The soul of the settler state

"Among the most powerful and persistent of all the myths that Americans invoke about themselves is the myth that America is a chosen nation and that its citizens constitute a chosen people," writes religion professor Richard T. Hughes in Myths America Lives By.

The combination of democracy and religion is a potent one. When thousands of Puritans, fleeing persecution in their native England, founded New England in the early 17th century, it allowed them scope to develop their culture unfettered in a way that they could not in England. Pious, righteous and self-absorbed, they saw themselves as a new Israel, a chosen nation, in covenant with God.

Unfortunately, when the chosen nation needs to push other people aside to establish its heavenly kingdom, the results are neither pretty nor Godly. The Puritans faith defined the native inhabitants of New England as heathens who could be destroyed with impunity. From their massacre of the Pequots in 1637 to the genocidal King Philip's War in 1675, the Puritans showed their native neighbors more steel and lead than humanity.

The birth of New England as a settler state had profound consequences for America, as I have previously written. The expropriation of native lands provided the material basis for the growth and prosperity of the colonies. The pattern of driving off and killing the native peoples which continued for the next three centuries was justified by a racist worldview that it is (white) Americans who deserve the land, who have a manifest destiny, who are modern and advanced. This worldview is derived from Puritanism, but it is alive and well today. John Judis traces the impact of the "chosen nation" thesis on American foreign policy, and particularly on the George W. Bush administration.

The Thanksgiving myth captures the identity of the settler state. The Indians join with the Pilgrims and teach them how to hunt American turkeys and cultivate American crops such as corn and pumpkins. Yet we know, even as we contemplate the peaceful Thanksgiving scene, that it is the Pilgrims, not the Indians, who are chosen to rule; it was those who came on the Mayflower whose descendants are in charge, while the Wampanoag stubbornly assert that they are still here.

So it is with Israel today. Fleeing the Holocaust, they migrated to Palestine; rising up in 1947, they expelled most of the Arabs and formed their state. Unlike the Puritans, most of the founders were not religious; but like them, many Israelis today do look to a Biblical covenant to justify their claim to the land. And the state of Israel has always behaved with the self-righteousness of the chosen.

The First Parish Unitarian Universalist Church in Bedford, Massachusetts, heir to the Puritan tradition, recently presented Jerusalem: East Side Story, a film about the tactics used by Israel to dispossess and drive Palestinians out of East Jerusalem. The Israeli settler state uses residence permits, home demolition, innumerable checkpoints, and the Wall, to divide, harrass, and intimidate Palestinians in the hope that they will leave the holy city. They hope that the Palestinians will scatter like the Wampanoags and Pequots before them. But the East Jerusalem Palestinians, though pushed seemingly beyond endurance, are hanging on for dear life, they do not move, and they do not leave. The film is available for $25 and it is a great educational tool.

The just struggle of the people of East Jerusalem to preserve their life, land, and nationhood in the face of the settler state deserves our support. 30 or 40 modern New Englanders came out on a cold night last week to express that support. And, as filmmaker Mohammed Alatar reminded them at the film screening, it is U.S. aid of $10 million a day which allows Israel to build its settler state. The American chosen nation is spending freely to aid the Israeli one, despite its continual violation of U.N. resolutions calling for the neutrality of Jerusalem. Unless Americans cut off the aid, Alatar said, Israel will not stop.

Discussion of nationalizing GM

In the last few days, multiple commentators are starting to explore the idea of nationalizing GM, or setting up a structure with significant government control over it, instead of bailing out its owners with a loan. Some excerpts:

Bob Herbert, NY Times columnist: "This whole matter needs some intensive thought. At the moment, Washington has tremendous leverage over the failing auto industry. The government should craft a rescue plan that is both tough and very, very smart. That means dragging the industry (kicking and screaming, no doubt) into the 21st century by insisting on ironclad commitments to design and develop vehicles that make sense economically and that serve the nation’s long-term energy security requirements."

Jeffrey Sachs, Columbia University economist: "A government-supported restructuring of the auto industry is urgently needed for our economic and energy security....[T]his is an opportunity to embark on a major industry restructuring to position the United States to lead the world in producing cars that get 100 miles or more per gallon."

Dan Bertolet, hugeasscity: "We should nationalize GM. Because we need a revolutionary change in motorized transportation, and we need it now. And because the free market is not up to the task."

35 authors, Soot and Ashes: Reinventing America After the Crash: "Should the United States nationalize or bail out GM, Ford and Chrysler?" Some say yes to nationalization, others no.

Carl Bloice, Rx for 'Ailing' Auto Industry: Take it Over. "So, what is to the done about the ailing auto industry? Here's one answer: nationalize it.... let's face it; radical innovation and planning is the only thing that could get us out of the current mess and lay the base for a healthy economic future. "

Nationalize auto

The drive is on to bail out General Motors. With US sales down 33% this year and the automaker hinting that it may face bankruptcy before the end of the year, Nancy Pelosi and Harry Reid are proposing a $25 billion bailout of the Big Three automakers, GM, Ford, and Chrysler, and the Obama team has signaled its support.

The Big Three and their suppliers, dealers, and related industries employ as many as three million workers, many unionized and located in the heartland states around Michigan and Ohio. The United Auto Workers supports the bailout, arguing that the wage and benefit concessions in the 2007 labor contract make the automakers competitive, but for the current economic slump. Non-union Honda, Toyota and VW auto factories in the South also account for a significant share of U.S. vehicle production.

