Rollback - Part III
by Noam Chomsky
Z Magazine, April 1995
In announcing the Clinton Doctrine in late 1993, National
Security Adviser Anthony Lake borrowed some standard Cold War
terminology, announcing a transition from containment of the "global
threat to market democracies" to enlargement of "their
reach." The Cold War term for enlargement was rollback, official
policy from 1950. The new doctrine, then, continues the old. Throughout
the Cold War, the domestic populations of the industrial societies,
including the United States, were a prime target for "containment."
The doctrinal framework does correspond to historical reality,
but only under familiar translations. "Democracy" is
to contained, restricted to "top-down forms" that keep
"traditional structures of power" intact at home and
abroad, as the more candid acknowledge. Politics must remain "the
shadow cast on society by big business," to borrow John Dewey's
formulation of Adam Smith's truisms about "the principal
architects of policy." As for "markets," what will
be "enlarged" is the traditional double-edged doctrine:
market discipline for the poor and weak, state protection and
intervention (in the economy, and the world) for the benefit of
those who cast the shadow -- "the masters of mankind,"
in Smith's phrase.
Restating the Doctrine without equivocation, the masters have
long sought to contain popular struggles to expand the range of
meaningful democracy and human rights, but now perceive that they
can do better. They feel, perhaps rightly, that they can dismantle
the social contract that has been in some measure achieved, rolling
back the threat posed by the "great beast" that keeps
trying "to plunder the rich" (Alexander Hamilton and
John Foster Dulles, speaking for a host of others). The architects
of policy can move on to establish a utopia of the masters based
on the values of greed and power, in which privilege is enhanced
by state power and the general population lack rights apart from
what they can salvage on a (highly flexible) labor market. They
are also free to starve or to enter the rapidly expanding workhouse
The Wall Street Journal's review of economic performance for
the last quarter of 1995 is headlined: "Companies' Profits
Surged 61% on Higher Prices, Cost Cuts." After-tax profits
rose 62% from 1993, up from 34% for the third quarter. In a full-page
ad, a leading lender, the CIT Group, announced proudly that "Corporate
America Posted Record Profits In 1994." The headline in Business
Week read: "It Doesn't Get a Lot Better than This."
Its survey estimated profits to be up "an enormous 41% over
," despite a bare 9% increase in sales, a "colossal
success," resulting in large part from a "sharp"
drop in the "share going to labor," though "economists
say labor will benefit -- eventually." The masters aren't
1993 had been a banner year for business with "dazzling"
profits for the Fortune 500 despite stagnant sales growth. 1994
was a great improvement, yielding "surging profits"
that were "overflowing the coffers of Corporate America,"
Business Week exulted even before the grand news about the final
quarter was in. Meanwhile median wages and work conditions continued
their steady decline. The number of children under 6 living in
poverty reached a record high of 6 million, 26 percent of that
age group, an increase of 1 million from 1987 to 1992 and almost
double the figures for 1972 when the rollback crusade was in its
It therefore follows as night follows day that social policies
must be modified to enrich the suffering masses of Corporate America
still further while the rest are taught stern lessons about the
rigors of this "lean and mean" age. And so we see day-by-day
as the story unfolds.
The President's first response was to increase the Pentagon
budget, the leading form of welfare for the rich. Unaware of the
"mandate" it has conferred, the public is strongly opposed.
Military spending is "near the bottom of the public's wish
list," Washington Post polling director Richard Morin observes,
with only 1/6 favoring an increase (in contrast, about 2/3 favored
more spending on education, drug addiction programs, the environment,
and other social spending which is to be sharply cut). In real
dollars, the Pentagon budget is $30 billion a year higher than
under Nixon, at about 85% of the Cold War average. The Cold War
enemy is, of course, now an ally, even in military production:
thus its advanced research programs enabled the U.S. to regain
the world lead in pulsed power and microwave weaponry, the prestigious
military journal Jane's Defence Weekly reported in January. The
figures give some indication of how large "the threat to
market democracy" posed by the Great Satan loomed in the
eyes of planners who sought to "contain" it and "roll
The Republican majority in Congress was not satisfied with
this radical opposition to the public will, particularly the Speaker
of the House, who represents the Lockheed Corporation and other
high tech industries and has had unparalleled success in using
the federal government to transfer public funds to his wealthy
constituents. Under his leadership, the House approved a $3.2
billion "emergency" supplement for the starving Pentagon.
