010 November 2nd).

I have added a personal perspective, based on my three and a half decades as an immigrant in this
country (the U.S.A.).


The Current Crisis -- A Personal Perspective

As you have written in your preface below, balance is key. In an individual, a family, community, corporation or state, a lack of balance, if not corrected in time, can lead to disastrous consequences. For this balance to come about, there must be consciousness, awareness, of the environment, how it affects us and of our impact on it. I do not use the term "environment" here in its current popular sense, but in a more general one. For this awareness to exist, there has to be communication, and a desire to know -- and even to be disturbed by knowledge that does not fit into one's accustomed way of thinking. We cannot be insulated, by distance, apathy, disinclination or preoccupation, from the consequences of one's action or inaction on others -- and ultimately on ourselves.

Thanks for sending us this article by Robert Freeman, published,
on 2009 March 15, on  It is possible that Freeman is being too alarmist. But perhaps one should be alarmed. Those on the right will also note that socialist solutions, especially those attempted by the Communist parties in the Soviet Union, China and elsewhere, had also apparently failed, with economic problems and popular discontent, along with relentless pressure from the capitalist countries, leading to a de-facto embrace of local varieties of capitalism, along with active acquiescence to globalizing capitalism that enables capital flows, opens up markets and secures access to natural and human resources the world over, with big corporations increasingly dominant both nationally and internationally. (In the case of Russia and China, these mega-corporations are often the descendants of former state, and hence commonly owned, entities that were sold off, or simply handed off,  to cronies of those in power.)

So it seems that both the ideologies of the hard left and the hard right have been discredited, though the latter is in full-throated denial, claiming that the economic reasons for the multiple malaises in the extreme-capitalist societies are, in fact, due to interference by the states in the operation of free markets.

A significant fraction of the population of these countries (in particular, ours) is in agreement with this thesis. This has also been repeatedly hammered home by much of the media (claims to its liberalism notwithstanding). The entities partially or wholly owned, by the magnate Rupert Murdoch are examples. In this country alone, this includes Fox News, the Wall Street Journal (recently acquired and refurbished to attract a wider readership) and the New York Post (distributed for free in the public schools and widely read and believed, both by my fellow union members, whom it vilifies, and by our students). But these are flanked by both the traditional "liberal" media whose owners ascribe, though less fervently, to the same thesis, and by those like Rush Limbaugh and many others who have long used talk radio to broadcast more virulent versions of the doctrine to ordinary working folk driving to and from work, or listening at home.

Indeed, the populist mantle has, in this country, been, paradoxically, claimed by the right. What is left of the left appears to be either too disconnected from the everyday concerns of ordinary working people, and part of an affluent elite, or else completely shut out of the popular discourse by the so called "liberal media", that views them as too radical to be given a stage. Unlike the "populist" right, those on the "radical" left (many hardly radical by the standards of even sister capitalist countries such as Canada or those in most of Western Europe) have been unable to find resonances or build much support among ordinary working people.

When one listens even to John Stewart or his friend on the Comedy Show, one senses that they have, perhaps, contempt not only for the right wing extremists, but also for ordinary workers and their opinions, as well as for those further to their left. This may be because they have not mingled and worked enough.with ordinary people. So they attract a liberal, upper middle class or even affluent following, including those who are college students or college-educated with a broader perspective and better education than most, but leave much of the working population untouched. 

Many of the actions taken over the past sixty years to appease (initially) the poorer workers in this country (many of whom later became relatively more affluent and so began to view those poorer than them in a negative light) and the minorities did not have any impact on the libreral elite who enacted these measures (such as welfare, food stamps, medicaid, equal opportunity legislation, the forced integration of the public schools, etc.) but did impact, and arouse resentment, some of it justified, among those who perceived themselves as being negatively affected by such measures.

It seemed to me from my observation of Obama's campaign that his "change" was wondrously lacking in specifics. It may have worked well as a campaign device on a population fed up with the bungling of the previous administration, and generally discontent (as it is even more now) with government, but it provided no consensus or mandate on which he could base his policies once in office.

Better to be honest about one's agenda, and fail to be elected, it seems to me, than to be vague about it and be elected. But others will disagree.

