The Crash of 2016

by Thom Hartmann

  The objective was simple: the revival of the Royalist-controlled so-called “free market” system.

  Or, as Powell put it, using Royalist rhetoric, “[T]he ultimate issue… [is the] survival of what we call the free enterprise system, and all that this means for the strength and prosperity of America and the freedom of our people.”

  On Campus

  The first area of attack Powell encouraged the Chamber to focus on was the education system. “[A] priority task of business—and organizations such as the Chamber—is to address the campus origin of this hostility [to big business],” Powell wrote.36

  What worried Powell was the new generation of young Americans growing up to resent corporate culture. He believed colleges were filled with “Marxist professors,” and that the pro-business agenda of Harding, Coolidge, and Hoover had fallen into disrepute since the Great Depression. He knew that winning this war of economic ideology in America required spoon-feeding the next generation of leaders the doctrines of a free-market theology, from high school all the way through graduate and business school.

  At the time, college campuses were rallying points for the progressive activism sweeping the nation as young people demonstrated against poverty, the Vietnam War, and in support of civil rights.

  So Powell put forward a laundry list of ways the Chamber could retake the higher-education system. First, create an army of corporate-friendly think tanks that could influence education. “The Chamber should consider establishing a staff of highly qualified scholars in the social sciences who do believe in the system,” he wrote.37

  Then, go after the textbooks. “The staff of scholars,” Powell wrote, “should evaluate social science textbooks, especially in economics, political science and sociology… This would include assurance of fair and factual treatment of our system of government and our enterprise system, its accomplishments, its basic relationship to individual rights and freedoms, and comparisons with the systems of socialism, fascism and communism.”38

  Powell argued that the civil rights movement and the labor movement were already in the process of rewriting textbooks. “We have seen the civil rights movement insist on re-writing many of the textbooks in our universities and schools. The labor unions likewise insist that textbooks be fair to the viewpoints of organized labor.”39 Powell was concerned the Chamber of Commerce was not doing enough to stop this growing progressive influence and replace it with a pro-plutocratic perspective.

  “Perhaps the most fundamental problem is the imbalance of many faculties,” Powell then pointed out. “Correcting this is indeed a long-range and difficult project. Yet, it should be undertaken as a part of an overall program. This would mean the urging of the need for faculty balance upon university administrators and boards of trustees.”40 As in, the Chamber needs to infiltrate university boards in charge of hiring faculty to make sure only corporate-friendly professors are hired.

  But Powell’s recommendations weren’t exclusive to college campuses; he targeted high schools as well. “While the first priority should be at the college level, the trends mentioned above are increasingly evidenced in the high schools. Action programs, tailored to the high schools and similar to those mentioned, should be considered,” he urged.41

  Next, Powell turned the corporate dogs on the media. As Powell instructed, “Reaching the campus and the secondary schools is vital for the long-term. Reaching the public generally may be more important for the shorter term.”

  Powell added, “It will… be essential to have staff personnel who are thoroughly familiar with the media, and how most effectively to communicate with the public.”

  He then went on to say that same system used for the monitoring of college textbooks should be applied to television and radio networks. “This applies not merely to so-called educational programs… but to the daily ‘news analysis’ which so often includes the most insidious type of criticism of the enterprise system.”

  Powell didn’t know it yet, but somebody in the Nixon administration was already on the same page as him when it came to injecting Royalist ideology into the media.

  The GOP TV Memo and Roger Ailes

  Today, Roger Ailes is the chairman of Fox News (he literally goes by the name of “The Chairman”). He, alongside his boss Rupert Murdoch, is one of the most influential newsmen in America—even though what he pushes can hardly be considered “news.” And like any good foot soldier of the Economic Royalists, he runs an extremely lucrative enterprise.

  But the profitability of Fox News pales in comparison to its influence on the political landscape in America—and we can thank Roger Ailes for that. In fact, Roger Ailes has been the man behind the curtain at virtually every watershed moment in the Royalist resurgence in America.

  Rolling Stone writer Tim Dickinson notes, “As a political consultant, Ailes repackaged Richard Nixon for television in 1968, papered over Ronald Reagan’s budding Alzheimer’s in 1984, shamelessly stoked racial fears to elect George H. W. Bush in 1988, and waged a secret campaign on behalf of Big Tobacco to derail health care reform in 1993.”42

  While working in the Nixon White House in 1970, Roger Ailes enthusiastically supported an idea known as “GOP TV.”

  This plan for the Republican/Royalist takeover of television was largely unknown until recently, when investigative reporter John Cook uncovered a cache of documents from the Richard Nixon Presidential Library. One of those documents, a memo titled “A Plan for Putting the GOP on TV News” outlines in great detail how the Nixon administration could subvert television news and get their Republican-friendly message out across America. It’s unclear who originally wrote the document, but Roger Ailes’s personal handwriting is all over the margins with his input on how to get “GOP TV” up and running.