The funds are to be drawn from programs for the vast majority.
In a vain and pallid gesture that highlights what is at issue,
House Democrats proposed in committee to replace a planned $5-$7
billion of cuts in child nutrition, housing, and job training
by a five-year delay in deployment of Lockheed F-22 advanced fighters,
a welfare program now estimated at $72 billion. The suggestion
was summarily rejected, and scarcely reported.
The word to use remains "security," not "subsidy,"
as Air Force Secretary Stuart Symington advised in the early days
of the Cold War, when government was being mobilized as the "savior"
of private power, which could not survive in a competitive economy,
as the business press frankly acknowledged. And once again, current
plans for "defense" are designed so as to foster security
threats. A minor one is the Soviet Union; though now an ally,
it remains a potential threat to U.S. "preponderance,"
the currently fashionable term for global rule. But the primary
threat is "Third World weapons proliferation," Air Force
Director of Science and Technology General Richard Paul informed
Jane's. We must maintain military spending and strengthen the
"defense industrial base" because of "the growing
technological sophistication of Third World conflicts," the
Bush Administration had explained to Congress while watching the
Berlin Wall collapse, taking with it the most efficient pretext
for "subsidy." No one who has kept their eyes on the
"security system" will be surprised to learn that both
threats are to be enhanced.
Some of the funding for the emergency Pentagon supplement
is to be drawn from programs to help dismantle and safeguard the
nuclear arsenals of the former USSR. To protect ourselves from
the resulting threat, we will have to "increase the Defense
Department's budget," Florida Democratic Representative Pete
Peterson commented. Furthermore, "Third World weapons proliferation"
is to be stimulated, with new contributions to its "growing
technological sophistication." The U.S. share in arms sales
to Third World countries has reached almost three-quarters. We
must therefore provide them with even more advanced weaponry,
so that we can tremble in proper fear. Sale of F-16 aircraft with
taxpayer-subsidized loans allows the Air Force to pay Lockheed
to upgrade the aircraft and to develop the F-22 to counter the
threat they pose. The welfare programs extend beyond Gingrich
country, General Paul emphasized, outlining the commitment "to
spin dual-use [Science & Technology] outside the military"
in "the national interest," "enhancing our economic
security." Particularly "enhanced" is the welfare
of corporate America, which is to "transition our work,"
General Paul continued in standard bureaucratese.
Gingrich's favorite cash cow understands the scam perfectly.
Lockheed propaganda warns that it is a "dangerous world"
in which "sophisticated fighter airplanes and air defense
systems are being sold" -- mostly by its "savior."
One of the authors adds: "We've sold the F-16 all over the
world; what if [a friend or ally] turns against us?" To fend
off that threat, we have to sell potential adversaries still more
advanced weapons, and to transfer still more public funds to the
shrinking sectors of the population that bear the burden of "dazzling"
profits. Quite simple, really.
Arms sales to undemocratic countries -- virtually all the
recipients -- are opposed by a mere 96 percent of the population,
so these programs reflect the "popular mandate" even
better than their companions.4
The National Security State is a natural favorite of the advocates
of private tyrannies. The device facilitates the transfer of public
funds to advanced industry and to wealthy sectors generally, with
the public cowering in fear of foreign enemies so that planners
can operate in "technocratic insulation," in World Bank
lingo. Furthermore, the "great beast" has to be dealt
with somehow, and the natural device is to frighten them. With
internal enemies as well; it is only reasonable that the directors
of the Contract should expand further the domestic security system
organized and conducted by the powerful state they wish to nurture,
passing legislation permitting warrantless searches (considered
a "bad idea" by 69% of those who conferred "the
While the important people are receiving the care they deserve
from their nanny state, social programs are being radically cut.
Here the word to use is not "security," but "welfare
dependence." The poor are to be helped to escape this grim
fate, imposed upon them by a failed liberalism. The only problem
with the story is the facts. As discussed in earlier articles,
official "welfare" has sharply declined. The average
monthly benefit level dropped from $714 in 1970 to $510 in 1980
and $394 in 1993 (1995 dollars), Marc Breslow observes. The one
exception is health care for the poor (Medicaid), which has risen
(though more slowly than general health care costs) in large part
as a result of the gross inefficiencies of the privatized system
with its huge administrative and bureaucratic burdens, public
funding of profits, salaries, and advertising, and now micromanagement
of doctors to ensure minimal care and transfer of choice from
doctor and patient to fat cats in insurance company offices.
