Some of you may already be familiar with Zeitgeist, a controversial documentary film trilogy that challenges everything you think you know about the world. If you aren’t, do yourself a favor and get acquainted.
The first movie release, Zeitgeist, analyzes the social constructs that keep humanity’s consciousness stunted; Zeitgeist: Addendum dissects the unsustainability of the current economic system; The epilogue, Zeitgeist: Moving Forward, outlines the notion of structural violence, mechanization and the blueprint for a new system – one that can exist harmoniously with nature.
The viral film series has since spawned a global collective called The Zeitgeist Movement or TZM, an international initiative of activism and awareness pushing the notion that the current social and economic structure is inherently flawed, and must be transformed in order to ensure a sustainable future for all.
The Zeitgeist trilogy, as well as its follow-up Culture in Decline series, have challenged many of my preconceived paradigms as well as greatly inspired my activism, so it was awesome to sit down with Peter Joseph, founder of The Zeitgeist Movement Global, for an in-depth interview. Whether or not you agree with his philosophy, it’s undeniably thought-provoking and deserves to be heard.
Peter Joseph Breaks the Set on The Zeitgeist Movement
MEDIA ROOTS — Modern Money and Public Purpose is the 2012-2013 Series on Contemporary Issues in Law and Political Economics at Columbia Law School. The video below displays some hard-hitting, yet, little-known truths about our economy. We can broadcast the truth about money and the people’s democratic sovereignty to control it, especially given the false economic crises facing Americans–where unnecessary economic pain and austerity is being inflicted onto the people.
The speakers in the fifth installment in the series, Dr. Woody Holton (Univ. of S. Carolina), Dr. Farley Grubb (Univ. of Delaware, Economics Department), and Dr. Christine Desan (Harvard Law School) is moderated by Dr. Gillian Metzger (Columbia Law School). A notable aspect of this panel is the description of the origin of money, which traces its value in our society to today’s modern money systems. These inquiries lay bare the reality of money sovereignty for public purpose, denied by those who truly wield power in the USA, namely those who control the power to create money. As Dr. Holton noted in quoting the private banker Gouverneur Morris during the 1787 Constitutional Convention: “The monied interest will oppose the plan of Government, if paper emissions be not prohibited.”
NEW ECONOMIC PERSPECTIVES—The latest installment of Modern Money and Public Purpose is now online. This seminar explores the relationship between money and the legal formation of the modern liberal capitalist state, with a particular emphasis on the pre-Revolutionary and early United States. In contrast to conventional economic narratives that cast money as lubrication for existing forms of exchange, this event highlights the legal and political origins of our modern monetary system, and traces the influence of those forces on the shape of the modern economy.
“The number one reason the people who wrote our Constitution were there—in Philadelphia, in that summer of 1787—was to stop the states from printing paper money. That’s the number one reason they were there,” said Dr. Holton.
Wow. The monied interests would straight shut down Government and Democracy, altogether, if the people awaken to the power of controlling the money supply for the public purpose. Although the speakers presented important work and were descriptive of historical truths, they seemed less, or un-, willing to explicitly connect those important truths to today’s real conditions of unnecessary and avoidable widening inequality and economic misery for a growing majority, as others do, such as Dr. Michael Hudson:
“But if governments are not allowed to create their money, then all of the credit the economy needs is created by the commercial banks. And when the commercial bank credit creation leads to debt deflation and the government cannot finance the deficit to pay the interest then the commercial banks say: Alright, sell off and privatise your infrastructure. This is what we’re seeing in Greece today, in Ireland. You’ve seen it in Iceland. What you are seeing is a financial grab of infrastructure that is taking place by the ability of commercial bankers to prevent the central bank from creating credit.”
MEDIA ROOTS — Obama’s attacks on the social safety net continue, fueled by the claim the USA is running out of dollars. During the recent Steinhardt Lecture at Lewis & Clark College in Oregon, UMKC Professor L. Randall Wray debunked various economic myths marketed in today’s headlines, which are enforced in universities and echoed by the Obama Administration. These same myths provide pretexts for “fiscal austerity” and “sequestrations,” against the backdrop of giveaways for the ruling-class.
Yet, we come to find, government spending during a recession doesn’t hurt the economy and the US doesn’t ‘borrow dollars from China.’ In the midst of the currently raging debate on “sequestration,” Dr. Wray presents very important economic perspectives the nation needs to understand in order to read between the lines of Washington, D.C. doublespeak.
NEW ECONOMIC PERSPECTIVES — L. Randall Wray recently presented at the Steinhardt Lecture at Lewis & Clark College in Oregon. The title of his presentation was: “Fiscal Cliffs, Debt Limits, and Unsustainable Deficits: Can the US Really Run Out of Dollars?”
Dr. Wray’s Lecture’s accompanying slideshow
2013 Steinhardt Lecture, Lewis & Clark College, Oregon:
Eric Tymoigne: “Alright. Good evening, everyone. My name is Eric Tymoigne. I am an Assistant Professor at the Department of Economics. And, on behalf of the Department, I am pleased to welcome you to the Steinhardt Lecture. It is the 42nd Steinhardt Lecture; and it is named in honour of Herman Steinhardt, the first Chair of the Economics Department at Lewis and Clark College.
“Herman Steinhardt was a businessman working in textiles in Austria during the 1930s. He and his wife, who [were] Jewish, were forced to leave the country because of the growing Nazi threat. Unable to find a job in textiles, in the United States, he decided to pursue an academic career. After receiving a degree in economics, he was hired as a professor and a chair at the college. He retired in 1964.
“To honour his many years of service, friends of the economics department established a lecture series in his name in the 1970s. The Steinhardt Lecture is given every February by a distinguished scholar, chosen by the economics department and faculty. And the purpose of the Lecture is to engage in public policy issues.
“The 2013 Lecturer is Dr. L. Randall Wray. He is a Professor of Economics at the University of Missouri-Kansas City. Dr. Wray is also a Senior Scholar at the Levy Economics Institute and the Research Director of the Center for Full Employment and Price Stability [C-FEPS].
“He has published numerous articles and books on a variety of topics, including such [things] as Social Security, banking, the history of money, full employment policies, and financial crises. His two most recent books are Understanding Modern Money: The Key to Full Employment and Price Stability and Modern Monetary Theory: A Primer on Macroeconomics for Sovereign Monetary Systems.
“Tonight’s Lecture will address issues surrounding the public debt and budget deficits, which, are currently subject to heated debates in Washington. Please join me in welcoming Dr. Wray. [Applause]”
Dr. L. Randall Wray: “Well, thank you for coming out. And thank you for inviting me here to give this talk. I’m sure that you’re all reading in the newspapers and watching on TV the debates about the US government budget. So, I’m going to try to answer the question: Can the the US really run out of money? Is this much ado about nothing? Or maybe something to do about a little?
(c. 3:09) “So, President Obama, for a long time, actually, even before the current debate, argued, that ‘our government is running out of money.’ He would like to do more to help the economy, to help the unemployed, but Uncle Sam has run out of money. Economists argue that we’re on an unsustainable debt path. And most Americans seem to have come to some kind of an agreement with these two positions. I just saw, in the hotel this morning, a USA Today poll says 70% of Americans say progress on the deficit is needed this year. And it was by far and away the topic, that had the greatest percent of Americans agreeing this was an issue, a critical issue, that needs to be resolved very quickly. Nothing else was even 50%.
“There’s this fear we hear all the time that we’ve been borrowing from the Chinese and someday they might stop lending to us and we would be in trouble. We have a lot of people arguing that the big budget deficits today, and in the future, are threatening us with hyperinflation. So, we might suffer the fate of Zimbabwe or the Weimar Republic.
“Many people argue that that debt is a burden on our grandkids.
“And, finally, people point their fingers to Europe and say, that could happen to us. We might have a sovereign debt crisis, like the Irish, the Greeks, the Italians, the Spanish. There is rising default risk on these nations’ debt.
“And the bond vigilantes are attacking them, boosting interest rates, increasing interest payments on the debt, and imposing conditions on these countries, forcing Greece to sell off its national heritage in order to try to cover interest payments, that the vigilantes are demanding.
“Is any of this true?
“Mark Twain said, ‘It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just aint so.’
“So, I’m going to be arguing, it just ain’t so. What we think we know is not true.
“First, I’m going to show you some pieces of data. And then we’ll get into the more theoretical arguments. I’m gonna try to not make it any more wonky than we have to make it.
(c. 5:58) “We’ve had a debt limit in the United States for about a hundred years, that was imposed by Congress on itself. If you think about it, it’s sort of a strange thing. Every year Congress proposes a budget and they get the President to sign off on it. And that tells them what programmes are gonna be funded, up to what limit. And then we have some spending, such as on Social Security, that depends on people meeting the requirements of the programme and then they get their checks.
“But, in its wisdom, Congress decided that wasn’t enough, the budgeting process isn’t enough to constrain government. So, they also imposed a debt limit, so that, as the federal government debt rises towards that limit, then Congress has to get together and agree to raise the limit, so that Congress could spend the money—sorry—the Administration can spend the money, that Congress already told it to spend. It’s a strange thing. Other countries don’t do this.
“Normally, it didn’t matter because the Democrats and Republicans would get together and raise the debt limit and life would go on. And the Administration would spend the money already budgeted.
“But the Republicans, together with some Democrats, decided to make it an issue. And, so, we had, a couple years ago a, big debate about raising the debt limit. And a compromise was created to create a fiscal cliff. And the thinking—you’ve heard all of this so much I don’t need to go into it in detail—the thinking was we’ll make it so terrible that come January 1st, 2013, they’ll get their act together and agree to impose budget cuts as a compromise to increasing the debt limit. Well, January 1st came and went and they didn’t do it. So, instead what they [said] was, lets give a two-month extension to March. And we’re going to immediately go ahead and raise the payroll tax, so that up to $2,000 per year will be taken out of paychecks.
“Essentially, what they were doing was just taking back the payroll tax holiday, that they had given to try to stimulate the economy.