Anyhow, I felt at that time that his election would simply provide cover for the Republican right (and perhaps also those in the Democratic right, especially Whites from Southern states) to blame the economic collapse that was already quite predictable prior to the election (in broad outline if not in details) on Obama's administration, and so on liberalism in general.

Better, it seemed to me, for a Bush clone or like-thinker to be elected and carry out the Bush agenda somewhat further towards its logical conclusion, so the drivers, aims and ultimate consequences of this agenda would be better exposed to light for those who had been brainwashed for years and would not be convinced otherwise that they were voting and acting (as you write) against the interests of themselves and their children. But, given the pitiable state we were already in, including the two wars, others may vehemently disagree with me.

But note that the wars continue, with the one in Afghanistan escalating and spreading into the subcontinent (as I foresaw from the time of the Iraq invasion) and that the Obama administration has also been unable to stem the power of the financial and corporate sector, being, indeed, largely subservient to it, while it has been active in attacking the public school system, trusting again in corporate wisdom. Meanwhile, the economic collapse of the bubble that had been building from Reagan's time continues, with dire consequences for all.

I lived through the oil crisis of the 70's and the Iranian revolution and its taking of hostages from the American Embassy, which brought out a general "Anti-Arab" animus, which was, perhaps understandably, directed not against Arabs or Iranians, who blended in, in appearance, with certain sectors of the "White" population in this country, but rather against those who looked like me.  Hence, the coarse epithets and beer bottles thrown in my direction from cars driven by drunken
students at the time as I waked the streets in Maryland near D.C. 

And so it was that I foresaw, in the early 80's, as this country went into denial about its oil dependency and foreign debt began accumulating under Reagan (as I worked as a lowly yahoo in the World Bank, and so began to be apprised about economic matters) that another such oil-related West Asian ("Middle-Eastern") economic crisis might have much worse consequences for sub-continentals and others.

Also, I realized that, in any economic downturn, scapegoats are sought -- and immigrants would be a prime target. This country is perhaps more accepting of immigrants than many others -- being itself, almost totally, a country of immigrants (some perforce) and relying on new immigrants in multiple ways, including economically.  But, in crises, logic and civility are often the first casualties.

Well, 9-11 came and went, and although some Sikhs (paradoxically!) were lynched, along with a few others, the rest of us survived. The Bush administration, despite all its wrongdoing, should be given some credit, as George W. expressly said that this country was not at war with Islam. That may have helped those of us who (whether we be Hindu or Sikh or Muslim or Buddhist or atheist) look different and perhaps close enough to the popular perception of the "Islamic terrorist" or his countryman.  But now, we have Obama at the helm, and many even believe that he is a Muslim and/or is soft on Muslims as also on those of color. So there is a rising tide, unfortunately, in certain segments of the population, of sentiment against those who are of color, generally, and against those, in particular, who resemble the popular perception of a Muslim.

Latinos are also being targeted, as the economy sours and people see them as taking away jobs or as feeding on the government's social support systems. Anyone who has seen how hard many of the Latino immigrants have to work to survive, and the nature of the jobs they do, will see the mistake that is being made. Those who are undocumented are also ineligible for the social services and safety nets that many of us enjoy -- including even the earned social security and medicare of our old age -- despite having labored here for decades. But again, logic and decency are, too often, the first casualties in a crisis.

Given the current climate, I should not have been that startled when, coming home from work rather early yesterday (Friday, around 5 pm), trundling my rolling pack with its heavy load of binders of teaching material and student work behind me, and with my backpack with other job-related papers on my back, I was accosted (from a safe distance, by his measure) by a middle-aged individual, who flung curses at me and told me to go back where I came from. 

I stopped in my tracks, turned towards him, threw out my arms in astonishment and said, "What was that about?" and kept waving my arms and mouthing those words as the "gentleman" retreated, glaring back at me every few steps. But I did not venture to run after him as I might have in my younger days -- not to indulge in any violence, but to enter, in my young naivete and hopefulness, into a frank, logical and civil discussion. No, that would not be prudent in these times -- and even less so, as these times proceed as I fear they will.

Thirty five years, and counting.

2010 October 30

I dont advocate that you guys go to either the extreme left or right.