The correlation between welfare payments and family life is
real, though it is the reverse of what is claimed. As support
for the poor has declined, unwed birthrates, which had risen steadily
from the 1940s through the mid-1970s, markedly increased. "Over
the last three decades, the rate of poverty among children almost
perfectly correlates with the birthrates among teenage mothers
a decade later," Mike Males points out: "That is, child
poverty seems to lead to teenage childbearing, not the other way
around." As discussed in part II of this series, the dramatic
impact of the war against children and families by Reagan-Thatcher
"conservatives" has been well studied, but equally well
Facts are irrelevant when there is serious business at hand:
right now, intensified class war. Among the programs targeted
for elimination or radical reduction are school lunches, job training,
education generally, assistance to homeless and veterans, fuel
and health care for the needy, drug-free schools, conversion of
military industry to human needs -- and generally, anything that
might help the undeserving majority. That's doubtless in response
to the fact that about 80% of the population think "government
has a responsibility to try to do away with poverty," up
from 70% when the "great society" programs were initiated
30 years ago, to enter into sharp decline shortly after.7
Representative Clay Shaw, Chair of the House Ways and Means
Subcommittee on Human Resources, explained that the proposals
to punish millions of poor children are really "tough love,"
a compassionate effort to save them from dependence on the dole.
The programs do not pass without criticism. New York Times reporter
David Rosenbaum observes that "however worthy the goals and
however sensible the principles" that inspire "tough
love," these efforts to raise up the poor and needy face
"seemingly intractable contradictions" -- primarily
impediments of the kind just reviewed, which remain unmentioned.8
Jingoism is also in style. Clinton agrees that the U.S. must
lower its share of UN peacekeeping operations but his right-wing
adversaries want to go much further, shackling or even ending
them. As for the irrelevant public, well over 80% favor UN peacekeeping
operations. Half consistently support U.S. participation, 88%
if there are fair prospects of success; 5-10% consistently oppose
such operations, the remainder varying with circumstances. The
effect of fatalities in Somalia was slight. Asked their general
reaction if dead American soldiers were shown on TV, 57% favored
increasing U.S. forces or striking back. Two-thirds favored contributing
U.S. troops to a UN operation to protect "safe havens"
or to stop atrocities in Bosnia; 80% took the same position with
regard to Rwanda, if the UN concluded that genocide was underway.9
Along with "security" and "welfare dependence,"
the magic words include "devolution" and "states'
rights." Programs that might help people are not only to
be cut, but also handed over to the states in block grants. Under
conditions of relative equality, this could be a move towards
democracy. Under existing circumstances, devolution is intended
as a further blow to the eroding democratic processes. Major corporations,
investment firms, and the like, can constrain or directly control
the acts of national governments and can set one national work
force against another. But the game is much easier when the only
competing player that might remotely be influenced by the "great
beast" is a state government, and even middle-sized enterprise
can join in. The shadow cast by business can thus be far darker,
and private power can move on to greater victories in the name
of freedom; another triviality that appears unworthy of comment.
The Way it Works is described in a lead article in the Boston
Globe business section headed "Line grows longer for state
aid," putting the "business-friendly administration"
of Gov. William Weld "in a bind." Private enterprises
ranging from big-timers like Raytheon, long dependent on the public
dole, to sports teams, banks, financial services and insurers,
and others, are threatening to move elsewhere unless they receive
"big wage and benefit concessions" from unions and millions
of dollars worth of gifts disguised as "breaks on taxes and
utility bills." An accompanying story describes how the truly
powerful operate. It reports Microsoft magnate Bill Gates's boast
that he had delivered an ultimatum to Vice-President Gore warning
that he would move the whole operation elsewhere unless Washington
settled an anti-trust suit in his favor.10
The richest city in the world, with the help of the state
government, hopes to lead the pack. New York Governor Pataki announced
a budget plan that will "reduce the top tax rate 25 percent
and save taxpayers $6.8 billion a year," the New York Times
reported. The first part is true, particularly for the rich; for
families with incomes over $150,000, the tax reduction is seven
times as high as for those with incomes under $25,000. But the
"savings for the taxpayer" are a mirage. One such "saving"
is a cut of $128 million next year in appropriations for the metropolitan
area public transit system, tacked on to a $113 million cut in
city financing. These "savings" will make a 25-cent
to 50-cent increase in the already ridiculously high fares "virtually
inevitable," transit advocates estimate -- "a tax hike
for the more than four million moderate-income and working people"
of the city, they add correctly, and a huge and radically regressive
one. Among other effects, the "savings" remove fare
reductions for schoolchildren, yet another regressive tax.