“So, anyway, now we’re waiting to see what happens in a few days. If they don’t come to an agreement, we’re gonna have $1.2 Trillion dollars in budget cuts imposed. Half of that is on domestic spending and the other half is on military spending. If you listen to NPR, this morning they were talking about laying off air traffic controllers. And I fly a lot. And this is pretty scary. But just across the board cuts. And that was on purpose. It was to make this extremely painful, so that we would never get to the point that we’re at—and already missed one deadline.
“Anyway, it’s gonna reduce GDP by about 1% directly. And, in spite, of what we were told by some economists, even the IMF has come out and said, you know, wow, there really is a government spending multiplier. If you cut government spending, GDP goes down by a lot more than the cut of government spending. There is a spending multiplier. And, so, that’s going to hit us, too, so, that the effect on GDP is gonna be greater than 1%.
(c. 9:30) “Okay, so, the question is:
“Is there really something we should be worried about?
“Is there any evidence that our government has been taken over by hyperinflationaries?
“Are we on a path to Weimar or Zimbabweland?
“Is debt at a historic high?
“Is government spending out of control?
“Have we really hocked ourselves to China?
“Does the debt burden really burden our grandchildren?
“Will entitlements bankrupt our grandkids?
(c. 10:06) “So, let’s look at data first, as I said. [See accompanying Slide Show]
“Here’s a picture of US federal government debt from 1950 to approximately the present. The red line shows the total amount of debt. But the government owes itself a lot of that debt. Okay? And this is Social Security and, increasingly, the Fed. There are pretty good reasons not to include debt, that the government owes to itself in the calculation. But, if you want to, you’ve got both of them here. And you can take a look.
“You can see that the gap between the two is growing because the goverment owes itself even more and more and more, like you owing yourself. You can decide whether that matters much or not. In any case, no, we’re not at a historic high. Okay? We were much higher in 1950. And you can see how rapidly the debt ratio went down after 1950. You might think that it’s because we paid off World War II debt. And the answer is, no we did not.
“It came down because GDP grew. We reduced the debt ratio by growing the economy. The debt, that we ran up in World War II is still out there, almost all of it. In fact, if you go back to the founding of the country, there’s only been one time, in wich we actually did pay down the debt. That was in 1837. We never did it again. All the debt, that we’ve issued since then, still pretty much exists. Okay?
“But we’ve lowered the debt ratio by increasing economic growth. You could see that the debt ratio really spiked up when the crisis hit. And I’ll talk more about that in a second.
“Many people think that we had such big fiscal stimulus packages and that when Obama came in—of course, he’s a Democrat, which means he must be a big government spender—and, so, the rise of the deficit up to 10% of GDP and the resulting rise of government debt is because of all the discretionary spending, that Obama has put into place. The reality is quite different from that.
“What actually happened is that tax revenue fell off a cliff. The tax revenue fell off a cliff when we went into the very deep recession, the worst since the 1930s. Tax revenue, if you go back, if you can read the numbers back to 2005, tax revenue was growing above 20% per year, phenomenal growth of tax revenue. And, actually, at the time, I wrote that this is going to kill the economy. And in two years it did.
“So, the tax revenue is growing very fast. And then we hit the cliff. We went into a deep recession. The tax revenue disappeared. That is why the budget deficit blew up. There is a bit of a fiscal stimulus. But it’s very, very small compared to the decline in tax revenue. And the automatic stabilisers, transfer payments, like unemployment compensation kicked in because of the recession. So, that’s the top blue line, that goes up, the transfers payments, and unemployment compensation, and food stamps when people lost their jobs and their incomes.
“So, actually, the deficit increase and much of the growth of debt is because the economy has been rotten. If the economy recovered we would expect that tax revenue would go up. And, actually, you notice that tax revenue growth did go up in the last couple of years, as the economy recovered a little bit and as the unemployment rate declined a little bit.
(c. 14:03) “The story about Obama, big deficit spender, fiscal stimulus leading to the big deficit, also doesn’t fit the facts of this one. This is a very unusual recession and attempt at a recovery, in that it’s only in the very beginning when we had a fiscal stimulus, the lighter blue line. Since then, the government, actually, has been a drag on the economy, very unusual, we haven’t had recoveries, since the Ronald Reagan years, in which the government, actually, was a drag on the economy, trying to come out of a recession.
“Here’s another one [slide], the growth in real per capita government spending. Precisely, the opposite of what is commonly said, Obama is not the big government spender. He, actually, has reduced government spending in real terms per capita, while no other previous president going back to Nixon and Ford had done that.
“So, the deficit was not due to government spending. The government, actually, continues to take demand out of the economy, as it now is pulling jobs out of the economy. So, job growth, government job growth, is actually negative.
“Okay, let’s look at the story about we’re at hock to the Chinese. Some of the older people here can remember back in the ‘80s, ’90s, and through the early 2000s, when the same stories were told about the Japanese when the Japanese were accumulating US Treasuries. And there was a great fear that the Japanese would start being the owners of the United States and that we would be controlled by our creditors, who are the Japanese.
“Now, the same story is told about the Chinese. And you can see, earlier on, the Japanese were the big holders and they have declined, as China has become the big holder.
“First, the stories about the Japanese controlling us because they were our creditors never came true. It never happened.
“Second, why is it that, first, the Japanese and then the Chinese become big holders of US government debt? You know? There must be some similarity, some explanation for why that happened. And this picture [PowerPoint slide #12/39] is a little complicated. You might want to look at it in more detail later when it’s posted up on the website.
“I only want to draw your attention to the two top curves over here [pointing to screen with laser pointer]. So, this is showing US Treasury debt held by the rest of the world. Okay? The blue. The other one, you could see, [which] tracks it fairly well, is our current account balance, like our trade deficit?
“So, our trade deficit is very highly correlated with foreigners holding US Treasuries. When we import more than we export, the foreigners, the big, exporting foreigners, who export stuff to us, end up holding a lot of US Treasuries. Okay? Why is that?It’s because they want to sell stuff to us in order to get very safe, dollar-denominated, financial assets. Okay?
“In the first instance, for reasons I’ll explain in a bit, they initially get reserves, which are deposits at the Fed. And those reserves at the Fed don’t earn any interest. The next-best thing they can get are US Treasury bonds. And those do earn interest.
“So, what they do is they trade the reserves at the Fed for US Treasury bonds. And it’s not a surprise at all that the Chinese will end up with US Treasuries when they are exporting Chinese goods to the United States. Okay?
“So, we can explain it perfectly. As long as China wants to run a trade surplus—export to the US more than they import—they will be accumulating US Treasuries. When they change their minds and decide they would rather be consuming the goods themselves than sell it to us, they will stop exporting to the US and they will stop accumulating US Treasuries.
“There’s no imbalance here. It is a balance. They’re doing it because they want to do it, whether it’s in their interest or not is not for us to decide. But, as long as they’re wiling to send us their output, they will accumulate Treasuries.
(c. 19:24) “Now, earlier, I was saying that you do expect the budget deficit to go up when times are bad. And that as we recover tax revenues will go up. That’s already happening. The budget deficit will decline. It’s already happening. The budget deficit declined from about 10% of GDP to about 6.7% of GDP. So, it’s already happening. If we continue to recover the budget deficit will go down. It always has in recoveries. It always will.
“But people say, that’s not our real problem. The problem is not the deficit today. The problem is the long-run deficit, the chronic deficit, that we are stuck with. And that is mostly because of entitlements. It’s because of Social Security and Medicare.
“I’d love to spend the whole 90 minutes talking about those two programmes because there’s so much misconception out there. And it goes beyond misconception—purposely misleadingpeople about those programmes. But I don’t have time to do that. I gotta stick to the fiscal cliff.
“But, anyway, the argument is the budget deficits and rising debt is a problem for the long run. They will continue to go up as baby boomers retire and even beyond that. Some economists carry this all the way to—they do what is called am infinite horizon forecast. It’s not enough to look 70 years into the future, they say. We have to look to an infinite future. So, we project Social Security revenues and spending and Medicare revenues and spending, not for 20 years, not for 70 years, not for a thousand years, forever. They project them forever.
“And then they discount that back to the present. And then they tell you, the programme is $70 Trillilon dollars short.
“Anyway, whether we should worry about that or not, you know, is a completely different matter. What I’m gonna—the forecasting, your ability to do that, and whether the United States will survive forever, I don’t know.
“But, as a way of introduction to the topic about whether its true that budget deficits are unsustainable, whether the federal government could continue to run deficits and accumulate debt outstanding, let’s go back to the fairly recent past—President Clinton—because we’re almost in the opposite situation today, as we were in the late ‘90s. In 1996, the US federal government started to run a surplus and continued for two and a half years, a significant surplus. And I know a few of you will know the answer to this. When was the last time the US federal government ran a significant surplus for more than one quarter? [Inaudible audience member]
“There we go! Right before the Great Depression. Right before the Great Depression. Well, we ran this one right before the Great Crash or sometimes it’s called the Great Recession.
“Anyway, so we ran a budget surplus and Clinton thought this was a great thing and some of you will remember him going on TV projecting we’re gonna run a budget surplus for the next 15 years. And it’s gonna be so large, we’re gonna retire all the government debt, so that we will be completely free of federal government debt for the first time since? 1837, which was followed by our first Great Depression, which most people forget about because it was a long time ago.
“Anyway, all the government debt will be retired. But, you know, it wasn’t all quite rosy because private debt exploded while the government was running a budget surplus. And then, of course, we crashed into the recession after the NASDAQ collapsed and the budget deficit was restored. And everyone had sort of forgotten about this. You know; could you imagine a worse projection? Because right now, today, we should have no government debt, or we should be very close ‘cos we’re about 15 years out. We should be free of government debt. How good was that forecast? Pretty far off. Okay? Pretty far off. And, in fact, we started running a budget deficit soon after he made the statement. He made the statement in 1999. And, by 2000, we were running a budget deficit.
“Okay, why? Why this link between a budget surplus and a private sector deficit? It’s because balances balance.
(c. 24:27) “In 1999, I saw, in The Wall Street Journal, a fantastic article, or fantastic pair of articles. On the left-hand side [of slideshare slide #15/39], I know this is going to be hard for you to read. But it says:
“Budget surpluses may wipe out the government debt, says President Clinton. Okay? Left-hand side.
