What I Learned from “Requiem for the American Dream” featuring Noam Chomsky

A few months ago, I watched and took notes on this documentary from Netflix. It features Noam Chomsky discussing his “10 Principles of Concentration of Wealth and Power.” These ideas are centered around the relationship between money and power in American politics. Chomsky’s thesis is that greater wealth leads to greater power, because elections are very expensive and American political powers need to appease their funders. In turn, greater power leads to greater wealth, because lawmakers create legislation that concentrates wealth for those who already have it. Legislative tools for this sort of behavior include tax policy, deregulation, and corporate governance rules.

In his “10 Rules” Chomsky refers often to civil participation and recounts the 1960s as the heyday of popular activism. People organized themselves and protested for the rights of women and minorities, and environmental protection. In response, the “masters of mankind,” (ie, the business and legislative sectors) worked to “financialize the economy.” This was accomplished through deregulation of the banks and the offshoring of production. During the 1950s to 1970s, there were no financial crashes, perhaps because regulatory systems placed checks on the financial sector and commercial banks were separated from investment banks. Also during the 1950s, Chomsky points out that the US was “the great manufacturing center of the world.” Indeed, manufacturing made up 28% of our GDP, while finance made up only 11%. In 2010, manufacturing accounted for 11% of our GDP, while finance made up 21%.

The reason that manufacturing accounts for so much less of our economy is free trade. American workers suddenly had to compete with lesser paid factory workers in the developing world. Chomsky paints this as a bad thing, although it seems to me it an inevitable outcome of globalization. It is easy to see, however, how unfair it is that low-paid workers are faced to compete as a result of free trade, while highly paid workers in the financial sectors remain protected from international competition for their jobs. Chomsky also points out that this job insecurity resulting from free trade makes it more difficult for workers to unionize or bargain for better conditions/higher wages. While I don’t think global competition for manufacturing is wrong, I see what Chomsky is saying about how harmful it is for American workers and how convenient it is for the “masters of mankind.”

The documentary has a section on taxes, in which Chomsky explains that taxes on wages and consumption has mostly stayed the same since the 1950s, while taxes on dividends and capital gains (which mostly go to the rich) have steadily decreased. Since the 50s, the marginal tax rate for the highest earners has decreased from about 90% to about 40%. Capital gains taxes alone have decreased from about 35% in 1970 to 18% in 2010.

Principle #6 really highlights the hypocrisy of neoliberalism in America. For the majority, market principles were encouraged to prevail. The government should help as little as possible, because the government is the problem, not the solution. However, in the 1970s, lobbying in Washington increased and deregulation of the banks began. Reagan furthered the policies of deregulation until he was forced to conduct the biggest bank bailout in history. Reagan left office with a major financial crisis that the next government had to bail out again. In 1999, commercial banks were separated from investment banks. The Bush and Obama administrations both had to conduct bailouts of their own, and the next financial crisis is looming, according to Chomsky. The point he is making is that a truly free market wouldn’t let the government bailout the banks when they fail – they would just fail and make room for new actors. The deregulation and subsequent series of bailouts highlights Chomsky’s argument that “there’s one set of rules for the rich, and an opposite set of rules for the poor.”

Principle #7 talks about the problems with our electoral system from a historical lens. The 1976 Supreme Court case of Buckly v Valeo determined that money is a form of speech. About a century before that, corporations were afforded personal rights. So in the 2010 Citizens United Supreme Court case, corporations’ rights to spend as much money as they want on elections was upheld. This is obviously really harmful for elections, and is the subject of Lawrence Lessig’s Republic, Lost, which I am planning to read soon.

Principle #9 has a similar message to Fight Club, which is that consumerism is harmfully distracting us from the important issues in our society. Chomsky notes the power of public relations and advertising firms to distract us with exciting consumer products that are just barely within our financial reach. These products, mixed with entertainment from television and other technologies, make us feel fulfilled and more likely to ignore more significant matters. Even elections are run in this way. We are encouraged to follow a candidate for their character or their ability to inspire us, but we don’t often bother ourselves with the nitty-gritty details of their platform. In fact, the general population’s will has very little to do with what actually happens in our legislating process. We are completely disconnected from the laws that are made. We have no idea which laws are passing on a daily basis, and the majority of Americans would likely disagree with a great deal of them.

In turn, this disconnectedness leads to a distrust of our government. Conservatives take advantage of this distrust by espousing “small government” because “government creates more problems than solution.” The great thing about America, however, is that we are supposed to get together and decide on which rules we want to follow. Taxes and elections are our chance to support those rules. Unfortunately, we have grown to resent taxes, and to some extent even government, because we don’t know what’s happening to our taxes and we know we probably wouldn’t like it if we did know.

The answer isn’t smaller government, it’s just better government. This documentary offers a few solutions, like political activism of the masses the way they used to do it in the 60s. Another solution is reforming our electoral process. Yet another is staying informed about legislation that is being passed and the lawmakers passing it. We might not be taking full advantage of this “experiment in self-government” that Alexander Hamilton and Barack Obama talk about, but we do have the means to improve it. We’ve improved it so many times in so many ways previously, so we only need to become informed enough and organized enough and inspired enough to demand change where it is needed.


