May 29, 2011

Corporate Welfare, Austerity, and Public Sector Unions

Filed under: Disaster Capitalism, Neo-feudalism — Tags: — Russ @ 5:39 am


Since I put some thought into this intended comment at Naked Capitalism and it got eaten, I’ll post it here instead. It’s about the right viewpoint on public sector unions. Anarchists want to get rid of government, so it follows that we also want public sector employment and its unions to wither away. The jobs which are potentially real should become citizen jobs, those which aren’t should cease to exist. All unionism should be anarcho-syndicalist.
But that doesn’t mean getting on the austerity bandwagon. On the contrary, we who really want to shrink government must focus our counterattacks on corporate welfare and welfare for the rich. The state employee bloat is peripheral. Indeed, for tactical reasons we need to stick up for any non-rich group, statist or not, who is in a death struggle with the kleptocracy.
So here’s the comment I was replying to:

The comments here have become totally lunatic. Of course these people are not going to attack Greece.

The underlying issue here is how to run an economy from a fiscal point of view. The conventional wisdom is that what you need to do is balance the budget across the business cycle, that is, deficit in recession, surplus in boom.

There’s a lunatic chorus here which seems to think that all you have to do is get your own central bank and print as much money as you feel like.

Well, its been tried. It always ends in tears. The problem with Greece is not membership of the euro. The fiscal policies Greece was following would have ended in a crash regardless of whether it were in the euro. You simply cannot have a public sector with the salary and pension arrangements they had, and finance it from borrowing as they did. It is not sustainable, and what cannot be sustained will not continue.

What was going on in Greece was looting. Of course what went on in the US prior to the recent crisis was also looting. Looting is not the sole province of the banks. Any group that has a chance will loot. They will use the government to do it at every opportunity.

Whether Greece is inside the euro or not, makes no difference. The country cannot afford that public sector or that level of spending, so it will come to a stop. They may have the finest revolutionary tradition in the world, its going to stop. Their problem is too small an economy to finance what they would like to be their lifestyle.

[The part about “attacking Greece” refers to the possibility of an actual military attack. While that may be an outlier idea, given our historical circumstances it’s certainly not “lunatic” to consider the possibility, even if only to quickly reject it.]
“The underlying issue here is how to run an economy from a fiscal point of view.”
Yes indeed. So what do the system’s actions prove?
“The conventional wisdom is that what you need to do is balance the budget across the business cycle, that is, deficit in recession, surplus in boom.”
Uh huh. And who does any part of this in practice? It was deficit in boom, and that really confuses cause and effect since the financialized “boom” was simply a criminal spree subsidized by the government. There hasn’t been any actual economic growth in decades, just the bloating of debt and bubbles.
Meanwhile, we still have an ever-escalating deficit binge in the incipient depression. It’s just that this government bingeing is nothing but looting the real economy and handing over the loot to organized crime. So the real economic effect of the deficit spending is to starve, certainly not the beast, i.e. the parasite, but the host, the people and the real economy themselves.
It’s the worst of both worlds: A counter-stimulus debt binge. That’s because it’s aggressive wealth and income redistribution from those who produce to worthless parasites.
Which leads us to this:
“The fiscal policies Greece was following would have ended in a crash regardless of whether it were in the euro. You simply cannot have a public sector with the salary and pension arrangements they had, and finance it from borrowing as they did. It is not sustainable, and what cannot be sustained will not continue.”
Certainly the public sector unions comprise a power structure patronage base. All this government bloat is parasitic as well. (Although I don’t know why a statist like yourself would complain about that.)
So now the elites want to liquidate this portion of their base (just like they’re liquidating all others; doesn’t seem very strategically sound to me). But they’re not proposing to reduce government spending the way deficit fear-mongers claim to want. Any money “saved” by liquidating the public sector unions isn’t going to be restituted to the taxpayer. It’s merely going to be redistributed upward to the gangsters. The Wisconsin budget isn’t trying to cut spending, but redistribute it from public workers to corporate welfare. It’s the same in Washington and everywhere else.
The morality of this is clear enough – government workers do at least some kind of work, while corporate elites are purely destructive parasites. So if a tax dollar has to be extracted and spent at all, morally better on teachers than on banksters.
In addition anyone who cares about that “conventional wisdom” you adduced above would recognize that government spending on worker salaries and benefits will circulate into the economy vastly more readily than handing over the loot to rich parasites who will just hoard it. So as a practical matter, anyone who believes in this system and who cares about “the fiscal point of view” would have to agree that if that tax dollar is going to be extracted at all, it’ll go to far better use being spent on public sector employees than on corporate welfare.
As for government spending being reduced in an absolute sense, the record proves that almost no one who claims to want that really wants it, since anyone who really wanted that would start with the bailouts, the wars, weapons spending, Big Ag subsidies, and the rest of corporate welfare and welfare for the rich. Only once all corporate welfare had been eradicated would one then turn to the relatively miniscule spending which can actually help people.
The fact is, citizen advocates against corporatism like myself are the only people who truly want to shrink government. For example, wanting the abolition of corporations (artificial, high-maintenance extensions of the government) as such is a litmus test for one’s position on Big Government.
“It always ends in tears.”
What could possibly bring more and worse tears than the ones already being inflicted by the criminal status quo?