“And then the article goes on to say:
“Isn’t it fantastic that the government finally is adding to the national savings by spending less than its income? For the first time. (They didn’t say since 1929.)
“On the right-hand side, it says:
“The savings rate declines, again.
“They say, isn’t it terrible that the private sector households are spending more than their income? Isn’t it terrible? And then they give you a nice little picture right in the middle, between the two, that shows you government going from negative saving to positive saving and the private sector going from positive saving down to negative saving. And neither of the articles mentions the obvious question. Could these two things be linked? Well, yes, they are, by identity.
“If the government sector runs a surplus, the non-government sector has to run a deficit. It’s by identity. And here’s the identity. Again, we don’t want to get too wonky, but when we think about the domestic sector, its overall balance has to equal the foreign sector’s overall balance. I know a lot of people don’t like algebra, but pictures are nice. Okay. Here’s the picture [slideshare slide #17/39].
“And what’s the first thing you notice about the picture? It’s a mirror image. Hey, balances balance. Isn’t it nice when the real world cooperates with the theory, or the identity? It has to be true. For everything above zero, there is something below zero, exactly, dollar for dollar. Okay?
(c. 26:40) “The second thing you notice is, boy, there’s a lot of red below the line. That is the US federal government deficit. Whenever the red is below the line, the government is running a deficit. Whenever the red is above the line, the government is running a surplus. And what do you know? The government, well, almost always runs a deficit, almost always—and that’s always been true for the US federal government. There is a period there, that stands out, where the red is above the line, above zero, which means there’s a budget surplus; that’s Clinton. That’s when he’s announcing, we’re gonna do this for the next 15 years. Imagine how much, how big those surpluses would have to have been to offset all of the reds on the other side. Okay? But that’s what he thought he was gonna do.
“Okay, so, a very brief period. And it’s the only one you could see. Okay?
“The blue is the private sector. That’s households and firms, taken together. If the US was a closed economy, there was no foreign sector, the reds would have to, exactly, be balanced by the blues. Anytime the red is below the line, the blue must be above the line, if there’s no foreign sector. So, set aside the foreign sector—that’s the green—just for a minute.
“You could see that before President Reagan there’s almost no green. And the green, actually, is below the line, which means we ran trade surpluses. But they were small, small enough to ignore for the part of the story up until a much later period, okay, beginning with Reagan.
(c. 28:22) “And, so, what our normal situation was the government ran a deficit and the private sector ran a surplus, which meant the private sector was saving, which is what you would normally expect. It’s sort of a good thing when households spend less than their income. They’re accumulating financial wealth. It helps to get the kids in college and to go into retirement. So, you expect that to be [the case,] normally.
“You could see it as very cyclical. When people get scared, they, actually, save more. When they get really enthusiastic and confident, they spend more. Okay? The two, by identity, had to be equal. The causation is hard to explain. But it largely goes from the private decisions to spend or to save to the budget because if the private sector is scared and not spending, and trying to save, the government had to make up the difference with unemployment compensation and food stamps and reduction of tax revenue to keep the economy going. So, that was the normal case.
(c. 29:30) “The Clinton years, again, are very unusual because the private sector started deficit spending. It’s the other side of the coin. For the government to run a surplus, the private sector needed to run a deficit. Okay?
“And I was at the Levy Institute with Wynne Godley, who was the guy who developed this framework; and the private sector had gone into deficit in 1996. By 1998, we were predicting collapse because the private sector had never done anything like this before. If you look at the blue, the deficit spending by the private sector is really big. For every dollar of income, they were spending $1.06.
(c. 30:08) “In 1998, so, they’d been doing this for two years. They had never done this before. Okay? As far as we know, no country has ever done this before. They’re gonna build up too much debt. They’re gonna get scared and realise, Uh-oh, we can’t service our debt anymore. Some would start going bankrupt. And the others would all cut back spending.
“Well, it went on longer than we thought. But it did happen in 2000. So, in 2000, they stopped spending. Budget went back into deficit, as the economy slowed down. Households retrenched. And you could see there’s a very brief period where they stopped deficit spending. And then the really shocking thing is they started deficit spending again, well, after President Bush came in. They started deficit spending. And that went on for another five years.
“So, for a period of almost ten years, with a brief recession, almost ten years, the private sector spent more than its income, every year. It had never done anything like that before. And, all along, we kept saying: This can’t continue. This is unsustainable. This is going to crash.
“It finally crashed in 2007. We lived through the biggest bubble in human history, not the biggest bubble in United States history, the biggest bubble in human history occurred between 2000 and 2006. It wasn’t just housing. It was also commodities.
So, anyway, finally—I’m spending too much time talking about this picture.
“The foreign sector is the balancing item. So, that when the budget deficit doesn’t equal the private sector surplus, it’s because we are running, either, a trade surplus or a trade deficit.
(c. 32:00) “And, since the years of Ronald Reagan, we have run chronic trade deficits. And, so, that is the green above the line because this shows the capital account surplus for the economy. So, that’s why it’s positive. When we run a current account deficit, we have a capital account surplus. So, that’s the balancing item.
“And the US is in this situation where you have—since we have a current account deficit, even if the private sector balances its budget, we will have a government budget deficit equal to the current account deficit. Okay? It’s the structure of—not just the US economy, but—the global economy, in which, many countries of the world want to sell their stuff to us. We can’t decide, by ourselves, to reduce our current account deficit. It takes two to tango. They have to reduce their desire to export to us in order for us to balance the current account.
“But, anyway, balances balance. It’s a mirror image. If you are saying we want the federal government to balance its budget, in the United States, that has to mean, you want the private sector to deficit spend and run up private debt. You want another boom. That’s what it must mean. Anyone who says we’re going to reduce the government budget deficit down to zero, they’re telling you, we want the private sector to spend again, like it’s 2005—Okay?—and crash again. There’s no other alternative to that, given that—for the foreseeable future, we’re not going to get to a current account surplus. We’re not gonna export more than we import for the foreseeable future. It could change. I don’t know when. I don’t see it happening. I don’t know any economist who is predicting that that’ll happen in the next decade or two.
(c. 34:02) “Okay. It’s claimed that this is unsustainable, even though we’ve been doing it since about 1789. It’s unsustainable. Someday it’s gonna come back and get us—Okay?—these government budget deficits. Someday it’s going to get us. There’s supposed to be this relationship—and this stuff gets wonky—but the basic idea is if the government pays a higher interest rate on its debt, then the growth rate of the economy—mathematically—what happens is the debt ratio tends to grow over time. So, we go from, say, a debt ratio of 40% to GDP to 60% to 100%. Okay? And, as the debt ratio goes up, it means the government has to spend ever more on interest, which makes the debt ratio go up even more.
“And then the bond vigilantes will say, Uh-oh, your government debt ratio is above 60%, or uh-oh, it’s above 100%, or—in the case of Japan—uh-oh, your debt ratio is 200% of GDP—by the way, they still pay 0% interest—200% of GDP—they’re gonna attack you and push your interest rates up, like they did to Greece. So, that’s the basic argument.
(c. 35:17) “So, what we need to show is, first, why a government doesn’t face insolvency, and, so, why there, actually, is no reason to worry about a government default—even if the debt ratio does continue to grow, even if it did.
“And, second, why deficits actually don’t raise interest rates—so, now, unfortunately, we get into the theory part. But just to show you that what I’m going to be arguing is not so far out there, here’s the St. Louis Fed. This is a recent research paper by the St. Louis Fed. The economists here know the St. Louis Fed is a monetarist Fed. It’s a Milton Friedman Fed. Okay? It’s not some crazy bunch of Keynesian type economists. These are monetarist, conservative economists:
“‘As the sole manufacturer of dollars, whose debt is denominated in dollars, the US government can never become insolvent—’
“This is the Fed. Okay.
“‘—unable to pay its bills. In this sense, the government is not dependent on credit markets to remain operational. Moreover, there will always be a market for US government debt at home because the US government has the only means of creating risk-free dollar-denominated assets.’
“Now, let me translate to plain English:
“The government can never run out of dollars.
“It can never be forced to default.
“It can never be forced to miss a payment.
“It is never subject to the whims of bond vigilantes.
“This is what the St. Louis Fed tells us. You can find identical statements from Alan Greenspan, from Ben Bernanke. Okay? Again, both monetarists.
“Here, let’s go abroad, Lord Adair Turner, the Chairman of the FSA, he was in line to become the head of the Bank of England. He didn’t get it. But very well respected. He says:
“’Within limits, financing government spending by printing money absolutely, definitively does not lead to inflation.’
“‘I accept entirely that this is a very dangerous thing to let out the bag—’
“We don’t wanna tell people this stuff. So, don’t let it get out of this room, right?
“‘—that this is a medicine in small quantities, but a poison in large quantities, but that there exist some circumstances, in which it is appropriate to take that risk.’
“And he’s arguing, this is the time to do it.
“Go back to Paul Samuelson. Maybe some of the older people, that are here, used his textbook, okay, in the 1960s and beyond. He says, ‘I think there’s an’—this is an interview, by the way, with Mark Bowden. [Samuelson] says:
“‘I think there is an element of truth in the superstition that the budget must be balanced at all times.’
“But he goes on later to relax that and say, not even at all times, but over the course of a cycle.
“‘Once it is debunked [that takes away one of the bulwarks that every society must have against expenditure out of control. There must be discipline in the allocation of resources or you will have anarchist chaos and inefficiency.’]
“And then [Samuelson] says:
“‘And one of the functions of old-fashioned religion was to scare people by sometimes what might be regarded as mythsinto behaving in a way that the long-run civilised life requires.’
“So, the necessity of balancing the budget is a myth. It’s a superstition, the equivalent of that old-time religion. So, what is the truth?
(c. 38:31) “If economics is to rise above superstition, you know, I’m a professor, there are professors here—I’m not happy teaching students myths and superstitions. Maybe if you’re selling or marketing something, that’s understandable. But I don’t think it is when you’re an economist.
