TRUTH ADDICT

Austerity Measures and ‘The economics of subfascism’

November 15, 2011   ·   0 Comments

Source: NYTX

By Michael McGehee:

Despite the fact that the New York Times (NYT) doesn’t seem capable of discussing the roots of Europe’s debt crisis—or that of the U.S.—it is also incapable, or unwilling, to discuss why “austerity measures” are the wrong way to go, and what such measures truly represent. Whereas in Europe it has been low corporate taxes, and other economic benefits to multinational corporations and financial institutions, in the U.S. it has been a combination of historically low taxes and the exorbitant costs of having, maintaining and expanding a nuclear-armed imperial police state, that best explains the “debt crisis.” That the targets of “austerity measures” has been largely aimed at the working class is only an added insult to the injury of the NYT’s failure to accurately cover “the crisis.”

In their book The Washington Connection and Third World Fascism: The Political Economy of Human Rights: Volume 1, authors Noam Chomsky and Edward Herman note that,

The old colonial world was shattered during World War II, and the resultant nationalist radical upsurge threatened traditional Western hegemony and the economic interests of Western business. To contain this threat the United States has aligned itself with elite and military elements in the Third World whose function has been to contain the tides of change.

According to Herman and Chomsky, “Torture, death squads and freedom of investment are related parts of the approved model sponsored and supported by the leader of the Free World.” The new colonial world consists of the “dominant power” (i.e. the U.S.) and its “subfascist” client states. There is even an “economics of subfascism”:

The economics of subfascism involves a rapid shift to a wide open door to foreign trade and investment, tight money, and social welfare budget cuts—that is, the economic policies called by the interests of the dominant power and its institutional affiliates, the IMF and World Bank. Priority is given to servicing the foreign debt via increased exports and decreased imports, with the burden falling largely on the underlying population in the form of reduced wages and serious unemployment. There is a return to the “free market,” in theory, but it is selectively applied, with no serious control over monopoly power, employer organizations and collective action, but with control over wages, both directly and by means of a banning of strikes and the destruction or state control of unions.

This reads a lot like the austerity measures being imposed in debt-stricken nations in Europe, and that are in the process of being carried out in the U.S. While “torture and death squads” are not a likely feature of things to come in the West, the restructuring of the economy to favor foreign investors at the expense of a country’s political and economic independence, and the much more severe effects on the vulnerably working poor, is presented as a model of “subfascism.” That the developed world, which has long been exempt (and which explains why they are “developed”), is being subjected to the perfidy of global capitalism is illustrative of the current state of affairs, and something that warrants serious consideration.

While the New York Times has “all the news fit to print” there is apparently not much room in it to point out that the debt of Greek is largely due to providing an investment atmosphere preferable to the foreign investors through mechanisms like low corporate taxation. So while Floyd Norris, a Times correspondent, can rightly say that “[r]ather than face the fact that Greece’s inability to collect taxes was a major cause of the crisis,” as he did in a recent article, there is not one mention of corporate taxes, which are already low—lower than corporate tax rates in the U.S.—and being targeted for more cuts which makes it “hard to see the rest of Europe agreeing to finance.” Not to mention the people of Greece who will also “finance” the lowering of corporate taxes (so as to be even more friendly to foreign investors) with “the burden falling largely on the underlying population in the form of reduced wages and serious unemployment” and “social welfare budget cuts.”

Herman and Chomsky explain that with a “propaganda model” one can predict how the media will respond to events based on their relation to power. When something is not favorable to the ruling establishment we expect to see “a stripping away of the crucial historical context, [and] a high moral tone” because

the volume of “information,” the tone, the emphasis and the interpretation are loaded with bias in favor of the doctrinal system preferred by those in power, and they function to implant in the public mind selected truths with all the effectiveness of a system of government censorship.

The “line” dispensed in this fashion by the Free Press conforms well to the economic interests of the U.S. multinational corporations and other large interests of dominant social groups.

This can be tested with simple examinations of the media. The article by Norris is one, as well as a recent article by Alan Cowell. In “New Austerity Incites a Bitterness the Postwar Generation Did Without” we are told in “a high moral tone” how “Europe seems to have lost sight of the fact that it has been there before.” Readers might cringe at the audacity to compare the “hardships” imposed by global finance to the struggles of post-World War Two where Europe was devastated by war. But there may be something to it. It is true, that Europe has endured the tyranny of fascism before. That, however, is no legitimate argument for a repeat.

The rest of the article is the propaganda line about how “politicians [are] slowly and reluctantly confront[ing] the reality that the bounty days are over.” Cowell routinely beats around the bush on what the “bounty days” are and uses vague language like “the legacies of economic ill-discipline,” but there is a clear implication that it is social welfare that is not only the “bounty” and “ill-discipline,” but the cause of “the crisis.” An alternative interpretation of the comment, and one that is more honest, is that we can’t have our cake and eat it too. We cannot cater to both the general population and the Lords of Capital. Something has to give. Someone has to go on a diet. And what Cowell is rationalizing is the argument for a diet imposed on the working poor so global finance and multinational corporations can continue feeding at the trough. During the height of subfascist rule in Latin America the Catholic Church had “the preferential option for the poor,” but today in the West, with no one around to come to the aid of the working poor, there is only “the preferential option for global finance.”

The New World Order that was created after World War Two had an ideological feature to it: anti-communism. It was useful to undermine efforts of national liberation or to scale back any attempts to seek independence and spread the wealth more equitably (a vicious crime to the leader of the Free World). All the U.S. had to do was cry “Communists!” and intervention was pretty much a sure thing, and the media was right there to offer their services. The Empire often warned of the “domino effect.” If the U.S. allowed one country to gain independence then others might fall. This was unacceptable. But the real domino effect, unlike the mythical “International Communist Conspiracy,” was how “subfascist” regimes were established all over the planet.

It is with this historical background that makes it all the more interesting that Cowell would quote a law professor who said of the austerity measures that, “Now the dominoes will move west.”

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