Tag Archives: The Koch Brothers

Koch-Funded Economist Wants “Less Democracy”

Professor of Capitalism

By Ben Norton
March 28, 2015
Counter Punch

 

Dr. Garett Jones is wary of democracy. He is Associate Professor of Economics and BB&T Professor for the Study of Capitalism at the Mercatus Center, “the world’s premier university source for market-oriented ideas,” at George Mason University, you see. He wants “less democracy.” He, like so many of his academic colleagues, writes scholarly articles in prestigious economics journals, extolling the virtues of moralless, unmitigated greed and absolute plutocratic tyranny. And it just so happens that that inconvenient “democracy” thing is an “inefficient” burden on the path toward a society based on these principles.

In “10% Less Democracy: How Less Voting Could Mean Better Governance,” a 24 February 2015 presentation at George Mason University’s Center for Study of Public Choice, Jones bemoans the “anti-market bias” inherent in democracy. He laments that protectionism is “encouraged by voters,” and that, “around the world, looming elections mean less labor market liberalization.” Jones also is distraught that elected electricity commissioners “shift costs to the … industrial sector.” The burden should always be on the worker, naturally.

A good macroeconomist maintains “skepticism toward maximum democracy,” the professor says, as “less democratic monetary policy” leads to “lower, more stable inflation, with no apparent change in the unemployment rate or real GDP growth.” He cites Alan Blinder, a former Vice Chairman of the Federal Reserve and Princeton professor of economics who served on President Bill Clinton’s Council of Economic Advisers, who candidly admits that “events since 1997 have pushed me more and more toward the conclusion that society would indeed be better off if politicians confined themselves to broad decisions about tax policy and left the details to a group of technocrats analogous to the Fed’s Board of Governors.” This is the kind of thing economists say to each other behind closed doors: Democracy is bad, and society would be much better if ruled under the silicon fist of a technocratic oligarchy.

Prof. Jones also draws from the work of Jennifer Hochschild, a professor of government and African and African-American studies at Harvard University, who argues that “expansions of the suffrage bring in, on average, people who are less politically informed or less broadly educated than those already eligible to vote.” Those who take this view to its “logical” conclusion are compelled, by this “logic,” to deduce that more democracy is bad. (Uncoincidentally, this is the very same argument chauvinists and white supremacists used to oppose voting rights for women and black Americans, paving the way for rigged literacy tests.)

Jones concludes his presentation suggesting we have more appointed, rather than elected, political leaders. He quotes Jason Brennan, Professor of Strategy, Economics, Ethics, and Public Policy at the McDonough School of Business at Georgetown University, and Thomas Jefferson. The former, in a fit of illogic verging on the embarrassing, insists “Citizens have a right that any political power held over them should be exercised by competent people in a competent way. Universal suffrage violates this right.”

The latter Founding Father—who himself, fittingly, opposed democracy for fear that democratic forms of political organization would necessarily lead to attempts to create democratic forms of economic organization, or, in other words, anti-capitalist uprisings (as were seen in incidents like Shay’s Rebellions, which, as historian Howard Zinn reminds us, inspired the anti-democratic slave-owning architects of the US to create “a strong central government” in order to “suppress working class rebellions, to suppress slave rebellions, to protect settlers and expansionists who move into Indian territory”)—chimed that “our liberty can never be safe but in the hands of the people themselves, and that too of the people with a certain degree of instruction.” Who exactly is to be responsible for this “instruction”? Why, the propertied ruling class, of course.

Bourgeois Philosophy Says the Bourgeoisie Should Rule

Garett Jones, an economist from a Koch Brothers-funded college, advocates what he calls “epistocracy,” that is to say, a euphemism for a technocratic capitalist dystopia in which decisions are made by the “knowledgeable” (in other words, the educated; in other, other words, the rich; in other, other, other words, the bourgeoisie).