“So, we have to look at, how does the government actually spend? Ben Bernanke was asked when he was before Congress:
“‘Where did you get all that money you used to bail out Wall Street?Was that tax money?’
“‘No, no, no, no, no.’
“‘It was keystrokes. We keystroked that money into existence.’
“And that’s absolutely right. That is the way government spends. Spending leads to credits to bank accounts. When the government buys something or makes a Social Security payment, what they do is they keystroke reserves into the account of the bank. And the bank keystrokes into your deposit account. That’s what money is now. It’s keystrokes. Most of it is electronic.
(c. 39:41) “So, the government just credits the bank reserves. And the bank credits the account of the recipients.
“Tax payments are exactly the opposite. They are reverse keystrokes. They lead to debits of accounts. The government debits the bank’s reserves. And the bank debits the account of the taxpayer.
(c. 40:00) “So, if the government keystrokes more credits into existence than it debits, we call that a budget deficit. Okay? It leads to a net credit to banking system reserves and to the accounts of the recipients.
“You can think of money as scorekeeping. Since I’m in America, you all know what this is. [Gesticulating to slide of Fenway Park scoreboard] I was just in Mexico and, fortunately, they all love baseball, too. So, the all immediately recognised. Oh, yes, there we go. Boy, Tampa Bay is beating the socks off of Boston, right?
“You can see the scorekeeper down here in the corner. What if Tampa Bay has another big inning and gets a bunch more runs. Is the scorekeeper ever going to run out of runs to award Tampa Bay? No, he’s not gonna run out. Okay? He’ll just credit it; it’s keystrokes. In the old days, they actually had to physically put the numbers up. Maybe they could’ve run out of ’em. But they can’t anymore. It’s all electronic. They cannot run out of keystrokes.
“If they find out that there was a mistake. The umpire made a bad call or something and he realised he put a run up and they didn’t deserve it. What does he do? It’s a reverse keystroke. Right? He takes it away. Where does it go? It doesn’t go anywhere. He just takes it away.
(c. 41:25) “If what I’m saying is true, if the government keystrokes its spending into existence, why does the government sell bonds? I mean, you can understand why a private firm would sell bonds. They need to borrow. They can’t just keystroke their spending. The federal government keystrokes.
“Okay. Here’s the answer. Deficit spending leads to net credits to banking system reserves. When banks have more reserves than they want, they offer them in the overnight market. In the United States that’s called the Fed Funds Market. If banks, in the aggregate, have more reserves than they want, you have more of them offering reserves in the overnight market than want to borrow them in the overnight market. That pushes the overnight interest rate down.
(c. 42:13) “So—let me repeat this for the people who’ve had some economics because you’re usually taught exactly the opposite, which is wrong. Budget deficits push the interest rate downbecause it leads to excess reserves in the banking system. So, the interest rate is bid down in the overnight market. Budget deficits push the interest rate down.
“The central banks, today, all, even openly, admit that they use interest rate targets. Nobody pretends anymore that they control bank reserves or that they control the money supply. They target the overnight interest rate in the US Fed Funds Rate.
“So, when the Fed sees the excess reserves in the banking system driving the interest rate down, they offer bonds called an open market sale. They sell bonds.
“Banks, that have excess reserves, say, ‘Oh, good. We would rather hold the Treasuries, that pay higher interest.’ Until two years ago, reserves earned zero. So, any interest rate paid on government bonds was better than zero. Bankers aren’t that stupid. Okay?
“So, they would always use the reserves to buy the bonds. So, you can think of bond sales, as being a reserve drain. That’s what they do. They drain reserves banks don’t want out of the banking system. So, bond sales are actually part of the monetary policy.
“The problem is that the Fed, in normal times, has a limited quantity of bonds to sell. They very quickly sell off all the bonds they have in their portfolio. Now, that’s not gonna happen now because, thanks to Uncle Ben, we have quantitative easing, which means the Fed has gone out and bought $2 Trillion dollars worth of bonds. So, they got plenty of ‘em now, but in normal times they didn’t have enough.
(c. 44:07) “So, they call up the Treasury and say, We’re gonna run out of our bonds, if you don’t sell some bonds. So, the Treasury sells bonds, too. Both, the Fed and the Treasury sell bonds. And the functional impact of that is to drain excess reserves out of the system, so the Fed can hit the overnight interest rate target. That’s what it’s all about—interest rate targeting.
“So, you can think of bonds as just an alternative to, either, zero- or low-earning bank reserves. Another way for the markets people is that it increases the duration. What quantitative easing did was decrease the duration of financial assets out in the market.
(c. 44:51) “Now, we do have self-imposed constraints. One of those is the budgeting process, itself. The budgeting process limits the ability of the administration to spend like it’s Weimar all over again. They can only spend what’s been budgeted. So, that is one constraint on government spending.
“Affordability is not a constraint.The government can always afford to spend more, but you don’t want them to. You don’t want ‘em to spend too much for two reasons. They can cause inflation. And, second, if the government is taking resources, it leaves less for the private sector. If the government takes more for the public purpose, there’s less left for the private purpose. So, you wanna constrain the government.
“So, the budgeting process is the way that, you know, all governments do—or, at least, should—constrain themselves. You have to go through budgeting. It’s gotta be approved.
(c. 45:53) “But, in addition to that, the US, Congress, in its infinite wisdom, put on debt limits. Other countries don’t do this. Okay? They say [in the US], Well, we don’t really trust ourselves. We had a budgeting process. But we don’t trust ourselves. So, if we run up against a debt limit, we gotta get together and agree to do it.
“And, as I said, normally that’s not a problem. But today it’s become a political problem.
“In addition, we put on operational constraints. Okay? These didn’t come from nature. And they didn’t—they were not imposed on usby the markets. We decided to do this to ourselves. Okay?
“One [operational constraint]is that we decided, when we created the Fed, that the Treasury would use the Fed as its banker. This was in 1913. Other countries had created central banks, even before 1700. We were really late getting into the game of creating a central bank. Before that the Treasury, either, used private banks or it just spent, itself. It didn’t go through its own government bank. But in 1913, we decided—for a variety of reasons—to create a central bank. And they said, ‘Okay, Treasury, you can only spend if you have your money in the account at the Fed.’ Okay? Alright.
“Then they decided; let’s add one more constraint. ‘And, Treasury, you cannot sell debt to your bank. You can sell it to anybody else. You can’t sell it to your own bank.’
“This would be like you’ve got a bank. Okay? I don’t know, Bank of Portland. That’s where you do your business. Your bank is prohibited from taking your IOU. Any other bank can take it. But your own bank can’t. It’s a very strange limit to put on yourself. But that’s what we decided to do. And a lot of other countries followed us. So, there are countries around the world that do do it this way. They don’t do the debt limit thing, but they do do this. Okay?
(c. 48:02) “And the belief was this would prevent us from becoming Weimar because the Treasury doesn’t have the option of just selling its debt—or we could just simplify this by calling it borrowing—it can’t just borrow from the Fed. The Fed is prohibited from buying Treasuries directly from the Treasury. There are some exceptions to this. It’s not a 100% rule, but it’s pretty close. The Fed can buy bonds, US Treasury bonds, from anybody, except the issuer of US Treasury bonds. The Treasury—another strange thing, if you think about it.
“Okay, so it was believed this would constrain spending because the Treasury could only sell bonds in the private markets, not to the central bank. Now, in fact, it has no impact whatsoever. And the reason is because we set up special banks, called special depositories, that have special kinds of accounts called Tax and Loan Accounts. And these allow the Treasury to completely subvert this operational limit because they can sell the bonds directly to these private banks. And then the private banks sell them on to the Fed. The bonds go right to the Fed, anyway. Okay? And then the Treasury gets its account at the Fed and it can write checks. And, so, it, actually, does not impair the Treasury’s ability to conduct normal business.
(c. 49:33) “Central bank policy—the consensus now is central banks always operate on an overnight interest rate target. That means they always accommodate demand for reserves. And that means they are able to set the overnight interest rate. Now, the Fed does not set all the interest rates. Okay? The Fed sets—directly—the overnight interest rate. They could, if they wanted to, set and hit a target for the interest rate on any maturity of Treasury debt. If they wanted to do it, they can do it directly by buying and selling Treasuries of that maturity in a significant quantity standing ready to always buy or sell at the price consistent with the interest rate that they want to hit. So, they could do that, but they don’t. They set the overnight interest rate. And then the others are set, relative to that one. Okay?
(c. 50:32) “There’s a difference between a country, that has a convertible, versus a non-convertible, currency. You see, a convertible one is where the government says we will convert our currency to a foreign currency on demand at a fixed exchange rate. That’s a convertible currency. Nonconvertible means that they offer you no promise. Now, the United States, we don’t offer any promise. Can you convert the currency? Sure; you can. But you have to do it at whatever exchange rate exists at the time. Okay.
(c. 51:06) “Unlike Greece. Okay? Greece has the most strict kind of convertible currency you possibly can have. They adopted the Euro, which isn’t even their own currency. Okay? So, they are on a very strict convertible standard by adopting, essentially, a foreign currency. It’s a lot like when Argentina adopted the US dollar.
“They can’t control their interest rate.They are subject to the market. A country with a non-convertible currency, like the US and Japan and the UK, we do set our overnight interest rate. It’s not determined in markets.
[slide #27/39] “So, let me summarise. Sovereign currency: Here I mean a country with a government, that issues its own currency. Okay? Now, it can, either, float, manage, or peg its exchange rate—it’s still a sovereign currency, but you give up policy space if you don’t float.
(c. 52:11) “So, I’m going to focus on the ones with more policy space, like the US, Japan, and the UK, where we do float our currencies. In those, then, deficit spending creates private financial wealth. Well, this is true in any of them. It comes from the identities. Note that central bank operations do not—I’ll come back to this in a second—central banks don’t create net wealth. So, the way that I always explain this to my students is, I say: The central bank lends dollars into existence; the Treasury spends dollars into existence. The first one doesn’t create any net financial wealth. The second one does. Budget deficits create private sector surpluses.
