Tuesday, October 30, 2012

The Virtual Recovery

Since mid-2009 the US has been enjoying a virtual recovery courtesy of a rigged inflation measure that understates inflation. The financial Presstitutes spoon out the government’s propaganda that prices are rising less than 2%. But anyone who purchases food, fuel, medical care or anything else knows that low inflation is no more real that Saddam Hussein’s weapons of mass destruction or Gadhafi’s alleged attacks on Libyan protesters or Iran’s nuclear weapons. Everything is a lie to serve the power-brokers.
During the Clinton administration, Republican economists pushed through a change in the way the CPI is measured in order to save money by depriving Social Security retirees of their cost-of-living adjustment. Previously, the CPI measured the change in the cost of a constant standard of living. The new measure assumes that consumers adjust to price increases by lowering their standard of living by substituting lower quality, lower priced items. If the price, for example, of New York strip steak goes up, consumers are assumed to substitute the lower quality round steak. In other words, the new measure of inflation keeps inflation down by reflecting a lowered standard of living.
Statistician John Williams (shadowstats.com), who closely follows the collecting and reporting of official US economic statistics, reports that consumer inflation, as measured by the 1990 official government methodology has been running at about 5%. If the 1980 official methodology for measuring the CPI is used, John Williams reports that the current rate of US inflation is about 9%.
The 9% figure is more consistent with people’s experience in grocery stores.
Officially the recession that began in 2007 ended in June 2009 after 18 months, making the Bush Recession the longest recession since World War II. However, John Williams says that the recession has not ended. He says that only the GDP reporting, distorted by an erroneous measurement of inflation, shows a recovery. Other, more reliable measures of economic activity, show no recovery.
Williams reports that the economy began turning down in 2006, falling lower in 2008 and 2009, and bottom-bouncing ever since. Not only is there no sign of any recovery, but “the economic downturn now is intensifying once again.” The absence of an economic recovery “is evident in the [official] reporting of nearly all major economic series. Not one of these series shows a pattern of activity that confirms the recovery [shown] in the GDP series.”
Williams concludes that “the official recovery simply is a statistical illusion created by the government’s use of understated inflation in deflating the GDP.” In other words, the reported gains in GDP are accounted for by price increases, not increases in real output.
The result of the US government’s economic deception is the same as the deception Washington has used to start wars all over the Middle East. The government propaganda produces a make-believe virtual reality that bears no relationship to real reality. In history there have been many governments who have prevailed by deceiving the people, but Washington has moved this success to a new peak. As long as Americans believe anything Washington says, they are doomed.
It is easy to see why there is no economic recovery and cannot be an economic recovery. Look at the chart below (courtesy of John Williams, shadowstats.com).
Real median household income at the end of 2011 is back where it was in 1967-68. Moreover, Williams has deflated household income to get its real value by using the official inflation measure, which substantially understates inflation. If Williams had used the 1990 or 1980 official government methodology for calculating the consumer price index, the real median incomes of households would show a larger decline.
Moreover, the low 2011 real median household income is the summation, in most cases, of two household earners, whereas in 1967-68 one earner could produce the same real income. As Nobel economist Gary Becker, my former colleague as Business Week columnist, pointed out, when both husband and wife have to work in order to maintain the same purchasing power, household income from the wife’s in-kind household services is eliminated. Therefore, the monetary measure of the dual household income overstates income, because it is not adjusted for the lost benefits formerly provided by the wife who at home managed the household.
Americans are far more oppressed by the power brokers in Washington than statistics display. Moreover, the young are born into the oppressive, exploitative American system and do not know any different. They are fed by the Presstitute media with endless propaganda about how fortunate they are and how indispensable their wonderful country is. Americans are kept in a constant state of amusement, and many never grasp the loss of their civil liberties, job and career opportunities, and respect that the US won during the decades-long cold war with Soviet Communism.
On September 13, Federal Reserve Chairman Ben “Helicopter” Bernanke announced Quantitative Easing 3. Bernanke said that the recovery is weak and needs more Fed stimulus. He said the Fed will purchase $40 billion of mortgage bonds per month in order to drive interest rates further below the rate of inflation and help to sell more houses.
But how do you sell houses to households who are getting by with 1967-68 levels of real income and who have absolutely no job security? Their company can be taken over and offshored tomorrow or they can be replaced by foreign workers on H-1B visas. Housing prices have dropped, but not to 1967-68 levels.