The criteria by which the “knowledge” on which his ideal society is based is measured are of course conveniently absent from Prof. Jones’ social blueprint. Presumably because he does not value all knowledges.

Knowledge is a social construct, shaped by political-economic ideology. Kant famously conceived of philosophy as the critique of knowledge. Foucault devoted a good chunk of his corpus, in his “archaeologies,” to the study of the change and development of human knowledge. He divided human history into a series of periods in which a particular kind of knowledge, what some might call an epistemological “Zeitgeist,” took precedence. Even epistemology, the philosophical inquiry in what he know and how we know it, is based on particular values, presuppositions, principles. These are what Fouacult called the “epistemes,” or “discursive formations” that stand as the hallmarks of particular historical phases. It is to the enunciation and elaboration of these ideas, in an historiographic framework, that his 1966 opus The Order of Things and 1969 The Archaeology of Knowledge, among others, are devoted.

Jones’ conception of knowledge carries none of these subtleties whatsoever. It is a value-laden, thoroughly bourgeois one. It is a colonial system in which the knowledges of those outside the capitalist, white supremacist, Eurocentric ideological paradigm are wholly devalued, in which utmost precedence is bestowed upon the non-empirically substantiated conjectures of the classical liberal intelligentsia of the so-called “Enlightenment”—those who perverted science and disguised “bourgeois relations” as “inviolable natural laws,” to quote Marx.

Unsurprisingly, Jones is by no means a marginal economist. Nor is he in any way anomalous in his field. In fact, he is highly regarded, and his dark Weltanschauung is representative and reflective of his fellow academic ilk. He serves as Associate Editor for the New Palgrave Dictionary of Economics, Editorial Board Member for the Journal of Neuroscience, Psychology, and Economics, Co-Editor of Econ Journal Watch, an Co-Host of the Adam Smith Reading Group.

On his university website, the professor notes he has “worked on Capitol Hill,” in order to help the neoliberal US government more blissfully further ingratiate itself in neoliberalism. He served on the US Congress Joint Economic Committee in the summer of 2004, where he remarks he drafted “policy papers on Social Security ‘reform’ [read: gutting] and other economic issues.”

He also indicates that he “speak[s] on policy topics regularly in the media and in the Washington, DC, area,” and has appeared in C-Span’s Washington Journal, the Washington Post, the Wall Street Journal, Bloomberg BusinessWeek, Fox Business, the New York Times, and more.

Nay, Jones is in many ways metonymic of the entire capitalist system he so faithfully admires. What makes Jones different from his economic ecclesiastical brethren is simply the fact that he has the chutzpah to openly say what so many other bourgeois economists are thinking deep-down.

Among Jones’ other gems of research are articles about how “the presence of American troops typically led to higher economic growth in host countries during the second half of the 20th century,” which he hopes “encourage others to look more closely at the micro-level institutional mechanisms whereby a U.S. troop presence can improve long-run economic performance,” to “better explain the positive relationship between military deployments and the wealth of nations.”

Jones also has done extensive work in IQ studies—a field full of unapologetic racists who claim that (pseudo)science convincingly “proves” that white people are “smarter” than black people and Latinxs and that men are “smarter” than women (just as eugenics “proved” that Europeans were superior). His support for epistocracy is doubtless rooted in this fetishization of “knowledge” with the supposedly “objective” metric of IQ.

One wonders if the neoliberal economist also secretly thinks that black people, Latinxs, women, and poor people should not vote, as, were they to not do so, and were the “knowledgeable” rich white men to decide who should run society, inflation would supposedly be lower, the economy would allegedly run more smoothly, politics would purportedly be more “efficient.” If so, he might have chutzpah, but not enough to openly make such preposterous remarks.

The fact that IQ and class are inextricably linked is conveniently absent from this discussion. When one takes even the scantest of looks at the large body of scientific research on the subject, one will see that epistocracy is quite simply rule by the rich. As professor Bruce Charlton writes in the Times Higher Education, the “existence of substantial class differences in average IQ seems to be uncontroversial and widely accepted for many decades among those who have studied the scientific literature. And IQ is highly predictive of a wide range of positive outcomes in terms of educational duration and attainment, attained income levels, and social status.”