(c. 52:56) “It doesn’t matter whether the bonds have to be sold first into the private market first, rather than the Fed, so long as the central bank accommodates reserve demand.
“It doesn’t matter whether the central bank is prohibited from buying new issues because they do it roundabout through the banks. And it doesn’t matter whether Treasury has to have ‘money’ in its account at the central bank to spend because the central bank and banks cooperate to make sure the Treasury always has that.
“All of this has been describing the system we have. It’s not a recommendation. Okay? We can add on to this understanding what Abba Lerner—a famous economist,who, actually, spent some time teaching at the University of Missouri-KansasCity, where I’m from—said:
“‘A government should spend more, if there is unemployment.’
“How can you tell if the government is spending enough? Or not enough? Or too much? Look at employment. You don’t look at the size of the budget deficit. He said:
“‘You look at whether you have unemployment. If you have unemployment, you’re not spending enough. If you’re at full employment, you shouldn’t increase spending anymore.’ Okay? That’s when you know when you’ve spent enough. You’ve got full employment.
(c. 54:07) “The second principle of functional finance is the government should supply more money—he meant bank reserves—if the interest rate is too high. Again, you can’t tell by the quantity of reserves out there. You [can] tell by looking at the interest rate.
“So, in other words, what he’s saying is you don’t worry about the budgetary outcome. The debt outcome should never be a primary consideration of spending.
[Slide #29/39] “Continuing on with policy. These are long quotes. I’ll read ‘em very quickly. The first one is by Milton Friedman. He said:
“‘Let’s suppose that one day a helicopter flies over this community and drops an additional $1000 in bills from the sky, which is, [of course, hastily] collected [by members of the community]’ and then spent.
“This is, of course, Milton Friedman’s famous quote, which everyone interprets as saying; monetary policy is like helicopters flying around dropping money.And that’s inflationary. Okay? That was his argument.
(c. 55:00) “Here is Keynes. Keynes says, and many of you will recognise this quote, too:
“‘If the Treasury were to—he’s talking about in conditions of a depression or deep recession, like we’re in now.
“‘If the Treasury were to fill old bottles with bank notes, bury them at suitable depths in disused coal mines…and leave it to private enterprise [on tried principles of laissez faire]’ to hire workers ‘to dig [the notes up again…’], we’d solve the unemployment problem.
“Now, it wasn’t that he was recommending that this is the best policy. This was supposed to be ironic. He was saying, look, if policy makers are too stupid to think of better uses for the labour, at least you could dig holes and bury money. Okay? Obviously, there are better solutions, but he was saying that if you did this, then ‘the real income of the country will be a good deal greater than it actually is.’ And you could get yourself out of a depression by doing something like this.
[Slide #30/39] (c. 55:55) “Here is Martin Wolf today, probably, you read him in the Financial Times. He’s one of the great journalists today. He said:
“‘In the present exceptional circumstances, when expanding private credit and spending is so hard, if not downright dangerous—’
“You know, the idea that we should get banks lending again to the private sector, so that they could deficit spend again is fairly crazy.
“‘The case for using the state’s power to create credit and money in support of public spending is strong.’
“‘Japan should have done some outright monetary financing—’
“He means deficit spending.
“‘—over the last 20 years, and if it had done so, would now have a higher nominal [gross domestic product], some combination of a higher price level—’
“That might sound scary, but Japan would love to have inflation. They’ve got deflation. Okay?
“‘—[and a higher real output level], and a lower debt to [gross domestic product] ratio.’
“If they had deficit spent more in the past, their debt ratio today would, actually, be lower. Their debt ration now is 200% of GDP because their economy is still in the tank. If they had been able to get growth going the debt ratio would be lower than it is now.
[Slide #31/39] (c. 57:09) “Is Japan a scary precedent? Possibly. Japan, in the 1980s, like us in the 2000s, was growing rapidly. And, at the time, everyone in America pointed to Japan as the path we should be following, not recognising that the government deficit was helping them to grow. But the problem was that they had a tremendous real estate bubble in commercial real estate, mostly, not like in the US, where it, largely, in the 2000s, was residential real estate.
“Anyway, then the government budget moved to a surplus and it started sucking income out of the economy. And the economy collapsed. And they’ve had 20 years of recession, deflation, and falling real estate prices. And how did they respond to that? With quantitative easing, just like we’ve done, very low interest rate policy.
[Slide #32/39] “So, just mapping US data so far onto Japanese data over the past 20 years, it does look scarily similar. Here’s inflation data, CPI data for Japan. And you could see Japan has been, actually, below zero for years now. That is deflation.
[Slide #33/39] “Here is the budget deficit, as a percent of GDP. Their budget deficit went to 10% of GDP and then started declining, just as ours is doing.
[Slide #34/39] “And here is their interest rate policy. They took a little longer to get to zero than we did. We went to zero quicker. And they’ve been at zero forever. And they’re still stuck. Okay? We’re trying the same thing that they tried to get out of their doldrums and with pretty much the same results, so far. They tried some very small fiscal stimulus packages, but, then, they always worried about the budget deficit. And they tightened again, usually, with a tax increase. And, so, they’ve been stuck in this recession for a very long time.
(c. 59:20) “Let me just finish up now. I just wanna point out, because people say we could be like Greece, the Euro nations are very different from us. The member states all gave up their own currencies when they joined the euro. So, Italy gave up the lira. They adopted what is, essentially, a foreign currency—called the euro. And they became very much like a USA state. They became a user of the currency. Okay? Oregon is a user of the dollar. The state of Oregon is not the issuer of the dollar. In fact, if they tried printing it up, I think Uncle Sam will be here pretty quick and tell you that you cannot do that.
“So, they became much like the US states. They’re constrained in their spending by their tax revenue, their bond sales in the markets, and the willingness of the ECB to lend. Their problem, unlike Oregon, is they have no Uncle Sam. They do have a central bank, which says every federal reserve district, which (very brilliantly) is not identical to state boundaries—that, actually, was a good set up—there still is the possibility that the reserve bank of San Francisco can go to the Fed, just as their reserve bank can go to the ECB. But they don’t have an Uncle Sam to look out for them.
(c. 1:00:00) “When the Euro was first set up, we did the analysis this way. We said, ‘Ah, okay. Italy has become the new New Jersey. Or France has become the new New York. Hey, you know what? US states go bankrupt, now and then. That can happen to them, too.’ We thought, the first time there was a crisis, a financial crisis in Euroland, the euro governments would immediately get into trouble. And that’s exactly what happened.
“By adopting the euro, the sovereign nations turned into something like US states. Unlike US states, the euro governments have to fund their pensions, their health care, and they have to bail out their banking systems. And that last one is what killed them.
“If you looked at US states before the crisis hit, they had debt ratios you could see in the teens. Okay? Does anyone remember—how big of a debt ratio was permitted under Maastricht? 60%. Okay. So, Maastricht criteria said, Greece, Italy, and so on, go ahead, you can run up debt ratios to 60%. When we found the data on US states, we said, No, you can’t. You run a debt ratio bigger than 15% and the market’s gonna shut you down.‘ Okay?
“And, so, it was very obvious that the 60% was way too high for a non-sovereign government. So, a crisis was going to kill them.
“Currency-issuing government spends by crediting bank accounts.
“Taxing by debiting can always afford to spend more.
“There are issues. Inflation is an issue. You have to worry about inflation.
“Exchange rate effects: the dollar could go down, if we spend more. That could happen.
“And there could possibly be interest rate effects, not on the overnight, on the other longer maturity rates.
“A sovereign currency gives more policy space.
“There’s no default risk.
“You can control your interest rates.
“You can use policy to achieve full employment.
“Now, I wanna close by telling you what I did’t say because a lot of times people hear things I didn’t say. So,let’s make it clear what I didn’t say:
“I did say a sovereign government faces no financial constraints. It cannot become insolvent in its own non-convertible currency. But it can only buy what’s for sale in its own currency. Not a problem in the US. Anything, for sale for dollars, anything for sale in the United States is for sale in dollars and the US government can buy it. You go to some developing countries, there are things, that are not for sale in the local currency. Then, the government cannot buy them in its local currency. Okay? But not an issue for developed countries.
“I did not say the government ought to buy everything for sale. Okay? The size of the government is a political decision with economic effects—mostly it’s a political decision. Capitalist economies seem to work okay with governments, that are about 20% of GDP—the US, Japan isn’t much bigger. And some capitalist countries work very well with governments, that are 50% of GDP—France.
“So, somewhere in that range is probably where you need to be—20 to 50%. What do you choose? Politics. It depends on what you want, what you want your government to provide.
“I did not say deficits can’t be inflationary.
“Deficits, that are too big canbe inflationary.
“And I did not say that deficits cannot affect exchange rates. That’s why you need a floating currency, so that you don’t have to worry about the pressure of holding an exchange rate when you are stimulating your own economy. That’s it.
Question and Answer
Host: “We have about 25 minutes for questions.”
Questioner #1: “Is there any reason to believe that there is—”
Transcript by Felipe Messina for Media Roots, Breaking the Set, and New Economic Perspectives
MEDIA ROOTS — If scientists working for petrochemical corporations can manipulate molecular structures to derive new substances, plastics, so can scientists working for a greener agenda.
SCIENCE DAILY — Plastic bags are a bane of nature. And not just bags — just about all plastics, really. Most are made out of petroleum, and a piece of plastic, if it misses the recycling bin and ends up in a landfill, will probably outlast human civilization.
But Chuanbing Tang at the University of South Carolina is developing new plastics that are “green” from the cradle to the grave. Given that the new polymers he’s working on often come from pine trees, firs and other conifers, he’s giving the word “evergreen” added resonance.
Rather than tapping a barrel of oil to obtain starting materials, Tang’s research group instead begins with the natural resins found in trees, especially evergreens. The rosin and turpentine derived from their wood is rich in hydrocarbons, similar but not identical to some components of petroleum.
Hydrocarbon-rich starting materials, whether from petroleum or tree resin, can be converted into various forms of what are commonly termed “plastics” through polymerization. With petroleum derivatives, scientists have invested more than a hundred years of research into refining the polymer chemistry involved, and their success in that endeavor is evident in the range of plastics now part of common parlance, such as Plexiglas, polycarbonate and PVC.
