Thursday, March 31, 2011

The GOPCon Perversion of Social Security for US National Socialism

Oh dear.  Another snarky little blog ready to compare Social Security to Nazism?

Maybe we can undertake such a matter a little more academically than what one might encounter otherwise.  After all, very many "water cooler" conversations almost inevitably migrate to conclusions requiring that someone or something be deemed a "Nazi"  or a "Communist." 

National Socialism - The Academic Model

However, also perhaps too frequently, what conversation follows after such a conclusion almost automatically plunges into a murky swamp of misconceptions and illogical sorts of "mixtures" where the point one of our "water cooler combatants" desires is founded essentially on intuitive, background generalities rather than sweet, crisp ideological thinking.

After all, most Americans sporting a high school diploma define a Nazi as someone who invades his neighbors and kills Jews and defines a Communist as a Russian who is a "godless communist" and schemes to expand the Soviet empire.  Stepping aside from whatever broken shard of truth may rest somewhere in these overly casual definitions, we are left with a couple of rather specific economic models.

All the "Jew killing" and "godlessness" relate to the activities of people who, just by the way, happen to have found a home in one of these economic models.  This posting is about the economic models which are left when the historical melodrama has been removed, especially the national socialism model.  Even then, MeanMesa will find itself inescapably discussing the German example of national socialism, not because it is the only one, but because it is the most convenient.

So, let's give it a whirl.

We can begin with an abbreviated definition of the model which is relevant to this argument.

Germany in WWII

In this context, National Socialism, as the name implies, replaces the directing incentive for production found in more transactional systems with an elevated priority for national interests.  In the German model, an inebriating mixture of oligarchic industrialist interests combined with pressing national needs to form -- in the case of Germany's participation in WWII -- a nationally controlled and subsidized industrial base.

Farms are supposed to grow food!(image source)

In no time an unanticipated manufacturing efficiency developed.  German factories were not only employing vast numbers of Germans, but they were also producing war equipment on what we would now call "government contracts" at an astonishing rate.  The contemporary German monetary policy which made this possible, especially after the almost total economic collapse of the German economy a few decades earlier following WWI, rested squarely in the temporary benefits of national socialism.

If "regular socialism" is presumed, roughly, to be the model which values benefits to individuals in  a social  culture, "national socialism" may be, again roughly, regarded as one which values benefits to national objectives, in the case of Germany, the nation's war making capacity.

This MeanMesa post is not about the rather destructive slide of values which occurs when production priorities descend to national interests instead of market appetites.  Instead, we will look at an "accidental" side effect of the process.  That is, we will consider the advantages found in such a system as they develop for the oligarchs "standing in the sidelines."

The Oligarchs - Then and Now

As Germany gradually adopted this approach, certain industrialists were suddenly enjoying a new opportunity to really make some money.  These factory owners and bankers (The grandfather of the now infamous Bush family, for one...) would have made this "German money" in any case, but as things progressed, they found that their industrial and banking profits could be enhanced even more by their active participation in the decision making being done by the ever more powerful Nazi government.

So, although "national socialism" was primarily designed to benefit the national government, it turns out that, with just a little "tweeking" here and there, it could also serve to benefit this clutch of oligarchs who had, by this time, carefully insinuated themselves into the government decision making process. 

The point is that we now see a disturbing similarity to developments in our own country all these years later.  Right away, we see that this more modern version has the obvious catastrophe of contemporary military procurement, but when we look more closely, we see that the cancer has spread to current ambitions of the GOPCon crowd as they serve their oligarch masters with respect to the Social Security system.

Social Security was designed to service a social priority, that is, designed to provide a specific social value as an insurance system for the elderly.  Yet, we see now that the resources of the Social Security system are being targeted for a reassignment.  The dream of the neo-cons is to convert the system to serve as an economic benefit to the banking system, and inevitably, to the oligarchs who both control that system and benefit from it.

This modern version of national socialism does not direct the benefit of this conversion of the system to the nation so much as to the oligarchs.  One might think that this conclusion conveniently removes the process from the definition of classical national socialism, but maybe not.

When we carefully consider the flow of wealth the German industrial and banking oligarchs derived from the national socialist model once business priorities shifted from normal commerce to the service of the state, we can also see the potential flow of wealth which American oligarchs would enjoy if the Social Security system were diverted from its designed priority of social service to a new one which served, primarily, the banker and investor class.

The "prize" in WWII Germany was created by the reckless inflation of the German economy to finance the war effort.  A huge amount of "ready cash" became available as the German printing presses roared into action to pay for the Third Reich.  The modern version of this huge amount of "ready cash" relates to the $2.5 Tn Social Security Trust Fund.  

