Some American myths in the month of November

So the American people will have four more years of “socialism”. However will they cope? Some aren’t taking it well at all, such as Donald Trump who came over all Benito Mussolini and called for a “March on Washington”. In the interest of historical accuracy, it is only fair to point out that Benito Mussolini was actually invited to march on Rome in 1922 and bring to power the world’s first Fascist government.

Do you feel, consciously or not, a sense of relief that Obama won? Do you suffer from guilt about feeling relieved? Have I just hit upon a new psychological state – relief guilt? Given the absurdly constricted nature of the choice, you can debate endlessly whether it was right to vote for Obama or shun the whole corporate charade. Some, like Noam Chomsky, have confronted that dilemma.

But, from an international perspective, I don’t think voting or not voting is the main problem. It’s fundamentally irrelevant. The enduring problem is that the American Presidential election campaign puts out so many myths that possess a stickiness that attaches them to the cultural landscape. Before you know it, the elusive reality bird that you worked so hard to track down has flown away.

So here are three myths that urgently need dispelling.

Myth 1

Laissez-faire bad/Government intervention good

Obama spent $14 billion bailing out General Motors. Romney would have let the company go bankrupt. Whether the latter is actually true is highly questionable given that George W started the enormous bail out of corporate America. But the General Motors’ bail-out was presented as a victory against the ideological denseness of pure laissez-faire and for the United Auto Workers Union.

But it was a strange kind of victory. Post bail-out, the UAW signed a deal with General Motors in which, aside from its existing members getting a below the cost of living pay “increase”, also ensured that new car workers would be hired at half the pay rate, $16 a hour, that their predecessors received. This result of government intervention is not good. It’s not loitering on the outskirts of good. It’s very bad.

The General Motors bail-out exemplified 21^st century government intervention in which corporations are saved from their own mistakes through gifts of taxpayer money, while their workers and customers get the discipline of free markets. And this happens while the tax burden continues to be shifted away from corporations and the rich and onto the shoulders of the majority.

Anti-austerity but pro-capitalist economist Ha-Joon Chang has shown how General Motors’ failure was preceded by dabbling in every conceivable corporate fad over the last 30 years – shareholder value, buying other car firms and creating a highly profitable finance arm. But when it came to the state saving the company from bankruptcy, “the US government”, says Chang, “deliberately took shares that do not have voting rights (albeit priority in dividend payouts) – so that it would not have any say in the management of the company.”

Chang has noted the same reticent government intervention in Britain, where the government has legally nationalised two large banks, but does not control them."This is not even capitalism anymore," he says. “What is the point of owning a bank, when you have to negotiate hard, or (one suspects) even beg, in order to set the pay of your employees or make it lend more in the way you want?”

The original bail-out of the banks was, in scale and expense, the supreme example of “not laissez-faire” dwarfing all others. But was it a good thing? It saved the economy from collapsing at the time and saved the banks at massive taxpayer expense, transferring a large proportion of their debt to the public. This was followed by a huge infusion of quantitative easing which they used to recapitalise themselves. But they are still indebted. Bank of England Governor, Mervyn King said recently that advanced economies won’t be able to escape “their current predicament” without more write-downs of debt by banks and more recapitalisation. So what began in 2008 is not over.

Just possibly, in 2008, the banks should have received a classic dose of laissez-faire and been allowed to go bust along with their debts. Then new public, debt-free, banks could have been created, as suggested by, among others, Joseph Stiglitz. The “pain” would have been more intense in the short-term but not prolonged.

But our governments “intervened” the make sure this didn’t happen and we are living with the consequences.

Thomas Frank quotes a line from the 1930s American socialist, Norman Thomas, in his book, Pity the Billionaire. “There is no Socialism at all about taking over all the banks which fell in Uncle Sam’s lap, putting them back on their feet again, and turning them back to the bankers to see if they can bring them once more to ruin.” But there’s quite a lot of capitalism about it.

Myth 2

The middle class is the bedrock of a strong economy, democracy etc

Obama clothed his campaign in the need for a “strong middle class”. Romney vowed to “protect the middle class”. But like the fabled word “community”, the larger the middle class looms in political rhetoric, the more it disappears in reality.

According to US census research, published in September, the gap between rich and poor has widened to its highest level since 1967.  “The gains from economic growth in 2011 were quite unevenly shared as household income fell in the middle and rose at the top,” said Robert Greenstein, President of the Center on Budget and Policy Priorities, about the data. Average incomes fell for the bottom 80% of earners and rose for the top 20%. The top 1% of households experienced a 6% rise in income.

The income of the median American family is lower than it was in 1998. In a 2011 article about the disappearing American middle class, the US journalist Paul Harris said, “I do not care if you are a Tea Party activist or a Socialist party USA organiser, you should be able to agree on one thing, at least: this is unsustainable. Something has to give. But no one in the current political system looks like they have an answer.”

In Britain, as Ed Miliband’s rhetoric about the “squeezed middle” shows, the political class are having to come to terms with the new reality but are equally clueless about what to do about it. In Britain, on current trends, the entire bottom 50% will be poorer by 2020. The Trades Union Congress in the Britain thinks companies should be encouraged to raise the average wage. Well, that could work. In another galaxy.