MEDIA ROOTS — Life in modern USA is increasingly polarised. A false two-party system, designed and executed by the elite class, erodes democracy and allows elites to continue to swim in money whilst public institutions, such as schools and parks and post offices, cease to operate. Public purpose is often distorted and the social contract is undermined, as families are dispossessed.
In communities around the country, many working-class Americans know about class repression and resistance while many academics often seem to operate in a detached, parallel universe. This is primarily why independent media, along with its popular support, must continue to honestly articulate the searing indictments of our supposed democracy.
Free speech is an American tradition, which must always be protected. Often times, it’s difficult to question the decisions of contemporary politicians without catching the full belligerence of the state apparatus behind them. The USA’s War on Kids signifies our march to render a free-thinking citizenry, a notion of the past.
“Punishment and fear have replaced compassion and social responsibility as the most important modalities mediating the relationship of youth to the larger social order,” reminds cultural studies professor Dr. Henry Giroux. “And as the War against Poverty is transformed into [a War against the Poor and] a War against Crime, young people are often subjected to intolerable conditions, that inflict irreparable harm on their minds and bodies. Many youth have to now endure drug tests, surveillance cameras, invasive monitoring, random searches, security forces in schools, and a host of other militarising and monitoring practices, typically used against suspected criminals, terrorists, and other groups represented as a so-called threat to the state.”
Messina is a guest contributor to Media Roots (Additional comments below)
AGAINST THE GRAIN— “And this is Against the Grain on Pacifica Radio and online at kpfa.org. My name is C.S. Soong.
“Ideally, young people grow up to be engaged, critical, and politically aware participants in a robust public sphere. Is this in fact happening? Or is it even possible, given this nation’s political and cultural systems and priorities? Henry Giroux has many things to say about what’s happened to democratic possibility in the U.S., about the rise of what he calls the punishing state, and about how market fundamentalism infects how we’ve come to treat and educate young people.
“In a wide-ranging talk at Eastern Michigan University, the veteran author, educator, and outspoken social critic connected the history and ideology of neoliberal policies to trends in education, incarceration, and social control.
“Henry Giroux is a professor of English and Cultural Studies at McMaster University in Ontario Canada. His books include Against the Terror of Neoliberalism: Politics beyond the Age of Greed, and Schooling and the Struggle for Public Life. Let’s go now to Professor Henry Giroux speaking at Eastern Michigan University in Ypsilanti, Michigan.”
Dr. Henry Giroux (c. 8:52): “As the current financial meltdown reaches historic proportions, free market fundamentalism or neoliberalism, as it’s called in some quarters, appears to be losing, neither, its claim to legitimacy, nor its claims on democracy. As the recent healthcare debate made clear, the decades-long conservative campaign against the alleged abuses of ‘big government‘ is far from over. In the 1980s, when Ronald Reagan insisted that government was the problem not the solution, he unleashed what was to become a neoliberal juggernaut against, both, the welfare state and the concept of the public good.
“Reagan’s conservative ideological stance revealed a kind of smouldering market-driven disdain for any form of governance, that assumed a measure of responsibility for the education, the health, and the general welfare of the country’s citizens. He also helped launch a political era, in which consumerism and profit-making were defined as the essence of democracy, and freedom was redefined as the unrestricted ability of markets to govern economic relations, free of government regulation. Even worse, the obligations of citizenship, if not agency, itself, were reduced to the never ending need to consume goods, buy into market-driven services, and fashion public needs according to the protocols of celebrity culture. (I’m just sick of it. He-heh. Do I really need to hear about breast implants anymore?) (Audience Laughs)
(c. 10:42) “For over 30 years, the American public has been reared on a neoliberal dystopian vision, that legitimates itself through the largely unchallenged claim that there are no alternatives to a market-driven society, that economic growth should not be constrained by considerations of social cost or moral responsibility, and that democracy and capitalism were virtually synonymous. At the heart of this market rationality is an egocentric philosophy and culture of cruelty, that sold off public goods and services to the highest bidders in the corporate and private sectors, while simultaneously dismantling those public spheres, social protections, and institutions serving the public good. And as economic power freed itself from traditional government regulations, a new global financial class reasserted the prerogatives of capital and systematically destroyed those public spheres advocating social equality and an educated citizenry as a condition for a viable democracy.
(c. 11:55) “At the same time, economic deregulation merged powerfully with the ideology of unregulated self-interest, effectively evading any notion of social and corporate responsibility, while undercutting any sense of corporate accountability to a broader public. And, as a result of the triumph of corporate sovereignty over democratic values, the supervisory authority of the state was reconfigured into a disciplinary device, largely responsible for managing and expanding the mechanisms of control, containment, and punishment over a vast number of American institutions.
“And as the social contract came under sustained attack, the bridges between public and private life have been dismantled and the market has become a template for structuring all social relations. And with the devaluing of public goods, public values and public institutions, the model of the prison has begun to emerge as a core institution and mode of governance under the neoliberal state.
“Democracy has suffered a major hit. And the list of casualties is long and includes the ongoing privatisation of public schools, health care, prisons, transportation, wars, the public airwaves, the public lands, and other crucial elements of the commons along with the undermining of some of our most basic civil liberties.
(c. 13:38) “At the same time, those institutions, that once offered relief and hope to people, were now replaced by the police and other vestiges of the criminal justice system.
“The legacy of casino capitalism, with its reckless gambling and corruption, has contributed to the loss of trillions of dollars and the undermining of the most basic of American values. Making a mockery of an aspiring American democracy, the economic neo-Darwinism of the last 30 years has given reign to a society, that ‘celebrates fraud, theft, and violence.’
“The holy trinity of deregulation, privatisation, and commodification has produced vast inequities in wealth, income, and power, exemplified by the fact that ‘at the start of the recession, the collective wealth of the richest 1% of Americans was greater than the bottom 90% combined.’
“But the regime of neoliberal capitalism has, not only, produced ‘the biggest concentration of income and wealth since 1928,’ it’s also caused enormous hardship and suffering among those populations now considered redundant and, increasingly, disposable.
“Undeniably, the social and economic collapse we are now experiencing was preceded by a moral and political collapse, largely caused by a political class and a formative culture deeply insensitive to its ethical and social responsibilities. The renowned historian Tony Judt has insisted that, since the 1980s, we have inhabited what he calls the ‘Age of Pygmies—
“(Did somebody say the vice president’s name? The former vice president? No? Okay.) (Audience Laughs)
“—a time largely consumed by locusts‘ and characterised by an ‘uncritical admiration for unfettered markets, a disdain for the public sector, the delusion of endless growth, and an obsession with the ‘pursuit of material wealth, while indifferent to almost everything else.’
“The dreamscape of neoliberalism has ushered in a long period of social and economic revenge against those populations marginalised by race and by class. The new government of insecurity has reshaped welfare through punitive policies, that criminalised poverty, push people into workfare programmes, so as to force them into menial labour, and, where that failed, made incarceration the primary tool for making such populations disappear. [As Loic Wacquant has argued, ‘Poverty has not receded, but the social visibility and civic standing of the trouble-making poor have been reduced.’ Moreover, we have witnessed in the last few decades the rise of a punishing state, that ‘offers relief not to the poor, but from the poor, by forcibly ‘disappearing’ the most disruptive of them, from the shrinking welfare rolls on the one hand and into the swelling dungeon of the carceral castle on the other.]
“Populations, that were once viewed as facing dire problems in need of state interventions and social protections, are now seen as a problem threatening society. This becomes clear when the War on Poverty is transformed into a War Against the Poor, when young people, to paraphrase W.E.B. Dubois, become problem people, rather than people who face problems, when the plight of the homeless is defined less as a political and economic issue in need of social reform, than as a matter of law and order, or when the state budgets for prison construction eclipses the budgets for education.
“The reach of the punishing state is especially evident, in the ways in which many public schools now use punishment as the main tool for control. Just as neoliberal logic extends well beyond the economic realm, we must also consider at a deeper level how we dismantle permanent war, fear, and cruelty, how we learn to think beyond the narrow dictates of instrumental logic, how we decriminalise certain identities, how we depathologise the concept of democracy and recognise how we force a culture of questioning and shared responsibilities, and how we reclaim the public good, and how we reconstitute, in short, a viable and sustainable democratic society. What are the implications of theorising education pedagogy and the practice of learning as essential to social change? And where might such interventions take place? It seems to me, one such place to begin is with the current state of young people in the United States.
“While youth have always represented an ambiguous category, young people are under assault today in ways, that are entirely new because they face a world far more dangerous than at any other time in recent history. As Jean-Marie Durand points out, as war and the criminalisation of social problems becomes a mode of leadership, a mode of governance, youth is no longer considered the world’s future, but is a threat to its present. For youth, there is no longer any political discourse, except for a disciplinary one.
“This intensifying assault on young people can be more fully grasped through the related concepts of, what I call, the soft war and the hard war. The soft waranalyses the changing conditions of youth within the relentless expansion of a global market society, that devalues and exploits all youth by largely treating them as markets and commodities. This low-intensity war is waged by a variety of corporate institutions, through the educational force of a culture, that, both, commercialises every aspect of kids’ lives and uses the internet, cell phone, and various social networks, along with the new media technologies, to address young people as markets and consumers in ways that are more direct and expansive than anything we have ever seen in history.
“The reach of the new screen electronic culture on young people is disturbing. For instance, a recent study by the Kaiser Family Foundation found that young people ages 8-18 are spending more than seven and a half hours a day with smart phones, computers, televisions, and electronic devices, compared with less than six-and-a-half hours five years ago. When you add additional time youth spend texting, talking on their cell phones, watching TV, updating Facebook, the number rises to eleven hours of total media content each day outside of school.
“There’s more at stake here than what we would call attention deficit disorder. There’s also the issue of how this new media is being used to create a new generation of consuming subjects. Corporations have hit gold with the new media. They can inundate young people directly with their market-driven values, desires, and identities, all of which are removed from the mediation and watchful eyes parents and adults. This is not to suggest that there aren’t other ways to use this media. This is to suggest something about the way in which the media is controlled, who has ownership. This is not simply about being inventive. This is not simply about being able to use this media in marvellously political and in some way socially useful ways. It’s about questions of ownership. It’s about questions of what happens to that media when it’s owned by very few corporations.
