The bankruptcy of Enron signaled not only the destitution of thousands of workers, not only the elimination of life savings for thousands of investors, not only the eradication of $70 Billion in shareholder equity, it also pronounced the total collapse of Republican conservative ideological positioning.
Reagan marched into the presidency with the carefully formulated position that governmental regulatory control was the problem with America. The so-called free market would police itself. If a company was inefficient, it would collapse. The rigors of market competition would bring everything in line. He did not say that corruption would cause companies to collapse, not competition. He did not say that these companies would buy favors from Republicans, and where necessary from Democrats in order steal billions of dollars from the taxpaying public. He did not say that that these companies, through deregulation would accumulate gigantic sums of money that would then be used to corrupt the democratic process and actually buy the presidency as happened after Reagan marched into the presidency.
The other side of deregulation was and is theft, corruption, lies, graft, fraud, political payoffs, and political intrigue. That was left out. Reagan, of course, did not formulate these positions; he merely acted out the role assigned to him by far more powerful and devious people.
The other side of Republican ideological positioning was euphemistically styled as wedge politics. Capitalism or market politics could not and would not mobilize a majority of the populace. While government was to be eliminated in terms of regulating business, it would be expanded in regulating individuals. Women would not have the right to choose, religion would no longer be a matter of individual, private decision but would be imposed by the state including requiring children to adhere to state sponsored prayers, African-Americans would not be allowed to have an even playing field in the search or jobs and other opportunities, workers right to organize would be attacked and eliminated if possible. Sexual preference, of course, was never considered a private individual matter; the state would make those decisions. One observer characterized the Republican platform as a program to get government out of the boardroom and into the bedroom.
To say the least, this platform is a hard sell. It does not serve the interests of a majority of the people. Taken as a whole, this platform is against both the economic interests and the individual preferences of a majority of working people. It could never mobilize the energy and loyalty of millions of working people. Brilliantly, the Republican ideologues devised a strategy of hate and . ruthless assault on all principles of decency. The plan of attack reached full fruition with the “southern strategy” articulated by Richard Nixon.
What we see today is political unity between the most reactionary elements of the country and a section of capital. This was accomplished by the use of wedge politics with a concentration in the South. Wedge politics is essentially a euphemism for hate politics. By driving a wedge between white and black workers, between men and progressive women, between straight and gay workers, even between national minority workers and other workers, Republicans backed by a section of capital were able to create one issue Republicans. By being blinded by hate or anger or fear, one issue Republicans can be convinced to vote against their own economic self-interest.
The base for wedge politics is racism. That is why the first and most successful use of this strategy occurred in the South. Attacking liberals as rich eastern capital, the Republican Party was able to posture itself as the friend of the white working man. Thus, the term limousine liberal. This strategy mobilized white men by opposing affirmative action first. Of course, code words were developed; opposition was to quotas, not affirmative action. Then, having demonized those in “favor” of quotas, the right wing then demonized those in “favor” of affirmative action. The same process was used for those struggling for women’s rights. First, attack feminists. Then, the right to choose. First, oppose restrictions on hunting then all restrictions including assault rifles. Then, the right wing always had its ace in the hole by attacking sexual preference. But taken as a whole, the entire program was and is one of hate. White working men could only be mobilized against their self-interest if sufficient anger would blind them and hate is a blinding force. That is why demagogues are so successful.
The right wing spent years in ideological bombardment. During the 1960’s and 1970’s, even words such as altruism, compassion, and generosity were under attack as the positions of knee jerk liberals. Any effort to address the needs of working people was attacked as wrongheaded , at best and probably evil.
The other side of this ideological attack was to demonize welfare recipients thereby convincing the white working man that his economic problems were caused by a government that catered to the poor, not working people. The facts never got in the way. Whenever welfare was discussed, the recipient was black thereby combining two sources of anger even though a majority of recipients are white. Most welfare recipients work when possible but that fact is never discussed. Most importantly, there was never any discussion of the fact that capitalism cannot and will not provide full employment and there must be a reserve army of the unemployed to keep wages down. Then it would be recognized that welfare payments help working people, especially the white working man.
By attacking the welfare queen, the government not capitalism becomes the enemy of working people. The ultimate agenda is to de-politicize the working class so that it will not grasp its immediate task which is to unify against its class enemy. As a result, the white working man is given a few small privileges and African-Americans, women and other national minorities are left to fight among themselves.
But the foundation for this strategy is that the market will function reasonably well. It will hand out a few crumbs and for those who are angry but not greedy that will be enough. The Republican right wing took the position that the privileges and stratification that existed with regulation would continue only the market would be more efficient in handing out the privileges and would never attack the existing stratification. Instead, unregulated capitalism fostered corruption. It corrupted the corporate structure itself and then it corrupted the political system. With the incredible concentration of wealth, it then turned on the democratic process itself. It tried to buy the presidency for Bush II and when that failed the right wing cabal surrounding Bush II literally stole the election. The complete and total collapse of Enron, however, exposed the madness for what it is. Weakly, the right wing now argues that it is a bipartisan problem, once again seeking a shield against the true story. Not only is this right wing cabal at fault for the loss of $70 billion, it is wrong as to the solution.
The coverage of the Enron situation has primarily focused on the disintegration of a powerful corporation due to the deceit and criminality of those who ran the company. The few reporters who have looked below the surface have proven linkage between Enron’s corruption and its political connections to the Bush administration. David Podvin, Multitrillion Dollar Financial Scandal,http://www.rense.com/general19/multitrill.htm
The media intentionally hides the involvement of the Bush cabal in this scandal. More importantly, it hides the ideological bankruptcy that caused this scandal. Whitewater involved $100,000.00 and resulted in a $50,000,000.00 investigation. This involves $70 Billion and there is no investigation let alone impeachment. The program of the right wing Republicans has set up a situation which can very well lead to total collapse and certainly has led to the necessary elimination of the unregulated economy.
“Enron’s duplicity is an extreme symptom of a financial cancer that threatens the health of the economy. The disease is a malignant accounting method that has received legal protection from conservative politicians on behalf of their corporate benefactors. It is called ‘pro forma’. Originally intended to allow companies to compensate for extraordinary events that distorted their financial reports, the pro forma accounting method has led to the greatest fraud ever perpetrated.” Podvin, supra (Emphasis added)
Because the right wing actually believes that the market economy will work despite the evidence to the contrary, the Republican right wing always ignores and denies the necessity for governmental regulations. The market economy necessarily and always creates a concentration of wealth that is unfair, oppressive, repressive and exploitative. By concentrating wealth in the hands of the very few, capitalism destroys the buying power of the working people. Working people create enormous wealth that is then sucked off by the most corrupt and greedy capitalists as happened with Enron. The production of goods results in overproduction because working people have no money to buy what they have produced. Simply put the market economy does not work. Never has and never will. Government enters to make it work or at least give a semblance of working order. The first step in making the market economy work is the redistribution of wealth. But since the concentration of wealth allows these corrupt capitalists to buy politicians, the redistribution is blocked.
Economists dub themselves practitioners of the dismal science. More appropriately, these so-called scientists should be dubbed capitalist apologists, not scientists at all. For a price, they rename market failure and say it is necessary for progress. They even have mathematical formulas to support their hogwash. Now, their position is that current problems are temporary adjustments on the road to globalization which will lead to progress for all.
These apologists know better. They are no different than the streetwalker who promises to go around the world for $50.00. These apologists promise an efficient system governed by the invisible hand. They charge huge sums of money when they know that the invisible hand does not work and the unregulated market leads only to hunger, destitution, exploitation, and disorganization. A system that rewards the most greedy and corrupt will inevitably lead to greed and corruption. It cannot regulate itself. At least the streetwalker is honest in the assessment of the service.
Regulating capitalism curbs the most harsh results and reduces suffering. It does not address the problem which is the market itself and the concentration of wealth in the hands of the most corrupt among us.
“Freed from concerns about regulatory oversight, this country’s biggest companies became dramatically more ‘creative’ with their earnings reports. Current estimates for S&P 500 corporations are that they have collectively earned about $410 billion in 2001 when using the pro forma accounting method. However, when using GAAP, they have collectively earned about $240 billion.
Those who claim that Enron was an exceptional case are technically correct. While Enron overestimated its earnings by 100%, the average large publicly held corporation is overestimating its earnings by only 42%.