Or, as Dr. Charlton writes elsewhere, the “basic facts on Class and IQ are straightforward and have been known for about 100 years: higher Social Classes have significantly higher average IQ than lower Social Classes. For me to say this is simply to report the overwhelming consensus of many decades of published scientific research literature.”

Capitalism Is Anti-Democratic

Capitalists often claim that socialism is the “opposite” of democracy. Equating socialism with oppressive bureaucratic tolitarianism (a descriptor that applies equally well to the contemporary’s US’ neoliberal capitalist system, one might add) is one of their oldest reactionary tricks in the book. As with so many things reactionaries say, nevertheless, this is not just completely false; it is in fact the antithesis of what is true. Dr. Jones—like right-“libertarian” apostle Ayn Rand, who wholly abhorred democracy—shows capitalists’ true colors.

Rand, the idol of so many an economist and US politician today, described democracy as “a social system in which one’s work, one’s property, one’s mind, and one’s life are at the mercy of any gang that may muster the vote of a majority at any moment for any purpose.” “Democracy is a totalitarian manifestation; it is not a form of freedom,” she screeched.

This is the extreme, concentrated anti-democratic strand at the heart of capitalism. There is no denying it. Some have simply tried to cover it up, with a thin layer of the soot that is left of the scorched remains of the working class. Others, like Jones, are more brazen. The opinions of the “unknowledgeable” masses who may be offended by such “scientific” observations appear to be of little consequence.

Pablo Iglesias, the leader of Spain’s enormously popular leftist grassroots party Podemosin a February 2015 interview on Democracy Now, insisted that “If we don’t have democratic control of economy, we don’t have democracy. It’s impossible to separate economy and democracy.”

Iglesias is right. There is no democracy without democratic control of the economy—i.e., socialism. A system of private control of capital—i.e., capitalism—is nothing but the tyranny of the propertied.

Liberal capitalist “democracy” is only a “democracy” insofar as it gives the masses a minuscule spectrum (e.g., the two factions of the Business Party in the US, the Democrats and Republicans) within which to request minor changes—preponderantly mere cosmetic ones—to the capitalist political-economic system that rules over them without the slightest of regards for their consent. And it does this while simultaneously robbing them, exploiting them, pillaging the surplus value of their labor, and of the labor of workers in colonized and/or occupied nations in the periphery upon which “their” economy thrives, as does a leech on a host, or “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”

Ben Norton is a freelance writer and journalist. His website can be found at http://BenNorton.com/.

 

Koch brothers pledge to spend nearly $900 million on 2016 US elections

By Patrick Martin
January 2015
World Socialist Web Site

 

In a staggering display of aristocratic arrogance, billionaires Charles and David Koch announced Monday that they would spend nearly $900 million to elect ultra-right candidates, mainly Republicans, in the 2016 presidential and congressional elections.

The Koch brothers are the fifth and sixth wealthiest individuals in America, with about $40 billion apiece, most of it derived from their privately held Koch Industries, which has expanded from its base in the oil industry to include a vast array of manufacturing and other assets.

Spending nearly $1 billion on the 2016 campaign will barely make a dent in that fortune. The Koch brothers spent nearly $400 million in 2012 in a failed effort to elect Republican presidential candidate Mitt Romney and a Republican majority in the US Senate, although they contributed significantly to the Republicans’ success in holding the House of Representatives.

In the 2014 campaign, they underwrote the successful Republican campaign to win a Senate majority, and now they hope to put a Republican in the White House in 2016. Four Republican presidential hopefuls—Wisconsin Governor Scott Walker, and senators Rand Paul, Marco Rubio and Ted Cruz—appeared before a fundraising conference sponsored by the Koch brothers last weekend in Palm Springs, California.