“The hard war is more serious and dangerous for young people and refers to the harshest elements and values and dictates of a growing—what I call—youth crime complex, that increasingly governs poor minority youth through the logic of punishment, surveillance, and control.
“For example, the imprint of the youth crime complex is evident in the increasingly popular practice of organising schools through disciplinary practices that subject them to constant surveillance through high-tech security technologies, while imposing on them harsh and often thoughtless zero-tolerance policies, that closely resemble the cultures of prisons.
“Poor minority youth have not just been excluded from the American Dream, but have become utterly redundant and disposable, waste products of a society, that no longer considers them of any value. And such youth, subjected to a form of racial and class dumping, now experience a kind of social death, as they are pushed out of schools, denied job training opportunities, subject to rigorous modes of surveillance and criminal sanctions, viewed less as chronically disadvantaged than as flawed consumers or worse, civic felons.
“And as the social safety net unravelled in the last 30 years, as they unravel, the cultural and administrative apparatus of the prison, operating within the narrow registers of punishment and crime management, has become a core institution of American society. In part, this is evident in the fact that over 7 million people are now under the jurisdiction of some element of the criminal justice system. And within this regime of harsh disciplinary control, there is no moral or political vocabulary for, either, recognising the systemic, economic, social, and educational problems, that young people face, or for addressing what it means for American society to invest seriously in the future of its young people.
“What are we to make of a society, that allows the police to come in to a school to arrest, to handcuff, to haul off, a twelve-year old student for doodling on her desk?
“Even worse, where is the public outrage over a school system, that allows a five-year old kindergarten pupil to be handcuffed and sent to a hospital psychiatric ward for being unruly in a classroom?
“What does it mean when a society looks the other way when 25 Chicago middle schoolers, ranging in age from eleven to 15, are arrested for a food fight and held for eleven hours in a police station, charged with misdemeanour reckless conduct, and later suspended from school for two days? Or when an eleven-year old autistic and cognitively-impaired is repeatedly abused in school by, both, teachers and security guards?
“Where’s the public outrage when two police officers, called to a day care centre in central Indiana to handle an unruly ten-year old, Tasered the child and slapped him in the mouth?
“Sadly, this is but a small sample of the ways in which children are being punished instead of educated in American schools.
“The suffering and hardship, that many children face in the United States have been greatly amplified by the economic crisis. And current statistics paint a bleak picture for the nation’s young people—1.5 million unemployed, which marks a 17-year high. 12.5 million without food and a number of unsettling reports, that indicate that the number of children living in poverty will rise to 17 million by the end of 2010. In what amounts to a national disgrace, one out of every five kids live in poverty. It gets worse.
Mark R. Rank, Ph.D. on Poverty in America
(c. 25:36) “Mark [Rudd] Rank, a sociologist at Washington University in Saint Louis reports that nearly half of all US children and 90%—90%!—of Black youngsters will be on food stamps at some point during their childhood, and that the fallout from the current recession could push these numbers even higher. An entire generation of youth will not have access to decent jobs, to material comforts, or the security available to previous generations. These children are a new generation of manchilds, who have to think, act, and talk like adults, worry about their families, which may be headed by a single parent, or two out of work, and searching for a job, wondering how they’re gonna get the money to buy food and what it will take to pay a doctor in case of illness.
“What does it say about a society, that can put trillions of dollars into two politically and ethically dubious and, likely, unwinnable wars, while offering generous tax cuts for the rich and bails out corrupt banks and insurance industries, but cannot provide a decent education and job training opportunities for the most disadvantaged youth?
(c. 26:45) “We can’t take 1/10th of what that war budget is for Afghanistan and for Iraq and build, for instance, completely rebuild the infrastructure of the schools in this country? We can’t do that? And the Republicans say that’ll drive the deficit right through the roof. (They’ve been drinking the wrong Kool-Aid.) I mean, if I remember correctly, they drove the deficit through the roof. They started the war in Iraq. And they gave away two trillion dollars away to the rich. (Hello? Are you still here?) But all of a sudden when we talk about using money for the social state, when we talk about using money to invest in people, when we talk about using money not to benefit the rich, when we talk about using money not to benefit the bankers and the insurance companies, when we talk about using money in ways that would expand the common good we hear it’s bad for the deficit. That’s not hypocrisy. It’s more than that. It’s criminal. It’s not simply an injustice. It’s degrading. It undermines democracy. And it doesn’t speak to what a democracy should be. I don’t recognise myself in that discourse and neither should America.”
C.S. Soong (c. 27:58): “That is Henry Giroux. And we have more portions of this talk to present to you. But this is, listener-sponsored, KPFA. […] Henry Giroux is Professor of English and Cultural Studies, at McMasters University in Ontario, and the author of many acclaimed books, including Against the Terror of Neoliberalism, Politics beyond the Age of Greed, […]
“Henry Giroux is one of the most important and influential thinkers on the Left. He has been called such. He’s an outspoken and passionate advocate for a democratic practice. He is an astute social critic. And, of the book we are offering, Against the Terror of Neoliberalism, one reviewer said, ‘Giroux thinks and writes with an unrelenting urgency rigor and clarity, that provides us with critical tools for thinking hard about the world.’ And another review said, ‘this book showcases why Henry Giroux is one of the most important and influential thinkers on the cultural Left. It makes an incontrovertible demonstration of the ways that education is at the centre of, both, how the forces of oppression gain ascendance and how the forces of dissent need to think about the future of opposition. […]
“Henry Giroux; he has so much to tell you about neoliberalism, about democracy, about ideology, about citizenship, about new forms of citizenship, about market fundamentalism, about casino capitalism, about speculation, about cultural consciousness. […]
“Henry Giroux is society’s teacher and conscience. And you can understand why someone would say that about him, which they did, based on what you’ve been hearing about the, sort of, the moral force and the dynamism, that undergirds everything that Giroux has to say. He’s a very effective speaker. He’s a passionate speaker. He’s a provocative speaker. He tells the truth. He speaks truth to power. And that’s what KPFA is all about. […]
“We return now to more of Henry Giroux, Professor at McMaster University, giving a talk at Eastern Michigan University.”
Dr. Henry Giroux (c. 34:36): “Punishment and fear have replaced compassion and social responsibility as the most important modalities mediating the relationship of youth to the larger social order. And as the War against Poverty is transformed into a War against Crime, young people are often subjected to intolerable conditions, that inflict irreparable harm on their minds and bodies. Many youth have to now endure drug tests, surveillance cameras, invasive monitoring, random searches, security forces in schools, and a host of other militarising and monitoring practices, typically used against suspected criminals, terrorists, and other groups represented as a so-called threat to the state.
(c. 35:25) “I mean there is a thoughtlessness in education, that has emerged with this emphasis on testing and stripped-down pedagogy and teacher-proof curriculums. This is an assault on teachers. It’s an assault on everything that is decent and basic about education. It’s an assault on creativity. It’s an assault on kids. And that method may be good for measuring the heights of trees, but it has nothing to do with education! Nothing. [Audience Applauds]
(c. 35:55) “You know we live in a country where we’ve confused training with education. We live in a country where we no longer understand education is providing the formative culture, that actually can enable people to become real engaged citizens, to look beyond themselves, to have some sense of community, to bring back words like social responsibility, democracy, sensitivity, moral values. And I’m not talking about Newt Gingrich. You know? I’m just talking about the formative culture, that makes democracy possible, that makes a culture of questioning possible, the kind of formative culture, that insures that each generation will fight for the very conditions, that gave it the opportunities to struggle in the first place.
(c. 36:50) “But, no, this is a country, that believes in short-term investments, quick profits, fast turnarounds. How about the language? Don’t you love the language? I now walk into universities and somebody says, ‘Oh, I want you to meet the head of the university. This is CEO Jones.’ [Audience Chuckles] CEO Jones? Do you remember when university presidents used to be intellectuals? None of you are old enough, are you? [Audience Laughs] Well, actually, they used to be intellectuals. They had ideas. You know? They took stands on important issues. They didn’t refer to faculty as the entrepreneurial vanguard in the war for, I don’t know, profits. They didn’t say your scholarship is worthless unless you write grants. [Audience Moans] They believed that people could cooperate with each other. There was a space to think. The notion that students mattered was somehow taken seriously. They actually had recess, art, gym. They did other things than prepare for tests.
(c. 38:00) “Schools mattered because there was a vocabulary that said they were a public right, rather than a private right. They were a public good and not simply a source of investment. I mean what happens when you turn over schools to these companies. Why shouldn’t they money go back into kids, rather than their coffers? Why shouldn’t the money go into hiring more teachers? Why shouldn’t the money go into putting lobbyists together who can go to Washington and say, ‘Hey, look, you really wanna in initiate reform in this country? Let’s make teachers the highest paid professionals in this country.’ [Audience Applauds]
(c. 38:38) “Let’s give them schools that count. Let’s talk about democracy, and the formative culture, and the infrastructure, and the economic resources, for the most part, that will allow it to flourish. But we don’t get that. You know? Instead we get Every Child Left Behind. [Audience Laughs] You know? And now we get Race to the Top and Jump off the Building. [Audience Laughs] Instead of getting wise, philosophical, in some way, understanding intellectuals, instead we get Arnie Duncan. [Audience Laughs] He doesn’t know if he’s on a basketball court or if he’s in a classroom. He can’t tell. He has no sense of what it means to link the language of democracy and the public good to schooling.
“And Obama is completely confused. Obama’s a lovely man, personally. But that doesn’t count. You judge Obama by his policies. And you judge his rhetoric next to his policies and his practices. [Audience Cheers, Applauds]
“And it seems to me, that if you’re gonna do that, you have to ask yourself, take three areas; in what ways is he expanding the discourse of democracy in his policies, expanding the possibilities for young people, and in what ways is he reclaiming those democratic values that are capable of criticising the very values that got us into this financial crisis and into this culture of greed in the first place. I give them a D, a D, on all three.