  1. I am a bit confused as to the objective of this article, but that seems not so unusual and my confusion may simply be a reflection of ignorance. However, I thought that at least some of your readers might learn something from Ellen Brown’s recent article:


    Ellen Brown
    April 25th, 2011



    Inviting Chaos: The Perils of Toying With the Debt Ceiling by Ellen Brown
    Posted on May 28, 2011 by dandelionsalad
    by Ellen Brown
    Featured Writer
    Dandelion Salad
    May 28, 2011


    The take-home message is that in a sovereign nation which provides its own currency, purchases foreign goods and accepts as taxes only with that government/fiat currency, and which uses floating exchange rates, an emphasis on national debt and deficits may be misplaced. The emphasis should be on maintaining full employment and conservation of natural resources. Of course, when the government is composed of representatives of the super-rich or wealthy elite which represent only special interests (including foreign interests), priorities of the members of Congress, the Executive branch, and the judicial branch of government get modified accordingly. Thus, it is important that all citizens know how the basic systems are supposed to work. Ellen has gotten to the stage where she understands and appreciates some of the critical aspects of modern money economics (sometimes referred to as MMT). Unfortunately, those particular economists, upon whom President Obama relies, who are dictating policy as well as the majority of main-stream (monetarist or neo-liberal) economists apparently do not. As I have mentioned in earlier comments, this is unfortunate and results in mis-placed/mis-directed focus.

    The idea that the current administration doesn’t know how to solve our current economic crises is wide spread and deserved. When the three branches of US government are controlled by the banksters, the military-industrial-Congressional complex, and the other filthy-rich, selfish, irresponsible parties (who could care less about anyone other than themselves) sort of leaves us with a system which is going where we most likely don’t really want to go.

    If I understand Russ’s positions, his proposals seem to apply to individuals and small groups/communities. When dealing with large groups, which are necessarily/unavoidably heterogeneous, some sort of central government is a potential benefit in the context of coordination of conservation of resources, communication, facilitation of trade, and defense, etc. Unfortunately, we have a central government in which the various components function primarily as pawns for the wealthy.

    Old ideas about government and money and planning need to be updated; in fact, the Constitution should be updated instead of being all too frequently mis-/re-interpreted. Without going into details, I suggest that a focus on designing a new Constitution or blueprint for government be a primary focus of responsible citizens.

    Comment by William Wilson — May 29, 2011 @ 10:31 am

    • The objective of the article is to explain my ambivalent position on the death struggle of public sector unions, and along the way disparage the lies of deficit terrorists who really support deficit spending, but only for corporate welfare.

      It’s ambivalent because centralized government must and should dismantle, and that would necessarily include the class of government workers. But at the same time I don’t end up objectively siding with the austerians against them.

