Americans stand at a critical moment in history. Do we follow the Founders and say that we want a government of, by, and for We the People, or do we follow the cons and choose a government of, by, and for inherited wealth and the elite of a corporatocracy?
We don't need to speculate about the outcome of either choice for the middle class. History, past and present, offers a clear answer.
Compare the stories of two presidents. Both went to war against what they called an "evil empire." Both won the military battle-at least enough to declare victory. Both were then faced with an enemy whose country was completely ruined. Both promised to help the people in that country pick up the pieces and rebuild their societies.
President A was Harry S. Truman, who created the Marshall Plan for Europe and helped rebuild Japan after World War II. President B is George W. Bush, who is busily privatizing Iraq.
When George W. Bush started bombing Iraq, he told the world that his undeclared war, Operation Iraqi Freedom (originally named Operation Iraqi Liberation until a reporter noticed the unfortunate acronym), was going to be waged as much for the Iraqi people as against Saddam Hussein.
We're helping to rebuild Iraq, where the dictator built palaces for himself, instead of hospitals and schools. And we will stand with the new leaders of Iraq as they establish a government of, by, and for the Iraqi people. The transition from dictatorship to democracy will take time, but it is worth every effort. Our coalition will stay until our work is done. Then we will leave, and we will leave behind a free Iraq.What Bush proposed was his own version of a Marshall Plan, named after Truman's secretary of state, George Marshall. The original Marshall Plan gave money to the governments of all the European countries affected by World War II so that they could import necessary materials and rebuild their country's industries. (The Soviet Union forbade the countries under its control from taking any of the $6 billion in funds allocated, so the rebuilding in Europe was limited to the western countries.)
One of Truman's aims in creating the Marshall Plan was to prove how important government is in creating a middle class. He had had trouble passing reforms that would help the middle class in the United States. In 1947, for example, congressional Republicans shot down Truman's proposal for a national single-payer health-care plan that would cover every American, and they weakened union protections by passing-over Truman's unsuccessful veto-the Taft-Hartley Act. In part to show Americans that national health care and a strongly unionized workforce would help build a strong middle class, Truman encouraged Germany and Japan to incorporate these concepts into their new constitutions. Both did, and the results were impressive.
With the Iraq war, however, the cons saw an opportunity to prove Truman-and his embrace of government-wrong. They'd take a country with a protected economy, a strong public sector, high taxes on business, and national health care and turn it into a cons' paradise.
In 2003, L. Paul Bremer III, then the head of the Coalition Provisional Authority, the U.S. de facto government of Iraq, issued Order 37, which dropped Iraq's corporate income tax from more than 40 percent to a 15 percent flat tax. His Order 39 allowed multinational corporations to enter Iraq, buy up formerly Iraqi companies, fire all their Iraqi employees if they chose, and even take 100 percent of their profits out of the country. He fired a half million public employees, including teachers, doctors, and nurses, to pave the way for complete privatization of the education and health-care sectors. He approved a law banning unions and outlawing collective bargaining in most business sectors. As Naomi Klein noted in an article for Harper's, Bremer said: "Getting inefficient state enterprises into private hands is essential for Iraq's economic recovery."1
The foundational con theory is that selfishness is the fundamental human urge, that the greed arising from it will motivate people to go into business, and that those businesses will then-to maximize their profits-meet all the needs of the people. With all human needs thus met, there is no need for government, other than perhaps to operate an army and a police department.
So instead of giving Iraqis money or loans so that they could rebuild their own country, Bush instead gave the money to Halliburton, Bechtel, Fluor, and a few other large, politically connected multinational corporations. He rewrote the Iraqi constitution (in violation of international law) to turn Iraq into the world's largest free-trade zone. He nearly perfectly followed the script of the World Bank and other conservative corporatist institutions, administering "shock therapy" to the Iraqi economy. Iraq was, the cons believed, the perfect opportunity to prove the cons' belief that the corporatocracy will provide for the common good and outshine Harry Truman's "liberal Democratic" successes in Germany, Japan, and the rest of western Europe.
So, how well has privatization gone in Iraq? Almost three years after Bush's undeclared war began, an article by the Observer tells the story:
More than a quarter of total US funds have been swallowed up by security, and in many parts of the country, even the most basic facilities are still missing. "Government is not functioning in so many sectors," says Oliver Burch of Christian Aid, which has several partner organisations working across Iraq.The story continues.
"The health budget for last year was $1 billion, but out in the provinces, doctors in hospitals and clinics are appealing to everyone they can find, because they can't get the place painted; they can't get the toilet fixed; they can't get basic drugs." He said his partner-organisations feared corruption was partly to blame. "We think it's horrendously large in scale."
Another problem is the gradual withdrawal of food aid. More than half of the families in Iraq still receive a monthly food parcel of basic supplies. Oliver Burch says this legacy of the oil-for-food programme in the long years of sanctions is expensive, and distorts the market. "Farmers aren't growing wheat, because there's no market for it," he says. In fact, Iraq's infrastructure appears to be in a worse condition that it was before the war. For example, the electricity supply is still around 4,000 megawatts, about the prewar level. On average there is 12 hours of supply a day. Meanwhile oil production is 1.1 million barrels a day, below prewar levels.The Guardian tells us that the actual cost to the American people of the war in Iraq is going to top $2 trillion. And yet the Iraqi people still experience severe shortages of food, electricity, and health care.
And it's not just the Iraqi people who've gotten screwed. The American taxpayers have footed most of the bill for this failed con demonstration project.