But this article , written by an obvious "anti-right" , throws up an interesting conversation that follows the article.

There are elements of what he writes that sound like sensationalism, but in my mind there is truth in the risk that is portrayed that America could be headed for these troubling and dangerous trends , making life quite difficult for minorities for example, removing the human and social fabric altogether for a total dominance by corporate forces.

The funny thing is many of the policies of the " rich becoming richer " class are being inadvertantly supported  by those in the population who actually will lose big time if these policies actually come in to effect !!

Balance is always what saves the lives of nations, businesses and families. Balance has been lost in today's world , and history shows that all "successful" empires of the past have been destroyed as they slowly but surely lost balance.

European countries have embraced balance because they were physically so close to the disaster of the Hitler phenomenon. They have so called socialist programs like healthcare for the less affluent because they know that deeper divides between the have and have nots create revolutionary scenarios like the French Revolution , Nazism , and so on. The left and right are always well balanced and challenged.

 Economically, consumers in the European countries did not embrace  the extreme use of debt to acquire a quality of life. The two  economies where consumers did ( US and UK ) are finding it the most difficult to bounce back from the recession. Other countries in the western world, like Germany, have fared much better in the bounce back.

Read the article AND the critiques and blog comments that follow to form a balanced view, but there is no denying that some of the issues raised, uncomfortable as they may feel, will frame the new  environment in which both of you and your families will live.
Published on Sunday, March 15, 2009 by

The US Is Facing a Weimar Moment

by Robert Freeman

In early 1919, Germany put in place a new government to begin rebuilding the country after its crushing defeat in World War I. But the right-wing forces that had led the country into the War and lost the War conspired even before it was over to destroy the new government, the "Weimar Republic." They succeeded.

The U.S. faces a similar "Weimar Moment." The devastating collapse of the economy after eight years of Republican rule has left the leadership, policies, and ideology of the right utterly discredited. But, as was the case with Germany in 1919, Republicans do not intend to allow the new government to succeed. They will do everything they can to undermine it. If they are successful, the U.S. may yet go the way of Weimar Germany.

World War I left Germany utterly devastated. The landed aristocrats, industrial magnates, wealthy financiers, weapons makers, and the officer corps of the military that formed the locus of right wing power were completely discredited. Their failure in provoking and prosecuting the War was catastrophic, undeniable, and complete.

The economy was destroyed. Prices were at 800% of pre-war levels and rising quickly. Agriculture, pillaged for the War, lay in ruins. Social insurance payments for the War's injured, to widows and orphans, and newly unemployed soldiers were astronomical. And all this was before the cost of rebuilding was even begun.

At the same time, Germany faced massive reparations payments to the Allied victors, France and England. But Germany's foreign properties had been confiscated and its colonies turned over to the victors. The combination of these conditions, both domestic and international, made it extraordinarily difficult for the German economy to recover.

As a result of the failure of the right, the German people elected a moderately leftist government to lead the nation's rebuilding. It was named the Weimar Republic for the city in which the new post-imperial constitution was written. The new government was led by Friedrich Ebert, head of the German Socialist Party.

But the country's new parliamentary system had allowed dozens of parties to run, making it impossible for any one party to win an outright majority. Ebert's party had achieved the highest portion of votes, 38%, in the first post-War elections, held in January 1919. Ebert would have to govern by coalition.

It was at this time that the right wing made its crucial decision. Despite its shocking, naked failure over the prior decade, despite the horrific devastation it had wrought on the German people, despite the discrediting of everything they had purported to stand for, they would fight Ebert, his new government, and its plans for recovery. They would do everything they could to make sure that the new government failed.

Their strategy was two-fold: first, stoke the resentment of the population about the calamitous state of its living conditions-no matter that those conditions had been created by the very right-wing oligarchs who now pretended to befriend the little guy. Rage is rage. It is glandular and unseeing. Once catalyzed it is easy to turn on any subject.
And stoking resentment was easy to do. Just before the War ended, the military concocted its most sensational lie: the German army hadn't actually been defeated. It had been "stabbed in the back" by communists, traitors, and Jews. It was an easy lie to sell. It entwined an attack on an alien political ideology - liberalism- with the latent, pervasive myth of German racial superiority.

