KEVIN PHILLIPS AND PETER DRUCKER

Along with such writers as Bill Moyers, Paul
Krugman and Peter Drucker, Kevin Phillips
remains one our most important social ana-
lysts. His 1990 book, The Politics of Rich and
Poor is the decisive summary of the grim con-
sequences of the Reagan years. Those conse-
quences, for the working poor, are drama-
tized and illustrated by the valuable personal
experiences reported in Nickle and Dimed, by
Barbara Ehrenreich.

Now Phillips has a new book out, Bad Money:
Reckless Finance, Failed Politics, and the
Global Crisis of American Capitalism. There is
a good recap of his central thesis in an op-ed by
him in the 5/27/08 Oregonian. It is titled: "The
End Game of American Ascendancy?" In this
recap he writes (in part): "In the United States,
the financial services sector passed manufactu-
ring as a component of the GDP in the mid-1990s.
But market enthusiasm seems to have blocked
any debate over this worrying change: In the
1970s, manufacturing occupied 25 per cent of
GDP and financial services just 12 per cent, but
by 2003-06, finance enjoyed 20 per cent to 21
per cent and manufacturing had shriveled to
12 per cent.

The downside is that the final four or five per-
centage points of financial-sector GDP in the
1990s and 2000s involved mischief and self-
dealing: the exotic mortgage boom, the reck-
less bundling of loans into securities and
other innovations better left to casinos. Run-
amok credit was the lubricant. Between 1987
and 2007, total debt in the United States
jumped from $11 trillion to $48 trillion, and
private financial-sector debt led the great
binge.

Washington looked kindly on the financial-
sector throughout the 1980s and 1990s,
providing it with endless liquidity flows and
bailouts. Inexcusably, movers and shakers
such as Greenspan, former treasury secre-
tary Robert Rubin and the current secretary,
Henry Paulson, refused to regulate the in-
dustry."

Follows is a letter to the editor of the Ore-
gonian that I wrote in response to Phillips'
op-ed quoted above: "Lack of regulation
described by Kevin Phillips ("The End Game
of American Ascendancy?") that allowed
casino-type gambling with our economy was
noted 15 years ago by Peter Drucker in Post-
Capitalist Society: "We have no social, politi-
cal, or economic theory that fits what has al-
ready become reality," he wrote. He was re-
ferring to the transition (then well-along)
from finance capitalism to what he called
"pension-fund capitalism."

Seeing that the bulk of corporate stock is now
owned by pension funds and institutional
investors, he also recognized that: "Pension-
fund capitalism is also capitalism without
'capital.' The money of the pension funds
(PFs)---and their siblings, the mutual funds ---
does not fit any known definition of capital;
and this is not just a matter of semantics.
Actually, the funds of the PFs are deferred
wages (as in the case of PERS). They are being
accumulated to provide the equivalent of wage
income to people who no longer work. . .In
pension fund capitalism the wage earners
finance their own employment by dererring
part of their wages. Wage earners are the
main beneficiaries of the earnings of capital
and of capital gains."

But when these are risked recklessly, without
effective regulation at all, we courting the kind
of disaster that Phillips warned of so ably. There
is a lack of needed regulation because there is
little understanding of what is actually happening.
And in fact, finance capitalism is obsolete, along
with its myths and shattered theories, as Drucker
has explained. We need a top-to-bottom re-
assessment of corporate structures, functions
and responsibilities, before it's too late!

THE DAILY IRAN DISTRACTION

Our press keeps parroting the nonsense
spouted by Iran's pres. Ahmadinejad as if
he is actually their national leader (he isn't),
and makes Iran's foreign policy (he doesn't).
The Supreme Leader in Iran is Ayatollah Ali
Khamenie, and he has never uttered threats
to Israel or anyone else, as far as I know.

The Council on Foreign Relations makes
foreign policy in Iran, and Ahmadinejad has
little influence on it, according to the chairman.
He exercises no control on the military. His
main area of responsibility is domestic policy,
where he is in trouble, and widely unpopular.
McBush are misleading us when they give any
relevance to the rantings of this toothless tiger!
Obama should be pointing this out.

The Iranian president is popular in the Muslim
world (MW) because of his much publicized
rants against Israel and the U. S. I googled
"Ahmadinejad's threats" and couldn't find any.
If you search his prayers & predictions, he
wants God "to wipe Israel off the map" and
asks God to do so, and predicts God will, in
fact, do it. But as far as I can discover, he
never actually says he will do the job. That's
probably because he doesn't have any power
to do such a thing, and knows it.

His denial of the Holocaust is, of course, an
indisputable and horrendous lie that must be
totally rejected, deplored and rebuked. But it is
a lie that is popular in the MW because of
Israel's continuing atrocities and terrorism vs.
the Palestinians. These criminal acts began
(and were started by) the Zionists in the 1940s.
(See Wikipedia on the early history of Israel,
Irgun, the Stern Gang, etc.) The West defended
anything done by the Zionists, using the Holo-
caust as an excuse and a free pass. That's what
makes some Muslims try to wish away the Holo-
caust, and makes Ahmadinejad popular for
denying it. Iran is trying to gain recognition
and influence in the MW which is 85% Sunni,
and has always looked askance at the Shia as
of questionable legitimacy as good Muslims.

We can, and should, stop Israel's brutal, illegal
occupation of Palestine anytime we want to by
stopping the $3 billion plus we are giving them
each year (over 100 billion in the past 50 yrs.)
They use that money to fund new illegal "settle-
ments" in the West Bank. That requires ethnic
cleansing of the natives that were already there.
(The term "settlements" implies that the land
was unoccupied, unused before, like the Ameri-
can west was supposed to be).

