CNBC, the top U.S. business news channel, is running propaganda ads in support of unbridled capitalism, including a 1979 clip of right-wing economist Milton Friedman besting talk show host Phil Donahue in a debate over the merits of greed.
“The great achievements of civilization have not come from government bureaus,” Friedman declared, citing Albert Einstein’s theory of relativity and Henry Ford’s development of the assembly line.
Yet, Friedman leaves out other accomplishments – from the Declaration of Independence and U.S. Constitution to engineering marvels like the Golden Gate Bridge, Panama Canal, the U.S. Interstate highway system and Netherlands’ dikes – that did emanate from “government bureaus.”
Going back centuries, you could add in the Acropolis of Athens, the Pyramids of Egypt, the ceiling of the Sistine Chapel and many of the world’s great works of architecture and art sponsored by government patrons.
More to the point today, you could note that many of the world’s recent achievements resulted from a collaboration of government investment and private industry, like advancement of computer science driven by the U.S. space program or the Internet, originally a Pentagon research project.
However, in Friedman’s view – as embraced by CNBC – human progress derives primarily from the greed of capitalists.
“In the only cases in which the masses have escaped from the kind of grinding poverty you’re talking about, the only cases in recorded history, are where they have had capitalism and largely free trade,” Friedman told Donahue.
“So the record of history is absolutely crystal clear that there is no alternative way so far discovered of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by a free enterprise system.” [See the full exchange below.]
Since Friedman made his comments in 1979, you could note other recent developments in countries such as China that employ some tenets of capitalism but mixed with a rigid political system that falls far short of “free trade” and “free enterprise.”
Yet, CNBC apparently believes Friedman’s comments are as true today as they were in 1979 – that unrestrained capitalism lifts all boats, not just for the rich but for average folks, too. However, the historical record is much more nuanced and complicated than that.
Laissez-faire capitalism has been tried for centuries and – on its own – has consistently failed to improve the lot of ordinary people. Indeed, it has proven to be a cruel and disorderly method of organizing a society, prone to boom-and-bust cycles, environmental degradation, massive swindles, scandalous industrial accidents, and a bleak existence for most workers.
The lesson was most painfully learned in the United States when the vast income disparities of the Gilded Age contributed to the Stock Market Crash of 1929 and the Great Depression.
New Deal Reforms
President Franklin Roosevelt’s New Deal response – to address the worst abuses of capitalism and to permit labor organizing as a means of empowering working people – proved to be a successful approach to balancing the energy of the market with society’s broader needs. Indeed, the resulting growth of a middle class made even the rich richer.
It turned out that a well-regulated capitalism, combined with smart investments in the public sector and a unionized work force, was a reasonable model for society, certainly not without its flaws and requiring constant adjustments but functional and profitable.
However, the rich and their acolytes again demonstrated that greed could be its own worst enemy. Instead of building on the lessons of the New Deal, they saw an opening in the late 1970s – as oil price shocks and other adversities staggered the economy – to smash the social covenant of the New Deal.
The Friedman-Donahue exchange came at just that moment with a resurgent Right pushing Ronald Reagan as its champion, with his message of “government is the problem.”
The rest, as they say, is history. Reagan’s anti-government mantra became the dominant message of the era amplified by a growing right-wing media that propagandized the public. Over the next three decades, propelled by Reagan’s strategy of massive tax cuts for the rich and hostility to unions, the rich got richer, while the poor and middle class stagnated, struggled and sank.
Under this pro-market “group think,” to even suggest that the government could contribute something positive would engender smirks and derision. [For more, see Consortiumnews.com’s “Reagan’s 30-Year Time Bombs.”]
This pattern continued, largely unbroken, until the Wall Street meltdown in 2008. Suddenly, the geniuses who had promoted the theory of “self-regulating markets” were stuck with massive losses in exotic subprime investments. A toxic blend of greed and gullibility threatened to take down the world economy.
Yet, without so much as a blush, Wall Street turned to the hated “guv-mint” and demanded bailouts for the banks and other key parts of the financial system. Between loans and giveaways from Washington and the Federal Reserve, trillions of dollars in public monies refloated a veritable regatta of Wall Street’s yachts; the modest boats of the average folks, not so much.
At CNBC, the “free-market-is-God” anchors – the likes of Larry Kudlow and Michelle Caruso-Cabrera – behaved as if nothing had happened to rattle their world. Their devotion to the Market didn’t miss a beat. It was as if the meltdown had never occurred.
Most of the TV talking heads on CNBC seemed to live in a parallel reality where the teachings of Milton Friedman remained indisputable.
Aid to Average Folks
When CNBC personalities did get riled up about “guv-mint bailouts,” it was usually when there was some suggestion that Washington might help the average folks who lost their jobs due to the crash and whose homes had fallen into foreclosure.
In February 2009, less than a month after Barack Obama had taken office, CNBC reporter Rick Santelli – speaking from the trading floor of the Chicago commodities exchange – fumed about Obama’s plan to help up to nine million Americans avoid foreclosure.
Santelli suggested that Obama get public feedback on whether “we really want to subsidize the losers’ mortgages.” Then, gesturing to the wealthy traders in the pit, Santelli declared, “this is America” and asked “how many of you people want to pay for your neighbor’s mortgage that has an extra bathroom and can’t pay their bills, raise their hand.”
Amid a cacophony of boos aimed at Obama’s housing plan, Santelli turned back to the camera and said, “President Obama, are you listening?”
Though Santelli’s behavior in a different context – say, a denunciation of George W. Bush near the start of his presidency – would surely have resulted in a suspension or firing, Santelli’s anti-Obama rant was hailed as “the Chicago tea party,” made Santelli an instant hero across right-wing talk radio, and was featured proudly on NBC’s Nightly News.
More than two years later, little has changed at CNBC.
Now that the bailouts of Wall Street have returned the banks to profitability – and opened the penthouse doors to more multi-million-dollar bonuses for top executives – CNBC sees no contradiction between its fawning devotion to the “free market” and the market’s abject failure to succeed on its own.
In a further testament to the power of cognitive dissonance, CNBC is now presenting to its viewers a three-decade-old video of the Right’s financial guru besting a liberal talk show host as proof that the infallibility of the “free market” still cannot be denied.
[For more on these topics, see Robert Parry’s Lost History and Secrecy & Privilege, which are now available with Neck Deep, in a three-book set for the discount price of only $29. For details, click here.]
Robert Parry broke many of the Iran-Contra stories in the 1980s for the Associated Press and Newsweek. His latest book, Neck Deep: The Disastrous Presidency of George W. Bush, was written with two of his sons, Sam and Nat, and can be ordered at neckdeepbook.com. His two previous books, Secrecy & Privilege: The Rise of the Bush Dynasty from Watergate to Iraq and Lost History: Contras, Cocaine, the Press & 'Project Truth' are also available there.
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