Further "savings to the taxpayer" include reduction
of support and health care for the blind and disabled, children,
and defenseless people generally; firing workers who merely provide
services to the general public; sharp increases in tuition at
city and state universities; cancellation or delay of desperately
needed infrastructure repair; doubling up of prisoners in maximum
security prisons; and elimination or sharp reduction of the meager
assistance to pregnant women on welfare, home care services for
the elderly and disabled, pensions, cleanup of Love Canal, assistance
for single adults with children "considered employable"
-- perhaps in the satanic mills that are springing up throughout
the city; and on, and on. It will be "a giant leap toward
economic growth," the president of the Business Council of
New York State exulted, perhaps thinking of those great Caribbean
vacations and evenings at luxury restaurants and the theater (deductible
as business expenses) and other opportunities that will be afforded
by the huge redistribution programs towards the needy rich in
a city that has already surpassed Guatemala in the inequality
Mayor Rudolph Giuliani lost no time in showing that he too
knows how to serve the powerful. "Embracing the philosophy
of Gov. George E. Pataki's austere budget for the state,"
the Times reported, the Mayor will "reduce for the first
time public assistance and health care for the city's poorest
residents" and "restructure government in ways that
would affect virtually every New Yorker, although not evenly"
-- a masterpiece of understatement. "In addition to the [general]
cuts in welfare and health care," the Mayor called on workers
to agree to "savings" in "health care, pensions
and work rules." Sanitation services are a prime target.
They don't benefit the folks in the high rises, and the effects
should not be too much of an annoyance as their limousines pass
by decaying trash and rotting people. Also to be cut are assistance
to foster parents and preventive services for families considered
to pose risks of child abuse. That makes good sense as a component
of the war against children and families that has been waged with
unremitting intensity by the "family value" conservatives
in the past 15 years.
In these lean and mean times, it would be unfair to target
only the general population. Hence along with sharp reduction
of programs that might benefit the general population, there will
also be reduction in "property taxes on coops and condos,
as well as reductions in business taxes" -- so everyone shares
in the suffering. Municipal hospitals and health services will
close, and public education will deteriorate still further, all
"to stimulate job growth," the report continues with
a straight face.11
For unexplained reasons, the rising tax burden on poor and
working people through fare increases and other regressive measures,
though plainly reducing their purchases of goods, does not affect
the jobs of those who might otherwise produce them. In contrast,
job growth is stimulated by transfer of wealth to the rich for
purchase of Mercedes limousines and elegant yachts, rich profits
from speculation in the "economic miracle" of the Mexican
economy (secured by the taxpayer, when it predictably goes sour),
shifting of production to semi-slave economies maintained by U.S.-backed
violence abroad, and other such free market miracles. The mysteries
of economic science are profound indeed.
Not all programs are to be axed, however. One public agency
is to receive more money under the Giuliani budget: the police
department, which will gain $100 million. That too makes sense,
as part of the general enhancement of state power and violence.
The rich have to be protected from the effects of the programs
to turn New York into a typical Third World city.
At the federal level, some programs are also safeguarded.
Over three-fourths of federal food spending goes for food stamps,
and that program is slated to keep federal guarantees, for reasons
explained quietly by the Wall St. Journal: the food stamp program
is backed by "big agri-business associations," so there
is no place for "tough love" here. "We want one
program at least to be a safety net for people who are truly needy,"
Rep. Pat Roberts of Kansas explained as the House Agriculture
Committee that he chairs decided to impose federal requirements
for the food stamp program. "That's the best way to achieve
our goals of providing nutrition for the hungry and eliminating
fraud from the program," Roberts continued. "It is a
more pragmatic approach to achieve several of our goals."