Over 8 million Palestinians have been forced
from their lands and their homes. We must join
the U. N. and the rest of the world in demanding
that Israel keep its many agreements to get out
of the small piece of Palestine that's left to these
Arab peoples.

There will be no Hamas and no Hizbollah when
that is done, as both exist as understandable and
legitimate resistance to Israeli crimes, and have
no other purpose or reason for being. The same
is true to a large extent for most of bin Laden's
support in the MW. It will vanish overnight. As
bin Laden has vowed: "The West will not know
peace until the Palestinians have peace." God
speed that day!

ABOUT WEST VIRGINIA

Yes, Hillary has become expert, after living in
Arkansas, at faking a hillbilly manner and
skill in relating to the humble folk, of which
she, of course, is hardly one. Plus the good
people of the mountain state loved Bill, and
still do. The vote for her was as much for
him as it was for her.

It's also the case that West Virginians tend to
be suspicious of "furiners." As one admitted,
"I don't want nothing to do with no Hussein."
I lived in W. Virginia for ten years, and was
seen as a stranger until I shed my New York
license plates. They are good people, the salt
of the earth. Sadly, the state's best days are
behind it. Unemployment is high, and the
young folks are leaving. The ageing population
lives in the past. Obama is about the future.
They didn't get it. Nor did he. He could have
spent more time there, but it wouldn't have
changed the basic mind-set. Anyway, it's all
academic.

HILLARY FOR V. P.?

Of course she's highly qualified, but a curse
comes with that diamond! His name is Bill.
Can you imagine trying to govern with that
talented pair retaining much of the leadership
and influence in the Democratic party? And
working tirelessly to add to it? It would be a
kind of co-presidency. Or perhaps a troika,
if you can imagine such a thing! Remember,
she's not giving up on seeking the top job.

WRIGHT IS (MOSTLY) RIGHT, SO ATTACK
THE MESSENGER INSTEAD OF THE
MESSAGE

Rev. Wright's basic point, which is missed in
all the bruhaha, is that the country is morally
bankrupt. You can object to his language (as
do I), and you can reject specific charges (the
aids accusation.) But these flaws in his long
list of national sins do not negate in any way
his overall message.

The main fury against the reverend is really
because he exposes the true American
religion for what it is: idolatry. It's the wor-
ship of man-made myths and symbols (flags,
lapel pins, fake cowboys). A key falsehood
of the national mythology is our basic good-
ness, as God's favorites. So Rev. Wright re-
minds us of the genocide and stolen land
that gave us our start, and the slave trade
that bankrolled our early industry and the
resulting stolen labor that built it. These
are not popular subjects for discussion. I
have written previously at length about
the American (false) religion and its idola-
tries.

Yes, we have properly celebrated heroes
like Washington (a slaver) and Lincoln (a
racist) and Davie Crockett. The latter sacri-
ficed a promising political career by strongly
opposing the act by the U. S. Congress to
forcibly "remove" the Cherokee Nation of
some 17,000 people from their homes in
Georgia to "Indian territory" in Oklahoma.
The Cherokees had become Christians,
built schools and churches, developed a
written language and published their own
newspaper, but it didn't matter. The good
people of Georgia lusted for their land, so
they had to go on the "Trail of Tears," where
at least 4,000 perished in transit under the
care of the U. S. Army. You can read about
it in Wikipedia.

Now we are aiding and abetting Israel in its
similar program of native removal from the
holy land. Most of the Palestinians (some
three or four million) have by now been
driven totally out of their land, and live in
refugee camps in surrounding lands. The
million plus left in Gaza are basically
prisoners, fenced in and destitute. It's just
a reservation, like we maintained for our
Western "Indians." With our help ($3 bill.+
each year) Israel illegally occupies the West
Bank with about as many soldiers as we
(also illegally) have busy destroying Iraq.
(If you doubt that last, see Naomi Klein:
The Shock Doctine: The Rise of Disaster
Capitalism.)

The Israelis have bull-dozed more than
10,000 Palestinian homes, and chain-sawed
most of their olive and citrus orchards, just
as the U. S. Cavalry once slaughterd the
Indians' buffalo, so they would starve. Israel
clearly has no interest in peace, and never
has had, except the kind of peace we now
have, on our terms, with native Americans.
When Palestinians take up arms to resist the
occupation and destruction of their land, they
of course become "terrorists," worthy only of
more sever punishment if that is possible.

Be assured, the Muslim world holds us re-
sponsible along with Israel for the crimes and
atrocities committed daily there. And yes, alas,
Rev. Wright is right again, this was a major
cause, if not the chief one for Muslim anger
that led to 9/11. It's not acceptable in this
country to refer to it as "chickens coming home
to roost," because that sounds as if it was
justified, which it can't be, but nevertheless
that is the way it is viewed in much of the
Muslim world, and much of Europe as well.
Rev. Wright was explaining, not justifying 9/11.
If you think the Rev. is deranged, you might
want to consult Noam Chomsky, who has been
called, by the the New York Times " America's
leading intellectual." He has written numerous
books detailing in a scholarly way our long and
current history of using, backing, teaching and
practising terrorism and torture. Not a pretty
picture, but an accurate one, and well docu-
mented. Chomsky has a book on 9/11, by the
way, named just that: 9/11.