The second strategy of the right was to prevent the new government from succeeding. To begin with, success of the left would conspicuously advertise the failure of the right. Moreover, success by the left would legitimize republican government, so hated by the oligarchs of the right. Much better for the people to be ruled by the self-aggrandizing right-wing autocracy that had governed Germany for centuries.

So the rightists set out to do everything they could to make it impossible for the leftists to govern. They would use parliamentary maneuver, shifting coalitions, domination of the new mass media, legislative obstruction, staged public relations spectacles, relentless pressure by narrow but powerful interests, judicial intimidation and, eventually, outright murder of their political opponents.

Contrition for their abject failure, humility for their destructive hubris, compassion for their crippled country-those had nothing to do with it. All they possessed was a blinding, visceral hatred of the left and a masturbatory lust for the return to power.

Eventually, they succeeded. Every setback in recovery - and there would inevitably be many - was met with hysterical demonizing of the left wing government. The lie was repeated relentlessly that the government was run by communists, traitors, and Jews-the same furtive cabal that had purportedly stabbed the country in the back at the end of the War. They steadily chipped away at the efficacy and, thereby, the legitimacy of successive republican governments.
By the time of the Great Depression, Adolph Hitler's ironically named National Socialist Party had become the biggest vote getter in the nation. The Nazis had once been derided as the lunatic fringe of the far right. But the "respectable" right-wing power brokers who had started and lost the Great War anointed Hitler Chancellor in January, 1933.
He immediately suspended the constitution, abolishing most civil liberties. He outlawed opposition parties, began a massive military build-up and a relentless propaganda campaign, and set Germany and the world onto the path of the greatest destruction it would ever know.

America now faces its own "Weimar moment."

The failure of right wing policy and leadership over the past eight years, especially in matters economic, is comparable to Germany's right-wing failure in World War I. It is catastrophic, undeniable, and complete.


According to the World Economic Forum, forty percent of the entire world's wealth has been destroyed in the recent financial collapse. In the U.S. alone, between housing and the stock market, more than $18 trillion in wealth has already been destroyed.

The private mega-banks that anchor the financial systems of the western world are bankrupt. This makes it all but impossible to jump-start the western world's economies which are heavily dependent on bank-system credit to operate.
More than 10,000 homes go into foreclosure every day. More than 20,000 people lose their job every day. And the collapse is accelerating, developing its own self-reinforcing dynamic. Job losses breed foreclosures, reducing demand, leading to more job losses and further degradation of the financial system. None of the stopgaps designed to stanch the bleeding have yet worked. There is no bottom in sight.

Meanwhile, debt has risen to astronomical levels. Reagan and Bush I quadrupled the national debt in only twelve years. Bush II doubled it again in only eight. It is now ten times higher than it was in 1980 when Reagan was elected. Total public and private debt exceeds 300% of GDP, half again higher than it was in 1929.

The government's unfunded liabilities, promises it has made to the American people but for which no payment source can be identified, now exceed $60 trillion, a literally inconceivable sum that can never, will never, be paid. Federal Reserve economist Lawrence Kotlikoff has suggested that the U.S. government is "actuarially bankrupt."

The full measure of the nation's plight is revealed in Hillary Clinton's first trip as Secretary of State. It was to China, to beg them to fund Obama's new fiscal deficits. Without loans from China, the U.S. economy cannot be revived. The significance of this cannot be overstated: the U.S. no longer exercises sovereignty over its own economic affairs. That sovereignty now resides in the hands of China, the U.S.'s greatest long-term rival.

Thanks to Republican policies of massive debt and shipping jobs abroad, the U.S. has technically become a colony of China. It exports raw materials and imports finished goods, together with the capital to make up the difference. Should the Chinese decide not to lend the trillions of dollars the U.S. is begging for, the U.S. economy will implode, plummeting onto itself in a World Trade Center-like collapse that will leave dust clouds circling the planet for decades.

Notwithstanding the destruction inflicted on the economy by Republican policies, the most devastating breakdown is in the intellectual foundation on which right wing economic ideology itself is premised. Free market doctrine, the secular religion of right-wing America, is in utter, irretrievable shambles.