  The memo begins by noting a substantial change in where Americans are getting their news. “Television news is watched more often… than people read newspapers, than people listen to radio, than people read or gather any other form of communication,” reads the memo.43

  On the margins, Ailes hammers home the point, writing, “44% say TV is more believable than any other medium.”

  What comes next in the memo is a purpose statement, reading, “Purpose—To provide pro-Administration videotape, hard new actualities to the major cities of the United States,” followed by an actual business proposal, complete with estimated costs of production equipment, news crews, and a fancy “customized” editing and delivery truck.

  Under a section entitled “The Plan—TV News Operation,” the memo details exactly how GOP TV would work. It goes something like this: A Republican politician in Washington, DC, would record a message for their constituents—dishing out their talking points on whatever hot-button issue Congress is focusing on that week.

  Next, that message would be edited down to fit into the “crammed” television news environment and duplicated. Here’s where the GOP TV truck was necessary. In order to save time, all the video would be edited down in the truck after the shoot as the truck was driving to Washington National Airport to immediately freight the TV reels out to local news affiliates around the country to air that night. The memo estimated the entire process could be done in “four to eight hours.”

  This was before satellite TV distribution existed, so the plan envisioned in the GOP TV memo was essentially the only way to execute rapid-response Republican messaging on a national scale.

  All in all, “GOP TV” came with the fairly hefty price tag of $375,000 for all the equipment plus another $167,000 for a year’s worth of operating costs. Ailes surmised in his notes on the memo that the White House or the Republican National Committee could foot the costs.

  At the end of the memo, Ailes makes a pitch for his production company in New York to run GOP TV. He writes, “We would as a production company like to bid on packaging the entire project. I know what has to be done… If you are interested I’ll have my N.Y office put together a) 90 day pilot costs b) cost to continue on annual basis.” Ail
es signs off on the memo with, “Best Regards, Roger.”

  This memo—the blueprint for instilling Royalist ideology into our nation’s news media—was discovered toward the end of 2010, just as Fox News was enjoying unprecedented success and influence in steering the national political debate toward Republican aims, giving that party an enormous victory in the 2010 midterm elections. The memo garnered little news attention around the nation.

  But the meteoric rise of Fox News and the realization of Roger Ailes’s vision of GOP TV cannot be attributed to Richard Nixon’s White House, because Nixon’s people ultimately rejected the idea—citing concerns that it wasn’t economically “feasible.”

  But thanks in part to the Powell Memo, a generation later there’d be a lot of financial backing for Royalist media, just as Ailes envisioned it.

  The Courts and the Capitol

  Subverting the national education system and media were necessary for the long-term seduction of the American people by the Economic Royalists. But for immediate change, Powell saw an opportunity in the courts and on Capitol Hill.

  “The educational programs suggested above would be designed to enlighten public thinking,” Powell wrote.

  “But,” he added, “one should not postpone more direct political action, while awaiting the gradual change in public opinion to be effected through education and information.”

  Then Powell bluntly laid it out: “Business must learn the lesson, long ago learned by labor and other self-interest groups. This is the lesson that political power is necessary; that such power must be cultivated; and that when necessary, it must be used aggressively and with determination—without embarrassment and without the reluctance which has been so characteristic of American business.”

  He concluded, “As unwelcome as it may be to the Chamber, it should consider assuming a broader and more vigorous role in the political arena.”

  Whether it was exclusively a result of Powell’s instructions, or a consequence of the Great Forgetting, or both, corporate lobbying in Washington exploded just after the Powell Memo was sent.

  In 1971, only 175 companies had registered lobbyists. By 1982, there were nearly 2,500. Royalists were dumping huge amounts of money lobbying for favorable legislation. At the same time, they were seeding brand-new right-wing think tanks devoted to espousing the same free-market, Andrew Mellon, Warren Harding ideologies that led to the last Great Crash: massive tax cuts, deregulation, and privatization.

  The American Legislative Exchange Council was founded in 1973. So, too, was the Heritage Foundation. And in 1977, the CATO Institute was founded, first as the Charles Koch Foundation, and then renamed a few years later as CATO. These Royalist think tanks were (and are) backed by millions of dollars from modern corporate Economic Royalists.

  But to Powell, a lawyer, nothing was more important than targeting the courts.

  He writes, “Under our constitutional system, especially with an activist-minded Supreme Court, the judiciary may be the most important instrument for social, economic and political change.”

  He notes, “This is a vast area of opportunity for the Chamber, if it is willing to undertake the role of spokesman for American business and if, in turn, business is willing to provide the funds.”

  Laying out specifics, Powell adds, “The Chamber would need a highly competent staff of lawyers. In special situations it should be authorized to engage, to appear as counsel amicus in the Supreme Court, lawyers of national standing and reputation. The greatest care should be exercised in selecting the cases in which to participate, or the suits to institute. But the opportunity merits the necessary effort.”