Republicans were "uneasy" about block grants that would
"give governors cash rather than give poor people coupons
for food," the Journal, noting that "grocery chains
and the agribusiness lobby" were also "uneasy."
Federal guarantees, in this case, will best preserve "a safety
net for needy people." The reason for the decision, New York
Times reporter Robert Pear added, is that House Republicans "feared
that it would increase fraud and abuse" if governors were
given grants, in this single case. Surely nothing else could have
been on their minds -- for example, the fact that Roberts's congressional
district received more farm subsidies over the last decade than
any other, over $.5 billion a year, with Kansas farmers averaging
$20,000 to $30,000 annually. Those are averages; the "agri-business
associations" mentioned in the small print do not represent
small farmers trying to scrape by. The likely outcome will put
limits on the program so that it cannot meet the needs of the
hungry during periods of economic decline but will offer steady
guarantees to agri-business, and leave discretion in the hands
of states, so that local powers can determine who are the "worthy
poor" -- not including mothers who merely care for children,
refusing to "work."
Much as in totalitarian states, satirists are given greater
latitude to articulate what everyone knows. In the Boston Globe,
the text of a Steve Wasserman cartoon reads: "We planned
to eliminate food stamps, but then we took pity. We couldn't bear
the hungry cries, the outstretched hands of agribusiness lobbyists."12
One must admire the delicate touch of the statist reactionaries
fine-tuning the transfer programs. Unlike food stamps, the Women,
Infants and Children (WIC) program is to be turned over to states
as block grants. One reason is again explained by the Wall Street
Journal. This transfer repeals a "cost-containment competitive
bidding measure" that placed onerous market conditions on
the four pharmaceutical companies that sell infant formula. They
"stand to gain as much as a billion dollars" a year
over and above the successes of their evasions of the federal
law, now being investigated by the Federal Trade Commission. Note
that taxpayers will save money with the FTC investigation terminated.
The new protection for the rich from market discipline should
overcome other defects of the WIC program. A USDA study found
that every dollar spent brought up to $3.90 reduction of Medicaid
costs for newborns and mothers. It also found a 22% drop in neonatal
deaths among WIC participants. The effects of restriction of the
program and transfer of its benefits to pharmaceutical companies
are obvious without comment, among them, the mental and physical
harm to surviving children of low-income pregnant women deprived
of sustenance, which will improve the grim bell curve that condemns
all but the "cognitive elite" to servitude, as yet another
Malnourished neonates and children deprived even of school
lunches have no lobby working for them. Nor do the great majority
of the population. Over 80 percent of the population say that
"working people" have too little influence, but the
shadow cast by business ensures that they can do nothing about
it except watch in dismay and unfocused anger as they sink into
decline. Unlike the peasants and slum-dwellers of Haiti, who were
able to create a civil society rich and vibrant enough to establish
a functioning democracy, people here are lost and hopeless --
a fact that sheds light on the standard propaganda line that we
have to teach democracy to Haitians. But although 80% feel that
working people have too little influence, only 20% feel that way
about labor unions while twice that number feel that unions have
too much influence. These figures reflect yet another remarkable
victory for corporate propaganda.14
The human consequences of the "savings" are immediate.
Take elimination of home heating aid for the poor, which had reached
over 5 million households. 72% have incomes below $8000 and spend
over 18% of that on energy costs (4% for average middle-class
families). Even with federal aid, half the families had used up
the allocation before Christmas in 1993, and by mid-January, twice
as many had died from the cold wave as in the Los Angeles earthquake.
Boston City Hospital researchers found that among children treated
in the emergency room (the "national health service"
for the poor), the percentage suffering malnutrition almost doubled
in the winter. The new measures will not only harm or kill more
children, but are also a useful blow to communities. The oil vendors
working with the program were mostly small businesses, often multilingual
community people. So the threat of democracy is rolled back another
Another target is public broadcasting, financially trivial
but an important part of the campaign to mobilize some public
support by a show of "populism" on the part of those
who are happily grinding the public under foot. The propaganda
campaign to depict the public system as "liberal" and
"elitist" is familiar. It is unclear whether it has
had much effect. A recent poll finds that over 3/4 of the population
want to keep the limited public funding. But the idea that any
element of the information system might remain within a potentially
democratic system has always been galling to the totalitarian
mentality, so despite its marginality, it may disappear.16
Also slated for demolition is the regulatory apparatus, which
only protects health, safety, welfare, and lives -- now and for
future generations. The measures proposed carry more immediate
costs: "at least $250 million annually" to enforce the
complex provisions, the Congressional Budget Office estimates,
largely to pay more bureaucrats. Clinton is joining the parade.