One of the most lofty tenets on which free markets are premised is their claim for themselves that they are "efficient," that is, that market prices always reflect "fundamental values" of assets. But if that's true, how could the world's largest insurance company, AIG, have lost 99.5% of its market value in only 18 months? How could the world's largest bank, Citibank, have lost 98% of its value over the same period?

How could the world's largest brokerage company, Merrill Lynch, have gone bankrupt and need to be bought by Bank of America? How could the world's largest car company, General Motors, have lost 95% of its value and stand on the threshold of extinction? How could the world's largest industrial conglomerate, General Electric, have lost 85% of its value in only 18 months?

If the largest companies in the world, those at the very heart of the capitalist system itself, can lose virtually all of their value in only 18 months, what is the possible meaning of the phrases "efficient markets" and "fundamental value"?
The other core tenets of free market ideology are equally compromised. Major actors are clearly not rational - a breakdown of theological proportions admitted by no less an avatar of the cult than its pope himself, Alan Greenspan. Free markets clearly cannot, will not, regulate themselves. It is precisely their innate, irrepressible propensity for sociopathic greed and predatory fraud that has brought the whole of the world's economy to the precipice of collapse.
Free markets clearly do not align risk and reward, allocating capital to its most productive uses, as its promoters advertise. They clearly do not automatically return to equilibrium, but must be bailed out with trillions of dollars of injections from the shrinking coffers of the public to the ever-bulging coffers of a private priesthood of pillage and plunder.
And in perhaps the greatest indictment of all, one going back to its primeval roots in Adam Smith's eighteenth century opus, The Wealth of Nations, the unrestrained behavior of self-interested individuals clearly, manifestly, does not "coalesce as if by an Invisible Hand to the greatest good for the greatest number."

These are not peripheral premises that have failed. They are not tangential tenets. Efficient markets. Rational actors. Market equilibrium. Risk and reward. Self interest. These are the essential sacraments on which the entire free market system is founded. They are in tatters. And it isn't that any one of them has been discredited by the glaring, merciless force of events. All of them have been. All of them together. And all of them at the same time.

Free markets have long been the basis for a legitimate - though rightly debated - economic policy framework. But they have become little more than a robotically-recited cultural catechism, a mindless mantra mumbled to mask the looting of the nation's resources that is the true purpose of Republican economic policy as demonstrated by the staggering upward transfers of wealth that inevitably occur under Republican regimes. A more complete, conspicuous, catastrophic, and irrefutable repudiation of right wing leaders, right wing policies, and right wing ideology could not possibly be contrived.
So what is the right wing response?

They have adopted the strategy and tactics of the failed right wing plotters in Weimar Germany. First, stoke the resentment of the population about the increasingly dire state of its living conditions-no matter that those conditions were created by the very right-wing oligarchs who now pretend to befriend the little guy. Rage is rage. It is glandular and unseeing. Once catalyzed it is easy to turn on any subject.

Second, prevent the new government from succeeding in any meaningful endeavor. The Republicans have set all their efforts to doing everything they can to make sure the Obama administration fails. Rush Limbaugh's infamous, "I hope he fails" pronouncement is only the beginning of the fomenting of hatred from the right. As Limbaugh said, "Let's be honest. Every Republican in America is hoping for Obama's failure."

The same malignant hope oozes unadulterated from all the other Dogpatch Demagogues that rent themselves out to the Republican party to foment resentment against anything liberal: Joe the "Plumber," Rick Santelli, Glenn Beck, Michael Savage, Ann Coulter, and virtually every other wing-nut operative whose intellectual stock in trade has been vaporized by the collision of right-wing policies with objective reality.

Equally so for the "respectable" members of the party, the all-but-three Republican members of Congress who refused to sign on to Obama's first stimulus package and continue to grandstand against every effort toward any form of progress. Contrition for their own abject failure, humility for their destructive hubris, compassion for their crippled country-those have nothing to do with it. All they possess is a blinding, visceral hatred of the left and a masturbatory lust for the return to power.

And what else can they do? Bereft of ideas, bankrupt in ideology, architects of collapse, obstruction is all they have. If Obama is successful, it will not only advertise the full extent of their failure, it will provide a model of liberal governance that would render Republicans irrelevant for decades, much as FDR's success left them out in the political cold for an entire generation. Liberal failure is a matter of life and death for Republicans.