  In the 1970s, with the Royalists’ Chamber of Commerce now focused on the courts, employing high-priced, savvy lawyers, and flooding the Supreme Court chamber with amicus briefs, a string of explosive decisions throughout the decade would give the Royalists what they needed to eventually overthrow FDR’s New Deal Revolution that was culminating in the 1960s.

  In 1976, in Buckley v. Valeo, the Supreme Court ruled that political money is speech, implying that those who have more money have more free speech in our political system. That same year, in United States v. Martin Linen Supply Co., corporations are given Fifth Amendment protections against double jeopardy. And in Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, the Supreme Court ruled that advertising is a protected form of free speech.

  A year later, in 1977, in First National Bank of Boston v. Bellotti, the Supreme Court overturned state restrictions on corporate political spending, saying such restrictions violate the First Amendment.

  In their dissents in the case, Justices White, Brennan, and Marshall argue, “The special status of corporations has placed them in a position to control vast amounts of economic power which may, if not regulated, dominate not only our economy but the very heart of our democracy, the electoral process.”

  Then came the Federalist Society, founded in 1982 with millions of dollars in funding by the Royalist-allied Bradley Foundation, which built a nationwide network of jurists, attorneys, legal scholars, and politicians to indoctrinate a new generation’s legal system with Royalist interpretations: Corporate personhood is real, money is speech, democracy is not sacred, and organized money should always have privilege over organized people.

  A new wave was rising, and sweeping across the political and economic landscape in America. Unlike in the 1960s, the Economic Royalists were riding this one.

  Chapter 3

  The Crisis Capitalists

  Instead of citizens, it produces consumers. Instead of communities, it produces shopping malls. The net result is an atomized society of disengaged individuals who feel demoralized and socially powerless. In sum, neoliberalism is the immediate and foremost enemy of genuine participatory democracy, not just in the United States but across the planet, and will be for the foreseeable future.

  —Professor Robert W. McChesney, 1999

  Just as Lewis Powell’s memo was being circulated in corporate boardrooms across America, a social democracy under pressure in Latin America fell. And the Economic Royalists saw an opportunity to remake the world into a neofeudal corporatocracy.

  After a military coup in September 1973, the democratically elected socialist president of Chile, Salvador Allende, wound up with a bullet in his head. His country was taken over by General Augusto Pinochet, kicking off a more-than-a-decade-long rule of terror that led to the death and detention of tens of thousands of people.

  General Pinochet was adept at running a military state and ruthlessly squashing dissension. But he knew nothing about economics. And to the Economic Royalists, who were just coming out of the shadows in America, Chile was a blank slate—the perfect opportunity to reintroduce the world to Royalist economics.

  Killing Keynes

  While Adam Smith was the guy who put economics on the map in the eighteenth century, John Maynard Keynes made it useful for governments.

  Keynes saw the importance of a market-based economy, where private citizens were free to buy and sell as they please. He saw that as the best way to amass wealth and improve the lives of everyone in a society. But Keynes knew there was a danger in letting that free market exist completely unchecked, as the Royalists had urged, and argued that unrestrained capitalism will lead to perpetual boom-and-bust cycles—people making huge amounts of money… and then jumping off buildings when they lose it all.

  To stabilize the system, Keynes argued that the government should step in. With a number of tools at its disposal, such as the ability to manipulate the money supply and put in place regulations, as well as to spend huge amounts of money, the government can mediate the mood swings of the economy. There would still be recessions, but under the new Keynesian mixed economy, those recessions would be short-lived, and over the long haul the society would experience sustained growth.

  A core element of Keynes’s theory was that an economy churned because of three basic actions: consumer spending, business spendi
ng, and government spending. When a recession crept in, and businesses got wiped out and consumers were laid off and unable to spend money, then it was up to that critical third piece of the puzzle—government spending—to kick in and keep the economy afloat.

  When Franklin Roosevelt was elected in 1932, he looked to Keynes to help get the United States out of the Great Depression. He infused into the economy massive amounts of money in an attempt to get consumers spending again and to give businesses a reason to expand and hire more workers. And it worked.

  Sure enough, after the Great Depression, our nation for the first time saw sustained financial stability and the rise of a remarkable American middle class. Because more people had more money in their pockets, they spent more as consumers, and industries all around the nation expanded and further employed more people.

  Recessions were short-lived, and economic growth was sustained. Things were working the way they were supposed to. This was the birth of American Social Democracy—or New Deal Economics—a capitalist system that still bred winners and losers but ensured that losers wouldn’t be condemned to death and that winners wouldn’t have the power to bring down the entire system.

  In fact, the entire world adopted a sort of Keynesian economic philosophy, from market economies like in America, where a government simply acted like a referee intervening whenever things got a little too hot or too cold, to economies such as those of the Democratic Socialist states of northern Europe, where the government was much more involved in virtually every aspect of the economy.

  But not everyone bought into what Keynes was selling—most notably, a colleague of Keynes’s at King’s College, Cambridge, Friedrich Hayek, who went in the opposite direction.