Bernanke’s announcement that the Fed’s purchase of mortgage bonds is to spur housing and the economy is disinformation. Bernanke is purchasing the bonds in order to boost the values of the derivatives and debt instruments in the banks’ portfolios. Lower interest rates raise the value of the debt instruments on the banks’ balance sheets. By depriving American savers of a real interest rate on their savings, Bernanke makes the busted banks look solvent.
This is what is happening in “freedom and democracy” America. The vast majority of Americans, especially the retired, are forced to consume their savings and draw down their capital because they can get no real interest on their savings. The beneficiaries are the banksters, who can borrow at near zero interest rates, charge consumers 16% on their credit cards, and use the Federal Reserve’s largess to speculate on interest rate swaps and credit default swaps. The American taxpayers hold the bag for the banksters’ uncovered gambles.
Would you not gamble if the American taxpayers had to cover your bets, but your winnings were yours alone?
The future of the American political order is in doubt. The Bush and Obama regimes have so badly abused the Constitution and statutory law, that the America that Ronald Reagan left to us no longer exists. America is on the path to collapse or tyranny.
Suppose that a miracle produces an economic recovery. What becomes of the enormous excess bank reserves that the Federal Reserve has provided the banks?
If these bank reserves are used for expanding loans, the money supply will outstrip the production of goods and services, and inflation will rise.
If the Fed tries to take the excess reserves out of the banking system by selling bonds, interest rates will rise, thus destroying the wealth of bond holders and draining liquidity from the stock market. In other words, another depression that wipes out the remaining American wealth.
The Federal Reserve’s announcement of QE3 shows that the Fed will continue to create new money in order to protect the values of the insolvent banks’ questionable assets. The Federal Reserve represents the banksters, not the American public. Like every other American government institution, the Federal Reserve is far removed from concerns about American citizens.
In my opinion, the Federal Reserve’s purchase of bonds in order to drive down interest rates has produced a bond market bubble that is larger than the real estate and derivative bubbles. Economically, it is nonsensical for a bond to carry a negative real interest rate, especially when the government issuing the bond is running large budget deficits that it seems unable to reduce and when the central bank is monetizing the debt.
The bubble has been protected by the euro “crisis,” which possibly is more of a virtual crisis than a real one. The euro crisis has caused money to seek refuge in dollars, thus supporting the dollar’s value even while the Federal Reserve prints money with which to purchase the never-ending flow of the governments’ bonds to finance trillion dollar plus annual budget deficits–about 5 times the “Reagan deficits” that Wall Street alleged would wreck the US economy.
Indeed, the US dollar’s exchange value is itself a bubble waiting to pop. The sharp rise in the dollar price of gold and silver since 2003 indicates a flight from the US dollar. (The chart is courtesy of John Williams, shadowstats.com.)
The bond market bubble will pop if the dollar bubble pops. The Federal Reserve can sustain the bond market bubble by purchasing bonds, and there are no limits on the Federal Reserve’s ability to purchase bonds. However, the endless monetization of debt, even if the new money is stuck in the banks and does not find its way into the economy, can spook foreign holders of dollar-denominated assets.
Foreign central banks can decide that they want to hold fewer dollars and more precious metals as their reserves. Other countries, sensing the US dollar’s demise,
are organizing to conduct their trade without the use of the world’s reserve currency. Brazil, Russia, India, China, and South Africa intend to conduct their trade with one another in their own currencies. China and Japan have also negotiated to settle their trade balances with one another in their own currencies.
These agreements substantially reduce the use of the US dollar in international trade and, thus, the demand for dollars. When demand falls, so does price, unless the supply shrinks. But the Federal Reserve has announced, essentially, unlimited supply of US dollars. So we are faced with a paradox. The US dollar is supposed to remain valuable despite its enormous increase in supply.
In addition, China, America’s largest creditor and in the past a reliable purchaser of US Treasury bonds, holds some two trillion in dollar-denominated assets, primarily Treasury bonds. How is Washington treating its largest foreign creditor? Not with appreciation or deference. Washington is surrounding China with naval and air bases, interfering in China’s disputes with other countries, and bringing contrived actions against China in the World Trade Organization. Washington claims that US corporations are deserting the US not because of the lower cost of labor in China, but because of Chinese “subsidies” to the relocated US firms.
