What to Do with the Anti-Government Outrage

alan simpsonA “send this to 20 of your friends” e-mail landed in my inbox, brimming with indignation about government malfeasance. Its target: Alan Simpson, a decorum-challenged former Senator who suggested that Social Security recipients were parasites. The energy of the outrage was attractive, but the e-mail itself was so full of inaccuracies and omissions, it skated past the real issues.

Inaccuracy #1: “Social Security [is] a Ponzi scheme.” Ponzi schemes require a) fraud, and b) someone profiting from it, and neither is true of Social Security. Social Security costs 2% to administer while privatized systems like Pinochet introduced in Chile (since the recipient of a government bailout) need roughly 11%.

Inaccuracy #2: “[You government] idiots mismanaged the economy.” The genesis of the Great Recession came from the unregulated private sector. Yes, the government did deregulate lenders, making it all possible, but even that was at the private sector’s initiative. And even though Fannie Mae did buy some sub-prime loans, at no time were they more than 14% of their portfolio, and they were clearly following, not leading the charge into “Liar Loans.” (Paul Krugman’s blog has details.)

Omission #1: Wall Street’s criminality. Eighty percent of public pension problems stem from this. It may be a shame that the Obama administration continued Bush’s wars and torture, but it’s worst failing is a Justice Department that has prosecuted less than a dozen cases in a scandal 40 – 100 times larger than the S&L scandal of the Reagan/Bush 41 years–a scandal that prompted literally thousands of prosecutions. Bernie Madoff is in jail because he turned himself in.

Omission #2: Tax favors for the wealthy. Congress did not spent too much, it lowered taxes on the rich without cutting spending–a strategy called “Starve the Beast,” explicitly endorsed by the right. The needless “debt crisis” stems from this starvation.

About that “crisis”:

Q: Does lending to a government that legally issues money, unconstrained by commodity (gold / silver) backing entail risk?

A: Lending to government is riskless; it can no more run out of its sovereign currency than a scorekeeper can run out of points at a sporting event.

The Fed knows this too: it created more than $16 trillion to help to failing businesses during the worst days of the sub-prime meltdown. The real outrage is that private banks receive far more money than any social safety net program would need, but the proposed cuts impact only safety net programs.

Omission #3: Government, it is not some alien “other.” It’s us. At least Obama got this much right.

Ironically, our government is clearly corrupt. Given the lack of Wall Street prosecutions from the Obama Justice Department this administration will be the most corrupt in U.S. history. True corruption allegations, like those cited above, are seldom mentioned since prosecuting Wall Street would jail some politically powerful people. Far more likely you’ll hear “Social Security is a Ponzi scheme,” or that “Spending is out of control,” or, if all else fails, that the gay married Hispanic terrorists in the woodpile are coming to get you.

Nevertheless, government is one of the last few barriers preventing a kind of feudal oligarchy (if that hasn’t already arrived). The constant drumbeat of false corruption allegations like those above is in the service of those oligarchs. Targeting a right-winger like Alan Simpson is just incidental misdirection, designed to confuse.

My advice: beware of outrage. As hard as it is to remain alert in guiding your emotions, that beats turning away in disgust. Then the oligarchs can do anything they want.

Adam Eran

Published by the LA Progressive on October 4, 2011
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About Adam Eran

Adam Eran is a dynamic figure, often seen scaling walls and crushing ice. He has been known to remodel train stations on his lunch breaks, making them more efficient in the area of heat retention. He translates ethnic slurs for Cuban refugees, and writes award-winning operas. He manages time efficiently. Occasionally, he treads water for three days in a row.

Despite the many proposals of marriage he receives that seem to believe so, Adam Eran is not a super hero. Instead, he is a concerned public citizen of the capital of California with an active library card, enough education to be a danger to himself and others, and enough experience not to take himself too seriously. OK, that last part isn't true.

The name itself means "man awake."