The national socialism model allowed the German government to detach the common value of its money -- the value traditionally enjoyed by Germans in the previous economy -- from its actual value in favor of government priorities.  The value of a German Mark began to depend on its usefulness to government priorities rather than to its commercial value to a German consumer.

The Modern Form of National Socialism

The recent effort in the US has similar underpinnings.  The intended value of a dollar in the Social Security Trust Fund was originally designed to provide the services of the program, not to provide investment opportunities for the oligarchs of the moment.  If such a change could be effected in the system, the "prize" would fall to these billionaire interests as an unearned influx of "ready cash" which could be exploited and expanded for their personal wealth and the conversion of the previous priority for providing a social service to one of providing for wealth redistribution would be inevitable.

FDR Signing Social Security bill (image source)

The oligarchs have already "tasted" the great rewards made possible by such a diversion of "ready cash."  The autocrat's heavily soiled TARP program moved literally trillion of dollars from the tax payers' General Fund into an "investment subsidy" for the oligarchs in the banking and investment class.  With this sudden influx of investment money, these billionaires, naturally, started to make huge profits almost at once.

The stock market, banking industries and other elite economic groups are showing an unprecedented increase in wealth thanks to the sudden influx of even more capital made possible by TARP.  The autocracy knew that since such folks make money based on the money they have to invest at the moment, the more money they had to invest -- again, coming from the huge TARP bailout -- the more money they would make.

A $2.5 Tn Social Security Trust Fund represents the same kind of opportunity for them.  All that is left to be decided is the means and mechanisms of a process which could successfully divert all that money from its intended use to a new one, from its role as a social "safety net" to a new role as a sudden, unearned influx of new investment money.

But, one might say, national socialism implies an economic model designed to serve the nation.  What has been described here is an economic model designed to serve the oligarchs.  This seeming contradiction is not as much of a problem as it might first appear.

After thoroughly inundating the national psyche with the idea of the synthetic value of "trickle down" economic stimulus models, the economic ruling class now firmly believes that a benefit to them is a benefit to the nation, one so valuable that it should be undertaken regardless of cost.  Swamped in the psychological hubris of the "uber-riche," these economic sociopaths see the very existence of the Social Security Trust as nothing other than a violent affront to their self-considered, divine right to make more and more profit.

And it's not just the money in the Trust they find so appealing, either.  If, through their carefully purchased Senators, they were able to raise the retirement age of Social Security to an even higher level, the resulting flood of workers into the labor market would further reduce the wages they must pay, increasing the profits of their businesses even more.

Finally, we must consider the remarkable success the oligarchs and their media have enjoyed as they "sold" this idea to the disastrously under-informed voter.  A very promising -- for the oligarchs -- anachronism has created a voting block to which these arguments have an unexpected appeal.

That situation comes from the growing numbers of Americans who were able to "out smart" the Social Security systems revenue stream while they were wage earners.  By "hook or by crook" these American workers found a way to not pay the Social Security taxes on years and years of their pay checks.  Now, they see others who did pay enjoying the social benefits of participating in the program in their retirements.

To the oligarchic class this remorse represents a potential advantage which can now be exploited politically during elections.  As these "non-paying" workers see their neighbors enjoying the retirement benefits of a life time of Social Security payments, they become an "army in the night" for manipulation by the billionaires salivating at the prospect of redirecting the Trust Fund monies into their "investment" schemes..

Last Words

MeanMesa thinks that should the oligarchs get this "second huge basket of unearned 'investment' cash," the economic advantages it will provide will permanently move the country's economic system to a new, even more deeply entrenched, wealth inequality.  Such an increased disparity of wealth will inevitably -- under our current system where "wealth = voice" -- result in the final plunge of what had previously been laissez faire capitalism into a dismal oligarchy which will, sooner or later, finally precipitate a violent "revolutionary correction," at least, an economic one.

Capitalizing on the current confusion between the late autocracy's unfunded Medicare program and the well funded Social Security system, the oligarch media has gone to great lengths to imply that the social system is in financial trouble.  The numbers paint quite a different picture, but it is a picture which Americans seldom see.  The economic ruling class will exploit this confusion to the fullest in hopes of realizing their "take over" dream.

We have to face facts.  National socialism re-directs immense amounts of money to purposes for which it was never allocated.  We have to see the implications of the current "targeting" of the Social Security Trust Fund in the same light.

We already have the American equivalent of the Krupp families.  We shouldn't be feeding them extra bones in the fleeting hope that they will, somehow, treat us better.

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