(c. 40:07) “First of all, we still have preventive detention. We still have military commissions. We still have state secrecy laws. We still have people being held in Afghanistan, who all of a sudden disappear.
“We have an educational policy at work, under [Obama’s] administration, that seems to me, is Bush-like. But actually it’s worse. It’s worse because, once he institutionalises these policies in a second administration, they’ll be more difficult to get rid of.
(40:31) “Let me just say three things, in summing this up. Look, when I say that the struggle of a language is central to the struggle of a politics, what I’m really arguing is that the struggle of a language and the struggle of a consciousness is what is central to schooling itself. And that is the struggle over agency.
“There are people who will say to you, schools are not political. But they are political because they decide, they intervene, they direct, they form, they produce, they engage, they set the setting for how students understand themselves, their relationship to other people, and the future. That’s political.
(c. 41:07) “The future we provide for young people, often, is provided in those schools. And it seems to me until we rethink what kind of language we wanna use and what kind of education we want, and what kind of future we want, we’re in big trouble. Schools have got to be seen as democratic public spheres, not as testing factories.
“Secondly, teachers are public intellectuals. That’s what they are. They are public intellectuals. They are people who work with ideas in public education and higher education. And to work with ideas and to be creative means you need autonomy. It means that education cannot be abstracted from questions of governance, from questions of power. We’ve got to get away from these hierarchically organised, top-down, CEO, neoliberal, market-driven, business oriented structures, that do nothing, but violence to people. They don’t work in schools. We don’t produce products. We create the possibilities for people to be in the world. That’s a different vocabulary. That shouldn’t be in the schools. [Audience Applauds]
(c. 42:17) “Thirdly, we need to find ways to finance schools, that are not tied to a set of class and racist policies, that allow kids to walk into schools and find themselves taking a dip in an Olympic swimming pool at lunch, while they carry their math computers around and other kids who are writing on toilet paper because they don’t have adequate resources to work. And then to say that those kids who failed because they don’t pass the test, they’re ultimately responsible for that and the teachers who teach them, ultimately, should be fired. That’s an injustice. [Audience Applauds]
(c. 43:02) “That leads people to believe that you can talk about excellence without talking about equity. And you can’t do it. You can’t do it.
“Fourthly, it seems to me, you need a social movement, in which questions of youth and their rights—one might say—become a reference point for organising people around building all those institutions, modes of community, and modes of interaction, in which kids could really have a future. National healthcare, excellent quality public education, a minimised war machine, right? To see money in the richest country in the world be put into children and not being put into drones.
“So, it seems to me once the dreamscape of democracy is illuminated, once we have a reference for linking it to that, once we see schools and teachers as absolutely central to that democratic vision, hopefully that’ll mobilise a different generation, your generation of young people, because it seems to me that these fights, they can’t be privatised. These are fights that are gonna have to be waged collectively, not alone. You don’t just go in the classroom and close your door. You don’t just go home and watch TV and say I’m sick of this stuff. I can’t stand it. You have to find ways to organise collectively because the future is too important to let it go, to turn it over to the Cheneys, to turn it over to the investment bankers, to turn it over to all those people who, for the most part, don’t even have an allegiance to the country anymore. They don’t even have an allegiance. They just go where the money goes.
(c. 44:47) “But on that note let’s hope, as Hannah Arendt once said, ‘These may be dark times, but the future is open.’ Thank you. [Audience Applauds]”
Transcript by Felipe Messina for Media Roots and Pacifica Radio
Photo by Flickr user Maistora
THE USA’S WAR ON KIDS
This particular speech by Dr. Giroux holds great value in its ability to encapsulate the myriad problems facing our society today. Dr. Giroux doesn’t hold back any punches, including devastating critique of Obama, stripping away the misguided false hopes of many progressives and activists, which, tragically, disable riled up generations of dissidents from being able to form a genuine opposition party. The failure of our great activist movements to recognise and denounce the wholly corrupt nature of the Democrat Party has been the failure of our great activist movements to seize political power.
The false left/right paradigm is a crucial concept for progressives to grapple with and overcome. This speech by Dr. Giroux helps shed light upon such critical questions of our time.
Did you know that “in 1998, the U.S. Supreme Court ruled that schools may censor student newspapers”?
Or that teachers and administrators are routinely allowed to bully students?
Or that in “1977, the U.S. Supreme Court ruled that due process is not required prior to physically beating a child as punishment in school?”
Or that one report found 97% of student suspensions per Zero-Tolerance policies initiated against weapons possessions did not involve weapons of any kind.
Striking facts like these are illuminated in the 2009 documentary film (now available online), in which Dr. Giroux, among others, is featured, The War on Kids. Students’ rights have always been vulnerable, but the ruling-class struggle against education has made vast strides. As Michael Haas, president of the Political Film Society, has noted, “only two nations have refused to sign the Convention on the Rights of the Child, Somalia and the United States.” The film exposes a wide range of police state repression being imposed upon our young and developing students at school. Many working-class parents are often too busy or disempowered to participate meaningfully in their kids’ lives within the school system machinery.
Film Trailer, The War on Kids
I’ll never forget driving past an Oakland school one morning and seeing innocent primary schoolers queud at a gate before entering a metal detector and submitting to invasive searches. We are really going down as a society, I thought. As if it wasn’t bad enough in my day.
The state, under Democrats and Republicans, has an often repressive grip on our young people within our schools, but parents aren’t empowered to participate. And PTAs are, unfortunately, something of a joke, as they are only designed to impose regressive taxes on themselves by going home and selling fundraisers to their own families, friends, and neighbours. So, what funds are raised by PTAs for schools come from the families and communities themselves. This amounts to further regressive taxation subsidising school budgetary deficits when working-class families are already taxed by the state, ostensibly, to honour the social contract, which includes quality public education.
Lacking adequate advocacy, our students are too often mired in schools increasingly modelled after prisons, which means, of course, our children are increasingly being viewed by school officials as prisoners. And as school officials’ criteria for running afoul of Zero-Tolerance policies becomes broader and vaguer, school staff are increasingly deferring disciplinary authority to cops being called into schools.
Stratford High School in South Carolina made global news in 2003 when the world was given a glimpse of what schools are like when police state terrorism ossifies into the norm. Stratford High in Goose Creek, SC, became an example of schools as prisons. Anne Brick, a staff attorney with ACLU, observed:
“The problem with what happened in Goose Creek or the use of drug-sniffing dogs in schools, in general, is (a) it creates a police state atmosphere in the school, no matter how cute and cudly those dogs may be. And, second, it teaches kids the wrong lesson. It teaches them that you are guilty until proven innocent.We are going to assume that all of you have drugs. And, therefore, we need to bring these drug-sniffing dogs—instead of requiring schools to have reasonable suspicion that a particular student has broken school rules or broken the law. And then engage in that sort of intrusive search.
“And there’s a third thing, by the way, that’s wrong with these drug-sniffing dogs. And that is they have a really high false positive rate. So, often, the dogs will alert and then the student is subjected to a very intrusive search, somebody’s going through their backpack, they have to empty their pockets, their car is searched. When in fact, the dog alerted to the kid’s bologna sandwich.”
“If students go to school in an atmosphere, in which school officials get to control what they read, what they say, and what they can put in their school newspaper, they’re going to grow up thinking, ‘Well, gee, that’s the way it is.’ And when they become adults and government tries to control what they read, what they say, or what they put in their newspaper, they’re going to shrug their shoulders and say, ‘Well, that’s the way it is.’
“And that’s how we lose our freedom.”
Laurie A. Couture, M.Ed. is author of Instead of Medicating and Punishing:
“Public schooling is the antithesis to democracy. We live in a democratic society. Our society is built on freedoms and personal liberties.
“And, yet, it’s like we take our children and we lock them up in a prison for 13 years of their life. And we regiment every aspect of their physical bodies, of their emotions, of their social contacts, and, most importantly, their minds—what they can and can’t learn, and how they learn it.
“And then when they’re 18 years old and we open the key and we release them into society, suddenly, they are now supposed to know how to think for themselves and be self-starting, innovative, creative, imaginative individuals, who are supposed to take part in a democratic process. It’s impossible! It’d be like sending the kids over to a fascist nation for 13 years and having them come back and explain what democracy is all about. And, yet, that’s what we do each and every generation since compulsory schooling was instituted in the 1800s.”
Morgan Emrich, a public school teacher, notes:
“The curriculum comes down, now, from the state. That was different 20, 25 years ago when I was a kid. Now it’s decided by the state. And, in there, you will not find anything that is critical of governments, of institutions—and I teach history.”
John Taylor Gatto is an author and NYC, NY State Teacherof the Year:
“If you wanted to simplistically say what is the one purpose of schooling, it’s to psychologically indoctrinate into their proper social class their proper relation to authority. They’re laboratories of psychological indoctrination. Everything else is trivial.”
“Children don’t have any say in being able to debate the validity of the curriculum. They can’t say, ‘you know what, teacher? I heard otherwise. Or, ‘you know what? This is my opinion. Or, ‘this is my thought.’ Or, ‘wait a minute. I read a book, that told me something different.’ If you do that, you know—I’ll see you after school, mister. Your name is on the board. One more outburst like that and you’re mine after school today.”
“Kids are burned out on having their minds force fed facts all the time and being told what they have to do and what they should be doing and never having it asked of them, what are your opinions, what are your curiosities, what are your hopes, dreams, needs, wants?”
“That’s what marks the War on Kids,” says Dr. Giroux. “I think that what’s taking place is that we have an educational discourse, that’s become dominant in shaping our traditional policies and practices that’s really about controlling kids, rather than investing in them, that’s real about containing them, rather than supporting them. And it’s really about making them silent and drugging them, rather than listening to them.
“When any form of behaviour, that isn’t utterly adaptive, is now treated with a medical prescription or viewed as a police infraction, clearly, something has tipped over. Right? I mean we’ve crossed some kind of line where the only way in which we could deal with students is to either treat their problems like a medical problem or to treat their problems as a criminal practice.”