      Rather, I say support every target of the top-down assault even as we call for the devolution which may itself transform some of these targets into a radically different form.

      Just like with MMT itself, this falls into the category of my Bridge tactics.


      Comment by Russ — May 29, 2011 @ 10:49 am

  2. Please excuse some of the obvious confused statements and grammatical miscues. Some could be avoided if there were a ‘preview’ step prior to posting.

    Comment by William Wilson — May 29, 2011 @ 10:34 am

    • There’s no preview feature available. I don’t think any WordPress blog has it.

      Comment by Russ — May 29, 2011 @ 10:51 am

  3. There’s a new post up at Naked Capitalism about “entitlements,” another favorite bugaboo of those who want to make the public worker suffer first so that they can keep their corporate subsidies and private taxation power (i.e., Obama’s health insurance mandate).

    When I saw your post, I thought you might be referring to entitlements, as corporate welfare is a big one. It turns out you weren’t, but still it strikes me that the largest “entitlements” program we have out there is the corporate form itself, which has limited liability and is showered with all sorts of gifts from the state.

    There should be a way to redefine the term “entitlements” to focus public atttention (and ire) on corporate welfare and the corporate form.

    Comment by Tao Jonesing — May 29, 2011 @ 11:27 am

    • You’re right about that. (I saw that post too. A good example of how even the NYT’s best writer, which I think Morgenson is, is still hit-or-miss.)

      Ironically, calling them “entitlements” in the first place was part of the way they tried to differentiate these programs from “welfare”. But by now the term sounds bloated and porkish.

      I keep thinking about how to slap the right terms on corporatism. I still want to figure out how to make these stick: calling corporate extractions taxes, and corporate policies regulations.

      Since corporations are nothing but extensions of government, those characterizations are both true.



      I’m not sure how to help rename entitlements, although that’s not yet such a big problem since so far the people have been refusing to listen to the system propaganda on those.

      Comment by Russ — May 29, 2011 @ 2:07 pm

      • Russ said; “Since corporations are nothing but extensions of government, those characterizations are both true.”

        This is no longer true, government, through generational corruption, is now owned and controlled by gangster corporate pig interests lock, stock and barrel. Gangster corporate pigs are not an extension of government, they own and control the government. The government now functions as an exploitative overseer personnel department on behalf of the gangster corporate pigs.

        Unions are reactionary forces that initially owe their existence to the exploitative forces of gangster pig corporations and big business. Government unions parroted and coat tailed private sector unions in their creation and were generally always a step behind private sector unions until the gangster corporate pigs – again through now ever greater corruption – initiated the ‘easy money enslave all the masses program’ with cheap debt and counterfeit derivative products of that debt. During the debt run up government workers were encouraged to greater salaries and perks as part of intentionally creating a larger more expensive to run government that would be ever more dependent on the central bank debt. Think gangster corporate pig scum bag George Bush telling everyone to go to the mall and shop as a patriotic duty. That was all part of the same full spectrum dominance program of hooking people on cheap debt and trinkets.

        The beefing up of government unions and their on going maintenance cost is just another facet of the intentional acceleration of the perpetual conflict in the masses (something that not enough people are writing about because they are choking on the individual divisive baits being set out). By creating a block of well paid people in government to demonize when private sector workers were getting laid off they set the stage for the worker against worker conflict that is now going on.

        You are right Russ to side with the unions against the gangster corporate pigs. But the real solution is to limit ALL the pigs by setting a yearly maximum wage and a maximum asset owned limit – something that will come about in the new Constitution.

        You also have to attack unions at the same time and in the same way that you attack the gangster corporate pigs, by pointing out that they, regardless of their rationale, have broken their alliance with other citizens by demanding and taking an unequal and unreasonable share of resources and thereby limiting the opportunity of those other citizens. But yes, the union feeding at the trough is a mere drop in the bucket when compared to the gangster corporate pig feast.

        The right term to slap on corporatism is ‘gangster corporate pigs’.

        Deception is the strongest political force on the planet.