Koch Brothers=EvilThe conference included several hundred wealthy donors who have joined the financial network set up by the Koch brothers over the last three elections to boost ultra-right candidates for federal and state office.

The Koch brothers have already carried out a partial takeover of the Republican Party, through the Tea Party campaigns largely financed by Americans for Prosperity, one of their major vehicles for funding right-wing campaigns. The Tea Party groups are not genuine expressions of popular sentiment, but organizations established and financed at the behest of a small group of right-wing billionaires, including the Koch brothers, to push the US political system even further to the right.

At the Palm Springs conference, Koch representatives revealed plans to promote other front organizations, including the LIBRE initiative, targeting Hispanics, Generation Opportunity, targeting young people, and Concerned Veterans for America, aimed at military personnel and veterans.

The amounts of money being raised are qualitatively new. In the 2012 elections, the Republican National Committee and the party’s campaign committees for the Senate and House of Representatives spent a combined total of $657 million. The Koch brothers plan to spend far more than this in 2016.

A spokesman for the billionaires’ campaign finance arm, Freedom Partners, estimated their budget for 2016 at $889 million, more than the Obama reelection raised in its record-breaking fundraising in 2012, and about what both the Democratic Party and the Republican Party have planned on spending for 2016.

The Koch brothers are only the most extreme manifestation of a process that has developed over many decades and involves both capitalist parties in the United States, the Democrats as much as the Republicans.

Over the past two decades, campaign spending has soared exponentially, even as the actual level of popular support for and participation in the Democratic and Republican parties has declined precipitously.

In the 1980s and 1990s, it was a political rule of thumb that $20 million was a sufficient war chest to wage a credible presidential campaign in one of the two big-business parties. By 2012, that sum would be expended on a single contested congressional seat (one of 435 in the House of Representatives). Senate campaigns regularly top $50 million, even $100 million. Presidential campaigns cost a billion or more.

The 2012 election, the most expensive in history, saw more than $6 billion in campaign spending, up from the previous record of $5.3 billion in 2008. Prior to the Koch brothers’ announcement, election observers had estimated that the 2016 campaign would cost $8 billion. Now even that figure may be far too low.

Hillary Clinton, the Democratic frontrunner, is expected to raise $1.5 billion to $2 billion for her primary and general election campaigns, relying heavily on the network of Democratic Party-aligned multimillionaires cultivated over the course of the past two decades.

The bulk of the funding for both of the capitalist parties comes from the super-rich, not the small contributors who send in money through the mail or over the Internet. A recent study found that the 100 biggest campaign donors accounted for more funds than all 4.5 million people who gave $200 or less to Democratic or Republican candidates.

In the wake of a series of reactionary Supreme Court decisions, culminating in the notorious 2010 Citizens United case, which struck down all limits to corporate and individual contributions, the defenders of the existing system of buying campaigns and candidates have relied on equating money and speech. Any limit on financial donations would be a limitation on the “free speech” of billionaires, and thus violate the First Amendment, they argue.

However, if they chose to do so, the Koch brothers have enough wealth to buy the total advertising time of every television and radio station in America—meaning they could exercise their right to “free speech” by silencing every other voice in the country.

This is, for all practical purposes, the state of affairs during September and October of election years. Political action committees financed by billionaires, as well as the two corporate-controlled parties, saturate television, radio and increasingly the Internet with mind-numbing, stupid and reactionary messages, whose combined effect is to suppress critical thought, alienate potential voters and promote abstention from the corrupt and antidemocratic electoral process.

The Koch Brothers’ Governors: Butlers Selling the Public’s Silver

A Dress Rehearsal for Hillary?

By Jeffery Sommers and Michael Hudson
December 13, 2014
Counter Punch

 

Koch-brothers

The Koch Brothers are the closest thing the United States has to Russia’s oligarchs. They fuse ownership of the economy and state, using the latter to enrich themselves while making private gains through the public’s losses. Their idea of a “market economy” is to buy government officials and the assets they privatize at giveaway prices.