Everyone claims they do not want to see the auto industry liquidated. The right proposes to let GM file for Chapter 11 bankruptcy, and Chris Dodd said this afternoon that the Senate doesn't have the votes to pass the bailout in the lame-duck session due to Republican opposition. Rightists reason that it would then drive for further concessions from the UAW, disciplining labor and shrinking the unionized share of the industry. However, many commentators are saying that customers would not buy cars from a manufacturer in bankruptcy, fearing that the warranty may not be honored or parts and service would not be available. Unfortunately, the same is likely to be true of the Democrats' plan, giving life support to preserve the current failing companies a little longer.

To keep the industry moving and preserve jobs, I propose nationalization as an alternative to bankruptcy and bailout. For its $25 billion, the government would acquire all the equity in GM and Ford, which together are worth a mere $6.1 billion, plus a negotiated price for the privately owned Chrysler, and still have most of the money left over to invest in retooling their operations. The government's commitment to run the auto companies will eliminate any doubts that they are going concerns.

This move is also smart politics for the Democrats. With a "Buy Green - Buy American" sticker on every car and a PR message on the importance of preserving union jobs, working class voters will support the move, and the Democrats will buy themselves a lock on the heartland vote for a generation, picking a great issue to rebut the right's free enterprise fury.

The national auto company will be a formidable enterprise. The UAW will participate in managing the business. The government would merge the three companies into one to eliminate waste, then shift the industry strongly towards green, fuel efficient designs. Partnerships will be set up with the national research labs and NSF to move innovative products quickly to market. The government would use its stake in the banks to ensure that credit is available to auto purchasers.

There is nothing far-fetched about this plan, except to American free market fundamentalists and their Democratic lap dogs. Renault was a state enterprise for 50 years from 1946 to 1996 and the French government still owns a 15% share of it; it is the leading brand in Europe and in alliance with Nissan it is now the world's fourth largest automaker. Nationalization of industries that their capitalist owners have run into the ground is in the interests of the workers, the taxpayers, the economy, and the environment. Nationalization is not socialism, but it is a step towards economic stability and away from the free market extremism that has created the current crisis.

What kind of stimulus?

President-Elect Obama stated at his press conference yesterday that passing an economic stimulus package is his top priority, providing for “immediate efforts to create jobs and provide relief… a further extension of unemployment insurance benefits… [and] jump-start economic growth”. Keynesian doctrine, favored by liberal and moderate economists, calls for fighting recessions by putting money in the pockets of people who will spend it, thereby increasing sales and, indirectly, employment. Te figure of $100 billion has been mentioned for these purposes, although it is unresolved whether the package will be passed by a lame-duck Congressional session or wait until the new term begins in January because of Bush administration opposition.

However, everyone knows that $100 billion is a drop in the bucket compared to the hole the U.S. economy is in. Last spring’s $150 billion stimulus, which came in the form of tax rebates, did little to improve the economy, which was not nearly in such bad shape than as it is now. The reason for the modest size of the current plans is that the Obama team’s real economic decisions still lie ahead.

Arthur MacEwan, U. Mass professor and author of the “Dr. Dollar” column in Dollars and Sense , pointed in a talk last night to the confusions already being spread in the mainstream media about the economic options open to the new administration. With a trillion dollar budget deficit already expected in 2009 due to the Wall Street bailout on top of the Bush tax cuts and war spending, can Obama carry through on his campaign promises to expand health care, education, green energy, and cut the taxes on the working class? MacEwan pointed out that these projects will stimulate the economy as much or more than the short-term spending usually included in so-called stimulus packages.

When Wall Street needs a bailout, the government quickly found $85 billion for AIG, $200 billion for Fannie Mae, and $750 billion for the banks. But when the people’s needs call for spending, the conventional wisdom counterposes long-term economic improvement projects to anti-recession spending.

In fact, mainstream economists have often acknowledged that so-called stimulus spending is often ineffective. It may come too late to impact the recession, or people may save it or use it pay off debts rather than spend it, as was the case this spring. The same is true for the bank bailout, much of which is being spent on multi-million bonuses for executives and on acquiring smaller banks, rather than on new lending as promised by the bailout’s promoters.

The most effective thing the government can do to improve the economy, as MacEwan pointed out, is to provide support for the working class. Education and job training, health care, housing programs, infrastructure projects, retooling the energy sector, and increases in the minimum wage, can be enacted fast enough to have an impact in 2009. They will also bring permanent benefits by reducing inequality and strengthening the class which underpins consumption in the economy – the working class. Even a mainstream economist should be able to get behind that. Obama reaffirmed support for several of these projects in his press conference. However, the candidates being mentioned for Treasury secretary, Sommers, Volker, and Geithner, are not likely to agree. Judging from their records, they will support only temporary deficit spending and not long-term commitments, and they will increasingly emphasize deficit hawkishness in opposition to Obama's program if and when the recession appears to bottom out.

The government acquired an ownership stake in the banks during the bailout, but Treasury Sec. Paulson promised not to use it, specifying the stock cannot be voted. The Obama administration can reverse this policy, take the seats on the boards which the taxpayer money entitles it to, and direct Wall Street to invest in the long-term projects that Obama says he supports. Similarly, as part of the auto industry bailout which is coming, the government should take an ownership share in the auto companies. It can then directly supervise the long-term investments needed to make fundamental improvements in the economy. In addition to getting a better economic result, use of the economic instruments the taxpayers have paid for will begin to change the ideological climate and begin to prove that free-market fundamentalism is not the only long term route to prosperity.