And it's not at all clear that the liberals won't fail. No one should underestimate the task at hand. Never before - not even during the Great Depression - has the country inherited such a daunting, intractable set of economic problems: a debt burden so crushing; inequality so vast; a loss of financial sovereignty so constricting; an intellectual edifice so bankrupt; a private economy so uncompetitive; or an opposition so callously self interested in its own recovery and so cavalierly disinterested in the nation's.

The economy has been so damaged, successful rescue requires threading a series of policy needles, each of them so complex in their own right that none could be solved by any administration of the past 50 years. This includes rehabilitating and re-regulating the nation's banking system, restructuring health care, reducing national dependence on oil, reviving manufacturing so as to reduce the trade deficit, rebuilding the nation's crumbling infrastructure, dealing with a soaring national debt, trying to resuscitate a collapsing housing market, and all the while maintaining the safety net under 77 million baby boomers entering retirement with a net worth 60% what it was only 18 months ago.

Success will require much more than luck, hard work, brilliant policy, or soaring rhetoric. It will require cooperation and contribution from every American. It is those two offerings, cooperation and contribution, that Republicans are intent on withholding, the better to ensure Obama's failure. Simply put, the Republicans hate Democrats more than they love America.

If they succeed in derailing Obama's efforts, the cost will be incalculable.

After World War I, one of the consequences of the liberal government's failure was Adolph Hitler. Hitler had a genius for exploiting the resentment of the German people for their condition. More than 80% of the Nazi party's members were unemployed. It was these legions of idle thugs who made up the ranks of Hitler's brownshirt militia, the SA. The right wing oligarchy that had set out from the beginning to destroy the Weimar Republic recognized the potency of resentment and Hitler's genius at exploiting it. It was they who sponsored Hitler's ascension to Chancellor in 1933.

Resentment and obstruction are all the right wing in America have to peddle. Their policies are utterly discredited. Their ideology - even by its own standards - is a sham. They are so bereft of leaders, their de facto leader is a former drug addicted, thrice-divorced radio talk show host. That is literally the best they can muster. But they have built a national franchise inciting the downwardly mobile to blame the government, not the right, for their problems, exactly as Hitler did in the 1920s.

The Republican propensity for fascism must not be underestimated. Witness their phony justifications for the war in Iraq, fanning the flames of nationalistic aggression, just as Hitler did with Austria, the Sudetenland, Czechoslovakia, and Poland in the 1930s. Consider their symbiotic embrace of corporate interests in the oil, weapons, telecommunications, pharmaceutical, finance, and other industries-the same type of corporate interests that sponsored Hitler's ascent to power. Look at their efforts to dismantle civil liberties with the Patriot Act and the Military Commissions Act. Or their relentless, pervasive propaganda laundered through their corporate-owned right-wing media machine.

These are the classic hallmarks of fascism. The strategy is to obstruct recovery, facilitate collapse, and then incite the faux-populism of public resentment to re-install a corporatist oligarchy which has failed, but which will not abide a reduction of its privileges or a diminution of its control. It is a fetid, seditious agenda, awaiting only its own latter day mustachioed messiah for its final fulfillment.

World War I was a once-in-a-millennium upset in the architecture of global power. In four years, it shifted the center of that power from Europe to the United States. But failure now by the U.S. will shift that center once again, from the United States to China, out of the western world where it has resided for the past 500 years. The psychic shock to the billion-odd people living in western civilization, with its liberal democracies, capitalist economies, and Enlightenment ideals, will be incalculable, irretrievable.

This shift may be inevitable and only a matter of time. It is quite possible that the damage inflicted on the western world's economy by rapacious Republicans is already beyond repair. But it will be tragedy beyond measure if such a shift is consummated by the very wrecking crew that took us down the road to ruin, all the while so unctuously proclaiming "patriotism" as its crowning ideal. They are not patriots and their goal is not the revival of American power. It is the revival of their own power, even at the expense of America's. They represent a very dangerous threat to the nation's future.
Robert Freeman writes on history, economics and education. He can be reached at

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