The top three butlers at the Koch’s nouveau riche ‘Downton Abbey’ are Governors Sam Brownback of Kansas, Wisconsin’s Scott Walker, and Chris Christie of New Jersey. All three ran elections based on the anti-Keynesian oxymoron of promoting job creation by balancing budgets with regressive tax plans. All declared that cutting taxes (chiefly on their wealthy campaign contributors) was the way to achieve their goal (more campaign contributions). All have served at least one term in office and the results are in: Their rates of job creation and income growth are way below the national average. Rather than closing budget deficits, tax cuts create them – providing more excuse to privatize state assets, post-Soviet style.

Brownback simply hopes to stay on the job as governor of the state where the Kochs’ corporate headquarters are located. Despite flagging poll numbers, he remained in office thanks to a mildly tawdry incident involving his Democratic opponent’s youthful visit to a strip club (in the era of talk radio and Fox News, anything can be manufactured into a scandal). Christie and Walker, by contrast, have presidential aspirations and are raising funding as the two top prospects from the Kochs’ political farm team.

The looming public danger ahead is how these Koch governors will ‘repair’ the fiscal potholes their tax policies are creating. Chanting the GOP refrain of ‘lower tax rates good, higher taxes bad’ as their stage-magic abracadabra, they proselytize Arthur Laffer’s cocktail napkin ‘Laffer Curve’ depicting lower tax rates delivering higher tax revenues as a sacred scroll – its inevitable failure leading to privatization of rent-extracting opportunities in a Yeltsin-like post-Soviet policy under the banner of free markets.

All three Koch Governors are following this fiscal folly of widening budget deficits. The effect is to force more cutbacks in public services, with sermons exhorting voters to tighten their belts while the Kochs gorge themselves on the tax cuts enacted by their pet governors.

Christie and Walker are the two governors with the most to lose by reciting the same tax-cutting catechism that Brownback parroted while driving Kansas into insolvency. Walker ran for re-election largely on having eliminated a $3.6 billion budget shortfall while cutting taxes and – more to the point – by cutting public employee benefits while holding most state wage increases below the rate of inflation. Christie likewise originally ran on closing deficits. Both now find themselves big budget deficits after serving a term with the policy they would like to impose on the nation at large.

Christie and Walker both sought to finance budget deficits and tax cuts (chiefly for the wealthy) by reducing living standards for public sector workers. But the deficits have re-appeared, while the cuts to public worker compensation have reduced consumer spending at local restaurants, taverns, car dealers and the innumerable goods and services tendered by New Jersey and Wisconsin businesses.

Christie and Walker pretended that cutting inflation-adjusted wages and benefits would not reduce consumer demand if the ‘savings’ were spent by the taxpayers enjoying lower tax bills. This argument ignored the obvious fact that the tax cuts go disproportionately to the wealthiest. As every economic textbook for the past century has taught, the rich typically spend and invest more of their money out of state, or simply buy more Wall Street stocks and bonds and foreign luxuries. The supposed savings thus escape Wisconsin, slowing economic growth – and hence, state tax revenue!

Christie and Walker are now facing deeper deficits after their tax cuts. Governor Walker no longer has a balanced budget. New Jersey’s shortfall for this year was close to $1.6 billion. Christie was counting on revenues from the state lottery to serve as income transfer from the poor and working class to pay for his tax cuts to the rich. But lottery revenues have fallen short. So he is trying to make up by cutting state payments to the pension system. As for Wisconsin’s state deficit, it is projected to widen to $2.2 billion.

Just as important as how much tax is collected, is how it is collected – who/whom? The aim should be to structure tax policies in ways that maximize wealth creation. But Governor Christie and Walker’s tax policies cut the bone, not the fat.