        Comment by i on the ball patriot — May 29, 2011 @ 6:10 pm

      • ‘easy money enslave all the masses program’

        LOL. This is the most succinct description of the corporatist project I’ve ever read, I think..

        Comment by paper mac — May 29, 2011 @ 6:30 pm

      • Just because the combination of bribery, extortion, ideology, and cowardice enables the corporate pigs to dictate government policy doesn’t change the fact that they are purely dependent appendages of the government.

        A land baron surrounded by surly peasants may be able to tell the government what to do, but it’s obviously he who is in the completely dependent position.

        Enforcement of propertarianism depends upon aggressive government, while the very existence of corporations is nothing but a government program.

        But the real solution is to limit ALL the pigs by setting a yearly maximum wage and a maximum asset owned limit – something that will come about in the new Constitution.

        Well, I don’t believe in reformism, and I wouldn’t bother trying to change the written Constitution for the sake of it. The sovereign constitution demands something more intrepid.

        Comment by Russ — May 30, 2011 @ 6:11 am

      • I don’t believe in reformism either – of the existing system! And I don’t equivocate on the issue as I believe that when you attempt to work with the gangster corporate pig system you only serve to legitimize and further empower it. That belief is embodied in something that I have said many times before; “People who vote are the problem!” You de-legitimize the gangster corporate pigs by shunning THEIR government. It is NOT the people’s government. The gangster corporate pigs are firmly in control. Yes, you have to obey the law but you do not have to respect it. The work to be done is to build a new government outside of the existing system.

        And that greater reformism needed outside of the system, for the sake of sustainability, will require setting reasonable limits on consumption and asset wealth of ALL individuals.

        Corporations, free of the structural pig greed motive, could turn to producing the wind power turbines you mention in today’s piece. What could be more intrepid than that?

        Deception is the strongest political force on the planet.

        Comment by i on the ball patriot — May 30, 2011 @ 9:33 am

      • I don’t believe in reformism either – of the existing system!

        Yes, but you want to continue with corporations, the wage system, income and wealth inequality, and wealth concentration as such, you just say you want to restrain these. Isn’t that just wanting a change of leadership within the same basic framework? A “new government outside of the existing system” – but we know that centralized government itself is no good.

        And haven’t those already been tried and failed?

        The truth is, it sounds like I’d still have to be a dissident under your system. It’s not council democracy or worker control, nor is it even claiming to be headed in that direction.

        Am I misunderstanding you?

        Comment by Russ — May 30, 2011 @ 3:02 pm

      • NO its NOT the same framework.
        It is vastly different as I have described it and it is not centralized government.
        It has not been tried and therefore has not failed.

        “Am I misunderstanding you?”

        Obviously so!

        Deception is the strongest political force on the planet.

        Comment by i on the ball patriot — May 31, 2011 @ 6:51 am

  4. I can’t take seriously any argument which draws an equivalency between something like Greek public sector “looting” and the colossal, historically unprecedented plundering perpetrated by the American financial sector. I am not a particularly big fan of public sector unions in this country (the police unions are murderous abominations, the ones in Ottawa have carved out an unassailable niche filled with an exclusive ethnolinguistically restricted club of mandarins, etc). That said, it would not even occur to me to attack them on a fiscal-sustainability basis. To do so is simply to mouth the propaganda of the elites, the slavish insistence that all of these funny-money debts which were supposedly incurred on our behalf are real and must be paid back with a pound of flesh if necessary.

    Comment by paper mac — May 29, 2011 @ 5:01 pm

    • Yes, it’s nothing compared to corporate welfare. So if “fiscal sustainability” were really an issue, no rational person would start anywhere but there.

      But as usual, the deficit whiners really don’t care about the deficit at all, but are rather angry that there’s a single dollar somewhere which hasn’t yet been stolen by the banksters and corporatists.

      (I’ll be discussing the same phenomenon in a different context in tomorrow’s post.)

      Comment by Russ — May 29, 2011 @ 5:52 pm

RSS feed for comments on this post.

Sorry, the comment form is closed at this time.

%d bloggers like this: