February 05, 2008 By Paul Street

Paul Street’s ZSpace Page

Join ZSpace

I could swear this happened last night (I am writing on the morning of Thursday, January 31st), but it may be my addled, anxious, and overworked mind playing tricks on me.

I was watching “American Idol” and trying to balance my checkbook.

I was thinking I should try out for “Idol.” I was also thinking about the gap between my income and my irreducible life expenditures.

A commercial for a drug that promised to make me happy and relaxed flashed across the television. I reached for the clicker to hit “mute.”

But before I could turn off the sound, the ad was interrupted by the image of a sixty-something businessmen sitting behind a giant desk in a plush corporate office.

A message ran across the bottom of the screen. It said: “A Message from the American Corporate Plutocracy.”

The businessman was wearing a pinstripe suit. Behind him hung pictures of J.P. Morgan, Ronald Reagan, Bill Gates, and Bill Clinton.

He looked very serious. He read the following speech:

“American subjects, we are interrupting this important pharmaceutical advertisement to tell you of the special satisfaction we feel at learning that John Edwards has dropped out of the Democratic presidential campaign.”

“Edwards was on the cover of Newsweek a little more than a month ago. He was charismatic, handsome, and very effective on the campaign trail and in debates. He had star quality and many millions of dollars.”

“In the last big match-up survey taken before the Iowa Caucus, he polled as the most electable candidate in the presidential race. He was the only Democratic contender who defeated all of the likely Republican presidential candidates – even John McCain, who defeated Hillary Clinton and tied Barack Obama.”

“Democratic Party primaries have been held in just four small states and he’s already done.”

“We are very pleased to hear of his early surrender, in which we played our usual quiet but powerful role. It is we who made sure that Edwards’ more explicitly corporate and centrist opponents could outspend him by a wide margin.”

“It is we who pushed him to the margins of the all-powerful media system we own and manage in your interest – and ours.”

“We’ve already voted John Edwards off the presidential version of ‘American Idol’” – so you don’t have to.

“We’ve winnowed the presidential field to four (4) officially elect-able and corporate-friendly candidates and the election is more than ten months away!”

“It’s all about he hidden primary of the rich and powerful operating behind the scenes, in the hidden corridors of power under the benevolent reign of Empire and Inequality, Inc. We are the Simon Cowells of American presidential politics. We love it and you should too.”

“We do it for you, to save you the effort and heartbreak of ‘democracy,’ for which you lack the time, skill, energy, and resources.”

“Take note, would-be critics of our caring rule! The spectrum of permissible debate grows narrower with each quadrennial election extravaganza we stage.”

“Do not misunderstand us, American subjects. John Edwards was no radical threat to the corporate system we have crafted in response to our need for spectacular wealth and your inability to construct a better social order. Edwards said repeatedly that be believed in what he called ‘a market economy’ – what we and you should understand as a heavily state-managed system of private profit and class rule.”

“He followed our counsel when he wrapped his call for universal health insurance in a plan that continued – beneath all his anti-corporate bluster – to protect the very insurance and pharmaceutical companies that have done so much to create your health care crisis.”

“He made it clear again and again that he supported the broader global framework of the splendid imperial order and the related military-industrial complex we have built for the good of the world – and our own profit”.

“He agreed to never to mention the overseas victims of our clumsy oaf George W. Bush’s foreign policies, including the 1 million Iraqis killed by ‘Operation Iraqi Freedom’ – an action that continues to generate considerable profits for us.”

“He remains ridiculously wealthy (like us) and never really challenged the core inequalities inherent in the workings of the ‘market economy.’ ”

“He stood to the right of those malevolent radical mischief-makers Ralph Nader and – to mention another presidential candidate we recently liquidated – Dennis Kucinich.”

“But that’s all part of what makes Edwards’ early defeat all the more delightful and rewarding for us. The magnificent march of our munificent reign has progressed so far that even John Edwards is defined as too radical to make a serious run at the White House.”

“He may not have fundamentally questioned the corporate-imperial system that all of us enjoy, but he did develop some very nasty habits that displeased us. He spoke insistently about and against endemic U.S. poverty and related it to oppressive economic inequality and the supposedly ‘exorbitant’ wealth of the ‘privileged few.’ He won Nader’s approval by speaking against our ‘plutocratic’ control of government and politics as if that rule isn’t a good and necessary thing!”

“He insisted on praising the labor movement, which he repeatedly referred to as ‘the single greatest anti-poverty program in American history.’”

“He also connected his obnoxious and inherently dysfunctional and dangerous ‘populist’ appeal to very specific and detailed policy issues and agendas.”

“American subjects, we are certain you found this foolish issues and policy obsession as irritating as we did! As we hope you appreciate, we kindly cater to your limited capacities and sensibilities by framing elections around trivial and childish matters of candidate image, identity, and personality.”

“We don’t want you to tax your limited and overwrought minds with difficult matters of policy and governance. We want to help you vote for the right kind of politicians you find most likeable, pleasant and fun – kind of like the ‘American Idol’ show to which you shall momentarily be returned.”

