We’ve already discussed at some length how increased spending, especially in medical entitlements, will ultimately lead to a serious budget and currency crisis. While no one knows exactly how or when the crisis will unfold, we can make certain predictions about the US government’s response. It’s reasonable to suggest they will act similarly (although not identically) to Europe in their aggressive attempts to centralize power, expand austerity and sell off public assets for pennies on the dollar.
In Europe, the technocrats have treated Greece like a defeated Germany after World War I. Unrealistic promises of payments and prosperity have continually been broken and sovereignty has been stripped from the Greeks. Austerity is so severe, their public workers are expected to work for free and in some cases for negative salaries; without warning the government actually demanded workers return some of their paychecks.
Meanwhile, public property like national monuments, roads, beaches, waterways, and more are at auction for less than their true worth, while the fiction that this is transfer of wealth is much better than default continues unchallenged. The war on Greece is cleverly disguised, but the motivations involved and the financial effect on the citizens of Greece is the same as many of mankind’s bloodiest wars.
The United States however has the option to do what the European Central Bank wishes it could do. It can print, devaluing the currency and effectively stealing from everyone simultaneously to maintain bank balance sheets around the world, but despite claims to the contrary, austerity will be used simply because the corrupt corporate forces that control the government will demand it.
The push for privatization has continued to increase, even as the public is becoming increasingly aware of what that means. Privatization of public property has extended to the prison system, the military, education, food production, health care, domestic spying, environmental policy, debt collection and more, often with minimal or no positive revenue for governments. The privatization of Social Security and transfer of those assets into the stock market is often suggested as a positive step toward restoring that program’s fiscal outlook, even though many argue the program doesn’t need fixing, merely tinkering.
Right now, historic sites are up for auction in Maryland. Dozens of public parks and historic sites have been closed in New York state. There’s even some talk (although just talk at this point) about selling off national parks. That national parks actually generate revenue is not relevant to them because the real motivation is to transfer assets to private influence peddlers.
“There is plenty of capacity to fund infrastructure with municipal bonds. From a funding standpoint it’s not clear why we need an infrastructure bank, especially a paygo infrastructure bank.”
Of course, we know the reason. The government is using a perceived crisis to justify moving public money and assets into private hands. To quote Milton Friedman:
“Only a crisis – actual or perceived – produces real change… That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes the politically inevitable.”
Described at greater length in Naomi Kline’s Shock Doctrine, the intent is to create or exploit a crisis, real or imagined, as a way to force a change that would otherwise be unacceptable. While some of these privatization attempts have failed, the overwhelming trend has been in that direction.
When the next financial crisis hits, some form of printing will almost certainly be used to offset the damage, but there will be a massive push for new types of privatization. Just like Friedman said, new types of privatization will include things now thought of as sacred and untouchable, including closing of public schools, police protection and possibly even the shutdown of local governments, replaced with panels of “experts.”
The drive to extract wealth from the public can get pretty creative at times. For example, the Supreme Court recently ruled that works now in the public domain can be recopyrighted and, like any other public asset, can be sold back to corporations. Soon, you can say goodbye to freely available public domain movies or classical music. No more Mystery Science Theater 3000. No more Night of the Living Dead. You want them? Pay up. Of course, industries and publications that rely on public domain works can’t profit if licensing fees need to be paid for each use.
As a side note, privatization often goes hand in hand with its cousin, deregulation. Recently, the cynically named “JOBS Act” about to be signed into law by the President, provides Wall Street firms with numerous ways to commit fraud and avoid accountability. William Black, a regulator during the Savings and Loan scandal of the 1980s and expert on financial fraud notes:
“Everybody that knows about fraud has said that the [JOBS] bill is unbelievable. It is the wishlist of every fraud friendly practice in the world put together in a bill. We have congress deliberately screwing up the congressional rules, preventing hearings, because they know this could never be exposed to real discussion by experts.”
You’ve almost certainly heard of at least some of the recent memes commentators have attributed to these times. ”The Great Recession” and “Age of Austerity” both come to mind, but how about this one: ”The Great Privatization,” a massive new movement to shift even more of America’s collective wealth to private hands. Is it hard to imagine? Certainly not given what we’ve seen so far.