Their political dilemma is that their ‘tools’ of income and property tax cuts have not ‘repaired’ their respective budgets. The danger is that their pursuit of the 2016 GOP presidential nomination will lead them to use the next ‘tool’ in today’s class war arsenal: weaponizing fiscal policy to sell off the public domain.

Governor Walker has led the way by trying to sell state land and power plants in no-bid contracts. The idea is for privatization sell-offs to raise enough short-term revenue to allow the Koch Governors to wave the banner of fiscal rectitude, just in time for the 2016 presidential primaries.

But this will sell their states’ ‘family silver’ of land, power plants and other basic infrastructure that has been kept in the public domain to benefit taxpayers by keeping their basic infrastructure prices low. Selling off this public property, currently owned free of debt, would provide rent-extraction opportunities for the buyers. It would turn their taxpayers into rent payers for the services of the assets they formerly owned free and clear. The new prices for hitherto public services will include debt servicing charges, management charges, the cost stock dividends, and whatever rack-renting the new owners can squeeze out of the public.

To be sure, there is room for investigating whether a private vender could better manage our state-owned power plants, or if a private developer should construct and manage buildings on public land to maximize revenue. But this is different than selling the underlying assets owned by taxpayers.

Tax rates can be lowered or raised in response to budgetary needs – and to pay for errors by past political office holders. But once public assets are sold, they cannot easily be re-acquired. The long-term fiscal damage from their sale is permanent. That is what England learned from the devastating wave of Thatcherism. It raised the fees that taxpayers must now pay for transportation, water and other hitherto public services that have been privatized and financialized. They lose more paying such rents than they saved in the tax cuts (financed by much higher public debt levels).

The problem with New Jersey and Wisconsin is that unlike Britain, whose economy was saved by North Sea oil revenues coming online just when Thatcher’s policies were cutting demand in the economy, these states have no such natural resource windfall to save them from the short-term fixes to the budgetary shortfalls that have been created by tax cuts benefiting the most affluent.

Beyond New Jersey and Wisconsin, the whole country needs a more enlightened discourse on wealth creation. Blanket lowering or raising taxes will not balance our state budgets or deliver prosperity. The aim should be to make the tax structure more progressive, and to incentivize investment over speculation. What must be avoided at all costs is selling off public infrastructure. This Koch ‘tool’ will not ‘repair’ our budgets. It risks shattering budgets, and also the middle class. Selling off public property returns the public to their role as peasants on the Kochs plantation.

But here’s the real nightmare: President Obama has been giving speeches warning about the nation’s deteriorating bridges, roads and other infrastructure. This sounds like a Grand Bargain in the making by the Democratic ‘Rubinomics’ and Koch crowds to raise the funds to ‘fix’ America by privatizing bridges and other infrastructure that have been starved of maintenance as a means to balance local budgets in the face of cutting taxes for the rich. A Democratic Congress might block Koch tax cuts on the national level – but a Democratic presidential victory could restore Obama-Clinton style neoliberal policies to out-Koch the Koch brothers by engaging in privatizations as a means to both restore our infrastructure, while levying a de facto tax on the middle class in the form of tolls and fees going to private investors for infrastructure currently paid for by general government revenues.

In short, the 2016 presidential election could be another example of ‘heads you lose, tails you lose’ with either the Democrats or Republicans. The best chance of staving off this ‘casino fix is in’ is to focus on electing progressives to the Congress rather than ‘investing’ in a Hillary victory for 2016.

Jeffrey Sommers is an associate professor at the University of Wisconsin – Milwaukee and visiting faculty at the Stockholm School of Economics in Riga. His book with Charles Woolfson, The Contradictions of Austerity: The Socio-economic Costs of the Neoliberal Baltic Model  is available from Routledge.

Michael Hudson’s book summarizing his economic theories, “The Bubble and Beyond,” is available on Amazon. His latest book is Finance Capitalism and Its Discontents.  He is a contributor to Hopeless: Barack Obama and the Politics of Illusion, published by AK Press. He can be reached via his website, mh@michael-hudson.com