His plans to rescind legislation that prevented banks from relying
on federally-guaranteed funds for speculation were wonderfully
timed. This proposal for "eliminating the legal and regulatory
barriers among financial industries" was announced in a front-page
New York Times story alongside the news that even the strict regulatory
system of quasi-fascist Singapore had collapsed, destroying Britain's
most venerable merchant bank -- a coincidence that is "ironic,"
the lobbyist for smaller banks observed. These measures are also
expected to concentrate extraordinary resources in a small number
of super-powerful banks and investment firms, another contribution
to "free markets." The Barings collapse is just another
in a series of recent disasters, including Kidder Peabody, Orange
County, Procter & Gamble, Metallgeschaft, and Mexican casino
capitalism. The costs will be paid by the usual victims.17
It hasn't been easy for commentators to deal with recent developments.
One problem has been to reconcile the concept of a "popular
mandate" with the unmistakable fact that the public strenuously
opposes it almost every step of the way, and to preserve the doctrine
that Congress, like the White House, is dedicated to serving the
public good. Richard Berke's February 28 New York Times report,
already cited, concedes that the public "doubts key parts
of the G.O.P.'s agenda," giving (very partial) evidence,
but explains that Congress implements the programs that the public
despises "based on their reading of public sentiment."
Congress has failed to notice what the polls have consistently
demonstrated. The doctrinal system permits accusations of imbecility,
but not of rational service to dominant powers. Adam Smith's honesty
would be damned as a "conspiracy theory," were anyone
so bold as to reiterate it.
Some keep trying to conceal the obvious. Thus we find articles
with such headlines as "Poll finds GOP agenda is popular,"
reporting that only 40% of Americans have even heard of the Contract
with America and scarcely a third "approve of Gingrich's
performance." But, the report in the Washington Post continues,
some components of the program are "overwhelmingly popular,"
specifically term limits for Congress, a balanced budget amendment,
and welfare reform. Unmentioned is the fact that term limits were
quickly shelved; advocacy of a balanced budget declines to small
minorities if it entails cuts in social programs, as of course
it does; and while the public does oppose "welfare,"
having been fed wild tales about "welfare queens," it
strongly supports increased help for the poor.
Sometimes the facts even appear in stories framed to confirm
the official line. A lead front-page story in the New York Times
in mid-December informs us that "Americans Like G.O.P. Agenda."
Reading on, we find data, which show quite the opposite: about
2/3 "say the Government has a responsibility to take care
of the poor" while a mere 9% support a decrease in "programs
for poor children," one of the major planks of the "G.O.P.
Agenda." On the balanced budget, which is alleged to have
overwhelming popular backing, the polls showed that the percentages
were 22%, 27%, 30% if cuts are required in spending on education,
Medicare, and Social Security, respectively -- as they would of
course be. In brief, Americans Dislike G.O.P. Agenda." The
real world, however, quickly disappeared. By the time the balanced
budget amendment hit the front pages in late February, the issue
had been reduced by government-media fiat to social security,
with the crucial issue of general social spending and popular
feelings about the matter completely suppressed in favor of meaningless
claims that the public favors the amendment (if nothing is touched).
The Times correspondent responsible for analysis of the issue,
David Rosenbaum, rails about the "nonsense" produced
by the politicians who are avoiding "substance," and
proceeds to avoid the substance entirely, allowing himself only
a mention of military spending and social security. Massachusetts
Democrat John Kerry explains how hard it was for him to vote against
the amendment "when 80% of the population are saying `Do
something'": namely, don't pass an amendment that will require
cuts in social spending. Without any counterforce to the manufacture
of consent, however, image will become reality, and the Republicans
should to be able to use the overwhelming public opposition to
their actual stand on this issue as a powerful propaganda weapon.
Point-by-point, large majorities oppose specific programs
that are being implemented, with rare (and interesting) exceptions.