IBM reports pro forma earnings. So does Intel. And Cisco Systems. And Dell. And Sun Micro. And Motorola. And Microsoft. And. . . By engaging in such manipulation, with the assent of accountants and governmental oversight agencies, Corporate America has conned the public into investing trillions of dollars based on phony earnings. Cisco, for example, has used its artificially inflated stock price as capital to acquire other companies. Many corporation empires have been built on such accounting legerdemain, including General Electric (NBC), Viacom (CBS), Disney (ABC), AOL/Time Warner (CNN< Time Magazine), News Corporation (Fox), the Washington Post Company (Washington Post, Newsweek), the Tribune Corporation (Chicago Tribune, Los Angeles Times, and the New York Times Company (New York Times, Boston Globe).
Enron is the tip of an iceberg on which sits the entire mainstream media. A national association of accounting firms has called on the Securities and Exchange Commission to require all publicly held corporations to report real GAAP earnings. The return to ethical accounting standards would mean that, in order to reflect the current valuation of the Dow industrials. The average would fall to 5825. In order to reach the historical norm based on GAAP, the Dow would decline to 3300.
A major decline in stock prices would erase trillions of dollars of investors’ wealth. With the uninformed public currently heavily invested in the market., this would have crushing impact on the finances of the average American.” Podvin, supra.
The problem is not simply a business matter as Bush II contends. It is matter of political ideology proven bankrupt.
“In 1995, Senate Republicans and almost half of the Democratic colleagues joined to override President Clinton’s veto of legislation providing corporations with protection from shareholder lawsuits. The leader of the effort to dramatically reduce civil liabilities for companies that report phony earnings was Wall Street lobbyist Harvey Pitt, who has made a career of defending the shady dealings of stock market thieves like Ivan Boeshy.
Just as his father hid the magnitude of the Savings and loan scandal until after the 19878 election, Bush is desperately trying to obscure the truth about Corporate America’s financial slight of hand in order to defer the tumbling of the house of cards until after the 2004 campaign. He expects to be helped in this effort by the man he appointed to be Chairman of the Securities and Exchange Commission , the one who is most responsible for seeing that corporations accurately report their earnings . Harvey Pitt.” Podvin, supra.
Because the media is totally dominated by the right wing ideologues , they have no idea of the effect of their positions. Nor do they believe anyone will ever decipher their duplicity. One commentator stated without the hint of a smile that Bush II is now viewed as a James Bond type.
Millions of people know the Bush cabal stole the election, and sacked the American treasury. They stole the election and now it comes out that Kenneth Lay of Enron helped to finance the attack on Florida.
The corruption is like a huge pile of dung with everyone saying it does not stink. While a level of pessimism creeps into our work, one must remember that President Johnson constantly pointed to his polls as proof that the War in Vietnam was popular. That the American people supported the war. Now John Ashcroft states that anyone who disagrees with him either supports the terrorists or is a traitor. Johnson could not maintain his position and that was when jobs, education, health care and housing were more readily available to working people than now. The tax system then was progressive even if it was unfair to working people. All of that has been wiped away. Bush II will have considerable difficulty convincing people that they must endure this hardship while he gives the country away to the richest people in the world.
A specter haunts the world today. Even if it is not the specter of proletarian revolution outlined by Karl Marx, it is a specter of total failure of capitalism. Capitalism is destroying the living environment of the world. It creates chaos, anarchy, war, terrorism and murder. Religious fanaticism is countered by repression and murder. This specter of disaster is manifested by working people buying water to drink when they can, getting sick from fouled air and not having any health care to address the problems. War and anarchy are not only real but expected.
The only answer provided by the right wing is globalization which comes at prices no one can afford and the product is deficient anyway.
Globalization represents the destruction of civilization, the concentration of wealth in the very, very few and the destitution of the world’s peoples. In return they are given religious fanatics to lead them out of this hell.
In these conditions, the Bush cabal will be put on notice that they will be destroyed in the wake of the demand for jobs, peace and equality.
Yours in Struggle,
Ronald D. Glotta
220 Bagley, Suite 808
Detroit MI 48226-1409
(313) 963-1320 (313) 963-1325/Fax
rglotta@glottaassociates.com