In my April 30 column, “Brewing a Conflict with China,” I wrote that Washington would like to substitute a cold war with China for the hot wars in the Middle East. The problem with the hot wars is the loss of superpower face from Washington’s inability to prevail after eleven years, and although the hot wars are profitable for the military/security complex, the wars don’t generate the level of profits that would flow from a high-tech arms race with China. Moreover, Washington believes that diverting Chinese investment from the economy into a military buildup would slow the rate at which the Chinese economy is overtaking the US economy.
What if instead of taking the bait from Washington, China targets Washington’s Archilles heel–the dollar’s role as reserve currency–and decides it is cheaper to dump one trillion dollars of US Treasury debt on the bond market than to commit to a 30 year arms race? To keep the price of Treasuries from collapsing, the Federal Reserve could print the money to buy the bonds. But if China then dumps the printed one trillion dollars in the foreign exchange markets, Washington cannot print euros, British pounds, Russian rubles, Swiss francs, and other currencies in order to buy up the dollars.
Frantic, Washington would try to arrange currency swaps with foreign countries in order to acquire the foreign exchange with which to buy up the dollars that, otherwise, will drive down the dollar exchange rate and destroy the Federal Reserve’s control over interest rates.
But if the Chinese don’t want the dollars, will other countries want to swap their currencies for the abandoned US dollar?
Some of Washington’s puppet states will comply, but the wider world will rejoice in the termination of Washington’s financial hegemony and refuse the offer.
Sooner or later the dollar will collapse from Washington’s abuse of the dollar’s role as reserve currency, and the dollar will lose its “safe haven” status. US inflation will rise, and US political stability, along with America’s hegemonic power, will wane.
The rest of the world will sigh with relief. And China will have defeated the superpower without an arms race or firing a shot.

How Ronald Reagan, J. Egdar Hoover, and the FBI Plotted to Crush 1960s Dissidents

The FBI's greatest secret: its hidden war against Berkeley’s student radicals and the alliance between Reagan and Hoover.

Berkeley in the years that I came of age was heady with the scent of night jasmine and tear gas. It whipsawed, sometimes violently, between clichés, from the Age of Aquarius to the Age of Apocalypse and back. I well recall the evening in February 1969 when hundreds of us, exhausted from a day of battling cops seeking to break the Third World Liberation Strike at the University of California’s campus, trooped down to the Berkeley Community Theatre, where we hoped to find relief in the much-ballyhooed provocations of Julian Beck and Judith Malina’s Living Theatre.
Much to our surprise, the production of Paradise Now was a bust. What was an outrage to bourgeois sensibilities elsewhere—nearly nude members of the troupe intoning mantras of prohibition against smoking pot and sexing it up in public—was greeted by the solemn radicals and spirited anarchists of Berkeley as feeble and largely empty gestures. “Super Joel,” one of the town’s more colorful and ubiquitous characters, stood up and loudly denounced Beck and Malina for their faux-radicalism, then lit a joint and began to disrobe. Others quickly followed. Hundreds surrounded the couple, angrily demanding that their tickets be refunded. Dozens of debates erupted all around—over the nature of drama and the character of revolution. The show did not go on. The audience stormed the stage. Finally, at midnight, the fire marshals arrived and kicked us out. Beck and Malina had inadvertently achieved what had previously eluded them: goading the audience into taking collective action, seizing the moment, arguing over whether to remain passive spectators or become actors in a drama of their own making. It was unforgettable. I also remember the denouement: no sooner had the Living Theatre departed than, the next day, a furious Governor Reagan arrived and threatened to deploy the National Guard, in addition to the hundreds of police from throughout Northern California that filled the streets.
Bedazzled as we were by the spectacle of our own high ideals and the intoxications of making history, we perhaps might be forgiven for mistaking the theater in the streets as the main event, while failing to tumble to another high drama taking place, as it were, offstage. We were deaf, alas, to the malign fugue that was being played within the inner circles of the old order. It is the welcome and signal contribution of Seth Rosenfeld’s important, if flawed, tome Subversives to provide a necessary threnody to an era whose many tumults and contradictions still lie buried beneath a carapace of cliché. Rosenfeld, a former longtime, prize-winning investigative reporter for the San Francisco Chronicle, aspires to tell how, in one small American hamlet whose recalcitrant students had won for it an outsize international reputation as a magnetic pole of rebellion, the state waged a two-front struggle—one open and without apology, and the other often invisible and illegal—to stamp out opponents, real and imagined, to its rule.