As far as the vanishing middle class in the US is concerned, it’s plus ca change, no matter who lives in the White House.

Myth 3

“Equal Pay” is more achievable under Obama than Romney

Ok, so maybe this myth is a bit of a cheat, but language speaks volumes, if you’ll pardon the tautology. To keep referring to “equal pay” in the context of contemporary America and Britain is akin to waxing lyrical about “human rights” in a Roman coliseum at lion time. Pay in both countries is staggeringly unequal and getting worse. And neither Obama, nor Romney, had he been elected, will do anything about it. Obama clearly didn’t in his first four years, as the above census data shows. This is not meant to justify any kind of gender pay discrimination or retarded Republican views on abortion or contraception, but the “equal pay” mantra gives the impression of railing against privilege when, in reality, it does nothing of the kind.

In order to even begin addressing pay inequality the debate needs to move on from just talking taking about discrimination to understanding and, acting upon, exploitation: the remuneration workers get in compensation for their contribution to profit, the two elements of which are wildly out of sync. This, in turn, needs to expand to look at who decides pay levels, and thus the economic autocracy we live under will come gradually into focus. This is a mammoth intellectual shift which, as the Presidential election campaign showed, the political mainstream is incapable of making.

As the American writer Walter Benn Michaels has said, the ostensible Left in the US is little more than the “human resources department of the right". It is, despite what Donald Trump believes, not dangerous to the status quo.

The Czech dissident and later head of state, Václav Havel, developed the concept of “living in truth” as a means of defying the Communist regime in Czechoslovakia. It entailed, in part, a refusal to accept the lies of official propaganda. It is becoming a principle that is applicable to living in western, “democratic” countries. Whether one votes or not.

The Equality Illusion, a review of "Equality" by Noam Chomsky

The ironic thing about social mobility is that the only people capable of bringing it about shouldn’t believe in it – namely leftists.

The UK government’s social mobility strategy  rests on the same tired platitudes about raising the aspirations of young people from poor backgrounds. It will have the same success as John Major’s aim for a “classless society”. Even without obviously contradictory policies like tripling university tuition fees and abolishing the education maintenance allowance, it can’t possibly work

The reason is apparent from reading Walter Benn Michaels’ The Trouble with Diversity: How we learned to love identity and ignore inequality. For here is a person who does really believe in equality of opportunity and realises that to achieve it you have to restrict the liberty of rich people to keep and do what they want with their money. He believes in punitive inheritance taxes and abolishing private schools.

But, in realising this, Michaels falls into the ideological trap represented by the concept of social mobility. This is strange because The Trouble with Diversity is, in another way, a great unmasker of ideological illusion. The book attacks the way the American left has become the “human resources department” of the right. A rigid policing of the way companies recruit, and treat, racial minorities and women, has completely obscured what those companies actually do.

Everyone frets about discrimination, but exploitation is just fine. In fact, exploitation has virtually died out as a concept. If you are a female hedge fund manager and you earn $1.8m, while a male colleague doing the same job earns $1.9m that’s a huge problem. But if you are a (female or male) employee of Walmart and you earn $20,000, that’s just life.

But social mobility performs the same task of ideological obscuration. The very act of worrying whether poor people and women are able to climb the corporate hierarchy, justifies that hierarchy. Or makes it something you just don’t think about.

It is interesting that Michaels uses virtually the same language as the UK government in describing why equal opportunity is a good thing. “What ought to count is how hard you work and the skills and talents you possess, not the school you went to, or what your parents did,” says the government’s social mobility strategy. While Michaels thinks that “hard work and ability”, not background, should be rewarded.

But is it really “hard work and ability” that enables people to get a better job and income? There is, as these examples show, unanimity across the contemporary right and left about this. But this very unanimity should show that it is precisely here that ideology does its work. Ideology is an assumption, a crucial assumption, that remains unspoken. And therefore undisputed.

And it is the assumption that hard work and ability matter more than anything else that Noam Chomsky challenges in his 1976 essay, Equality, which you can read here.

What he says on social mobility is worth quoting at length:

“One might suppose that some mixture of avarice, selfishness, lack of concern for others, aggressiveness, and similar characteristics play a part in getting ahead and ‘making it’ in a competitive society based on capitalist principles. Others may counter with their own prejudices. Whatever the correct collection of attributes may be, we may ask what follows from the fact, if it is a fact, that some partially inherited combination of attributes tends to lead to material success. All that follows, as far as I can see, is a comment on our particular social and economic arrangements. One can easily imagine a society in which physical prowess, willingness to murder, ability to cheat, and so on, would tend to bring success; we hardly need resort to imagination. The egalitarian might respond that, in all such cases, that the social order should be changed so that the collection of attributes that tends to bring success will no longer do so.”

The preceding paragraph has the interesting quality of being true and unbelievable at the same time. Unbelievable is the sense of unacceptable if a person is to function, ideologically, in contemporary society. This is the ideological function of social mobility – to accept it you have to believe in fiction.