Haiti’s History: An Explainer

By Evan Pye

This week I began to prepare for a trip I am planning to Haiti at the end of June by studying the country’s history. I have been interested in Haiti for a long time, having read Mountains Beyond Mountains by Tracy Kidder and Haiti: After the Earthquake by Paul Farmer. Most people probably associate Haiti with a high level of poverty and the earthquake that caused so much destruction in 2010. Yet, its history has been extremely rich and intriguing since before it even became a country in 1804. It’s a story full of violence, accomplishment, and misfortune; and it is very much in the middle of its own history today. My sources of information this week were Haiti: After the Earthquake, a BBC timeline, and a long article written by Paul Farmer in 2004.

To start with the present day, Haiti is in the midst of an election cycle which will have taken over a year to complete. President Michel Martelly completed his term in February 2016, but the first round of presidential elections in the previous October had been marred by fraud and corruption. He therefore was unable to welcome the new president and Haiti has appointed an interim President until they are able to re-do the contested elections, which are now scheduled for October 2016.

Haiti’s encounters with Europe began as early as 1492, when Christopher Columbus landed on the island of Hispaniola during his first expedition to the Americas. The island was inhabited by a native people known as the Taino. The first European settlement in the Americas was the city of Santo Domingo in what is now Dominican Republic, a city which I have visited without realizing its historical significance. After only 100 years, all of the Taino people were wiped out by disease or violence, both on account of the European settlers. Spain controlled all of Hispaniola (little Spain), but ceded the western third of the island to France in 1697. France called this colony Saint Domingue, which would later come to be known as Haiti. France wasted no time bringing over slaves from Africa and had transported 30,000 of them via the Columbian Exchange by 1540. As a result, Haiti became an extremely brutal, efficient, and productive colony for France. It provided ⅓ of the tropical products to Europe and was the world’s leading exporter of coffee and sugar, making it more valuable to France than all of its other colonies combined.

In 1791, a freed slave named Touissant L’Ouverture led a rebellion that conquered the country that was 85% slaves by the point and declared himself ruler over all of Hispaniola. In response, Napoleon sent his brother-in-law Charles LeClerc with an armada of 40,000 troops to quell the uprising. L’Ouverture had already been captured and taken to France, where he died in prison. But Jean-Jacques Dessalines replaced him as leader of the rebellion, defeated Napoleon’s army, and declared Haiti an independent nation on January 1st, 1804.

Although Haiti had succeeded in freeing itself from France, the country was surrounded by hostile Caribbean colonies of European superpowers and America, which was afraid of the influence the slave revolt would have on the South. America wouldn’t recognize Haiti’s sovereignty until the 1860s. In 1825, France demanded reparations from Haiti for its lost land and property (meaning the slaves) of 150 million Francs. With its Navy surrounding Haiti’s water to threaten recapture, Haiti had to comply and begin paying the debt, which they would continue to pay until the 1950s. The total in today’s dollars would become $21 billion, and severely limit their their economic growth for more than a century.

In 1915, the United States invaded Haiti and occupied the country for 19 years, after disbanding the Haitian military and seizing control of the treasury. America’s reasoning for these actions were fears over the conflict between Haitian blacks in the North and mulattoes in the South. The US removed their troops from Haiti in 1934, but maintained fiscal control until 1947. It wasn’t long before more poor leadership would seize power in the form of a voodoo physician named Francois Duvalier, known as “Papa Doc”, in 1957. Duvalier was a corrupt and oppressive ruler. He was succeeded after his death in 1971 by his 19-year-old son, known as “Baby Doc.” Haiti finally kicked the Duvaliers out of power in 1986, and immediately drafted a new Constitution with changes such as making Creole the country’s official language.

After several failed and corrupt elections, Jean-Bertrand Aristide won the country’s first free and peaceful elections in 1990. He was ousted in a coup just one year later, but he would return in 2000 and be elected as president once more. He took over for Rene Preval, who served peacefully between 1995-2000. Aristide was a very pro-poor, socialist leader who President and Bush did not approve of. Bush decreased development aid to Haiti’s government and got the rest of the world to do the same. Haiti’s budget shrunk, leaving their education, health, and security systems to suffer. There was an increase in gangs and crimes, and Aristide was exiled in 2004 with the help of the Americans and the French. Aristide claims he was kidnapped by these foreign powers, who airlifted him to the former French colony, the Central African Republic. The rest of the 2000s were marked by gang violence, several contested elections, and deadly natural disasters. Rene Preval became president again in 2006, and was replaced by Michel Martelly in 2011. In January of 2010, the 7.0-magnitude earthquake killed nearly 300,000 people and led to an international pledge of $5.3 billion in aid money, most of which has not arrived or not been well-spent.