One can only speculate as to how people would react were they
to read small items in the Wall St. Journal spelling out the consequences
of the GOP "vow to ease the burden of estate and gift taxes,
which they say are especially onerous for small businesses and
family farms" -- and which the top tax official of the Treasury
Department calculates will cut over $20 billion in tax receipts
in ten years, benefiting about half of 1% of estates -- the richest.18
The problems of reconciling fact with doctrine arise in the
international arena as well. It was well-nigh impossible to conceal
the fact that the highly-touted Mexican "economic miracle"
on which the NAFTA propaganda campaign was founded was utter fraud,
as was well-known to anyone with even a casual interest in the
topic. Recall that this was the "prize example" of the
miracle of the market according to the World Bank and IMF, the
economics profession, the elite media, and other experts. Also
difficult to handle is the fact that the U.S. taxpayer is assigned
the responsibility of paying off speculators making a mint on
the highly risky fraud; they are not expected to pay the costs
under "free enterprise" any more than their S&L
colleagues. To steer through this maze takes some ingenuity. Thus
under the headline "Socializing Risk to Foster Free Markets,"
New York Times thinker Paul Lewis recognizes that the circumstances
might lead some "to be cynical about a mechanism that would
effectively provide insurance" for the rich in case things
go wrong, but a more serious look shows that if Mexico had defaulted,
the crisis "might have undermined the free-market-based development
model that has become this decade's economic signature tune"
-- for the commissar class, at least. In fact, both the Mexican
"miracle" for speculators, investors, and a few billionaires
milking public resources, and the way the risks were "socialized,"
are typical examples of "really existing free markets."19
1 Marc Breslow, Dollars & Sense, March/April; Richard
Berke, NYT, Feb. 28, 1995.
2 Fred Bleakley, WSJ, Feb. 21; CIT Group, Feb. 28; BW, Feb.
27, Jan. 30; AP, BG, Denver Post, Jan. 30, 1995. See the two preceding
articles in this series for references not given here.
3 Richard Morin, WP Weekly, Jan. 9; Breslow, Burke, op. cit.;
Lawrence Korb, NYT magazine, Feb. 26; Jane's Defence Weekly, 28
4 Eric Schmitt, NYT, Feb. 23; Reuters, BG, March 3; Eyal Press,
CSM, Feb. 23; William Hartung, Nation, Jan. 30, 1995.
5 Berke, op. cit.
6 Marc Breslow, D&S, March/April 1995. Mike Males, In
These Times, Jan. 9, 1995.
7 Doug Henwood, Left Business Observer, Dec. 22, 1994.
8 Robert Pear, Rosenbaum, NYT, Feb. 10, 1995.
9 Steven Kull, Bull. of Atomic Scientists, March/April 1995.
10 Charles Stein, David Warsh, BG, Feb. 19, 1995.
11 Kevin Sack, NYT, Jan. 31; James Dao, NYT, Feb. 2; Steven
Lee Myers, et al., NYT, Feb. 15, 1995. Tax figures, NYT, March
12 Robert Pear, NYT, Feb. 18, 25; Hilary Stout, WSJ, Jan.
9, Feb. 27; WP, Feb. 25; Keith Schneider, NYT, Feb. 6; BG, Feb.
13 Hilary Stout, WSJ, Feb. 28; Dr. Berry Brazelton, BG, March
14 Deer, Margolis, Mitchell, Burns & Associates, Being
Heard: Strategic Communications Report and Recommendation prepared
for AFL-CIO, March 21, 1994.
15 Robert Coard, president of the anti-poverty agency Action
for Boston Community Development, BG, Feb. 28, 1995.
16 Ed Siegel, BG, Feb. 12, 1995. On the private takeover of
these crucial public resources, see Robert McChesney, Telecommunications,
Mass Media & Democracy (Oxford, 1993).
17 Timothy Noah, WSJ, March 1; Keith Bradsher, Richard Stevenson,
NYT, Feb. 27, 28; Jeffrey Taylor, WSJ, Feb. 28; Financial Times,
Feb. 27, 1995.
18 Berke, op. cit.; WP-BG, Jan. 6, 1995. Maureen Dowd, NYT,
Dec. 15, 1994. David Rosenbaum, NYT, March 2; Peter Gosselin,
BG, March 3; WSJ, Jan. 11, 1995.
19 "Mexico, milagro economico que `est fallando': Noam
Chomsky," La Jornada, Nov. 7, 1994. Lewis, NYT, Feb. 12,
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