“As part of this mission, we employ an army of marketers, researchers, data-miners, publicists, and image consultants to help you understand which one of the presidential ‘Idols’ makes you feel best about yourselves and your glorious, business-run Nation State.”

“We, the surviving four ‘Idols’ – Mitt, John (McCain that is), Hillary, and Barack – and the people around them (most of which we provide) will handle all the issues and the policies. We and they will give you all the ‘hope’ and ‘change’ and ‘unity’ you need.”

“Get ready for a long and tedious exercise in delusion and identity politics that may well guarantee the White House to our favorite party – the arch-plutocratic, messianic-militarist GOP.”

“We do it all for you, America. We are here to take and keep the last risks out of your ‘democracy.’ The nation is in good hands.”

“Thank you for your attention. We return you now to your previously scheduled anti-depressant commercial and to the rest of the countless advertisements and programs on this and any of the other 154 stations we have generously created for your endless diversion, brainwashing, marketing, and indoctrination.”

“Yours in Eternal Thought Control,”

“The American Corporate Plutocracy“

They Have Got to be Kidding
by Peter Schiff

Yesterday, as the dollar fell to new record lows and oil and gold prices surged to new highs, Wall Street remained fixated on wholly meaningless government data that managed to report the lowest inflation in the last half century. These bizarre numbers were integral in allowing the Commerce Department to report 3.9% annualized GDP growth in the third quarter, which was heralded by the bulls as evidence that a resilient U.S. economy had shrugged off the problems in the housing and mortgage markets. However, the government’s ability to make “economic growth” magically appear is based purely on statistical finesse.

To arrive at this rate, the government had to assume that inflation during the quarter ran at an annualized rate of .8% (that’s less than 1%). That is the lowest rate of inflation used to calculate U.S. GDP since the Eisenhower administration. With oil priced at almost $100 per barrel, gold futures trading over $800 per ounce, the dollar hitting record lows, and the Fed printing money like it is going out of style, the government has the nerve to claim that current inflation is the lowest it has been in half a century. Unbelievable!

Just in case there is some confusion, the government adjusts nominal GDP gains using the GDP deflator, which represents the inflation rate during the time period being measured. This is done to strip inflation out of the GDP calculation so that only real growth gets counted: not nominal gains that result purely from inflation.

The consensus estimate for 3rd quarter GDP growth was 3.4%. The reason we beat that number was that the government adjusted the nominal 4.7% gain by a mere .8%. Had the government assumed a higher rate of inflation, say 2.6% (identical to the rate used to deflate second quarter GDP,) the 3rd quarter gain would have been only 2.1%, well shy of the consensus forecast. My guess is that inflation is actually running at an annualized rate closer to 10%. Therefore using a more honest deflator, the U.S. economy is actually contracting, which would explain the recent anecdotal evidence provided by various economic polls, voter dissatisfaction and consumer sentiment numbers. In fact, if one simply measures U.S. GDP using gold or any other currency, it is clear that we are already in a recession.

Similar illusions are created in other numbers, such as retail sales, corporate earnings, and stock prices, which are all rising merely as a result of actual inflation being higher than the official reports. For example, higher retail sales reflect consumers paying higher prices for the products that they buy. They may in fact be buying less stuff, but are paying more for it. Further, part of the gains result from tourists using their appreciated foreign currencies to buy products cheaper here than they can in the own countries. I have heard about Canadians checking into U.S. hotels with empty suitcases, crossing the border to indulge in weekend shopping sprees.

Corporate earnings, particularly those of multi-nationals, are padded as their foreign currency denominated earnings translate into more dollars when those earnings are repatriated. However, such gains are illusions, as companies merely earn more dollars of diminished value for the goods they sell. The actual volume of exports does not necessarily improve much, as evidenced by weak industrial production and manufacturing employment. When those additional debased dollars are paid out as dividends, they confer no real increase in global purchasing power to shareholders.

Similarly, just as inflation causes prices to rise for goods and services it causes stock prices to rise as well. Though such gains may be less than the actual increase in the cost of living, as long as the government gets away with using bogus CPI numbers which fail to fully reflect inflation, Wall Street takes credit for nominal gains as if they were real.

However, as ridiculous as the phony GDP number was, yesterday’s biggest joke was a report on global competitiveness put out by the World Economic Forum in Davos, Switzerland, which ranked the U.S. economy as the world’s most competitive. To arrive at this conclusion, the forum has obliterated the obvious under a mountain of theory. In determining country rankings, the WEF weighed strengths in their “12 Pillars of Competitiveness”, including: institutions, infrastructure, macroeconomic stability, health and primary education, higher education and training, goods market efficiency, labor market efficiency, financial market sophistication, technological readiness, market size, business sophistication and innovation. Completely ignored however are the measurable results of competitiveness, notably a trade surplus and a strong currency.

It is as if the WEF decided to judge a weight loss contest without using a scale, by instead focusing only on mental attitude, dedication, perseverance, and nutritional education! As a result the prize is awarded to the fattest contestant. Based on the empirical evidence of a gargantuan trade deficit, staggering global indebtedness, and a declining currency, the United States is clearly not the most competitive economy in the world.