Berkeley called itself the “Athens of the West,” a moniker meant to summon its origins and promise as the mid-nineteenth-century site of the fabled first campus of the University of California. The conceit suggested the agora of ancient Greece, where citizens would freely debate the issues of the day and Socratic dialogues would occur about the meaning and purpose of life. Educating citizens to build and manage the expanding American imperium was at the center of this great project, born of the lofty ambitions of California progressivism. This publicly funded university and its eight (now nine) other campuses throughout the state, which any qualified high school student could attend for a paltry annual cost, were the pride of California. The University of California had, by almost any measure, quickly joined the ranks of the private Ivy League institutions that had dominated the higher tiers of elite American education. Its students counted themselves among America’s best and brightest. They were also renowned for their political activism. Robert McNamara would remember, with not a little nostalgia, the protests he participated in as an undergraduate during the 1930s—protests he would have occasion to recall decades later when, as a principal architect of the Vietnam War, he would be condemned as a war criminal by students at his alma mater (and not only there).
From the militant longshoremen’s strikes and upheavals of the Great Depression through efforts by Communist spies in the late 1940s and ’50s to steal the nation’s atomic secrets at Berkeley’s Lawrence Radiation Laboratory, to the forcing of loyalty oaths upon the campus’s professoriat, Berkeley—and San Francisco, too—had long been regarded by the grim men in Sacramento and Washington as swamps of subversion. For years, J. Edgar Hoover and his Federal Bureau of Investigation had sought to drain them of suspected traitors. By the mid-1960s, the FBI’s San Francisco Bay Area offices boasted several hundred agents. Hoover’s obsessions would keep the hive humming.
* * *
The Bay Area was engulfed by multiple and successive student protests. The most notable included the anti-HUAC protests of 1960; the great civil rights sit-ins of the spring of 1964 at the Sheraton-Palace Hotel in San Francisco, along with the Auto Row demonstrations seeking an end to racial discrimination, which began in late 1963 and continued through the spring of 1964; the Free Speech Movement in the fall of 1964, followed by the nation’s first Vietnam teach-in, organized by the Vietnam Day Committee in May 1965; and, three months later, the efforts to prevent the passage of troop trains through Berkeley. Then came the founding of the Black Panther Party in 1966 and the riotous anti-draft demonstrations in Oakland in 1967, culminating in the violent suppression of People’s Park protesters in May 1969, which saw the death of one onlooker and the blinding of another by shotgun-wielding Alameda County deputy sheriffs, the indiscriminate gassing of the campus by a National Guard helicopter, the imposition of martial law and the month-long occupation of the entire city by thousands of armed troops. These traumatic irruptions form the epic backdrop to Subversives.
It is Rosenfeld’s achievement, after a twenty-seven-year legal battle, to have compelled the FBI to make public some 300,000 pages of its secret files—files the bureau was so loath to see the light of day that it spent more than $1 million of the taxpayers’ money to prevent their release. Those documents would provide, Rosenfeld hoped, the Rosetta stone that would crack the bureau’s greatest secret: the record of its hidden war against Berkeley’s student radicals and the heretofore unacknowledged alliance between Reagan and Hoover. And indeed, Rosenfeld’s labors help to deepen our understanding of those years of hope and rage.
The story is, at first blush, straightforward: a tale of dirty high jinks pursued by a rogue institution—the FBI—dominated by an aging despot at its helm, unwilling to let go the delusions that had so successfully made him one of America’s most powerful and feared men. Rosenfeld builds his narrative around four figures: Mario Savio, the brilliant and emotionally tormented avatar of the Free Speech Movement; Clark Kerr, the hapless liberal anticommunist head of UC Berkeley, much reviled as a soulless toady by the students whose protests he ineffectively sought to contain (for which services he would incur the enduring enmity of his minders); Ronald Reagan, the demagogic former actor whose landslide election in 1966 as California’s governor would later catapult him into the White House; and J. Edgar Hoover, the notorious scourge of all things pinko, who had long worked to enlist Reagan’s vaulting political ambitions and willing acquiescence in Hoover’s crusade against communism. It is through their interactions that Rosenfeld weaves the threads he has teased out from the welter of FBI documents.
What embarrassments did the bureau so desperately want to conceal? According to Rosenfeld, the documents detail the extraordinary lengths—often duplicitous and sometimes criminal—that Hoover and his men went to in their decades-long effort to demonize and marginalize citizens suspected to be of an oppositional bent. The trove, writes Rosenfeld, “is the most complete record of FBI activities at any college ever released. The documents reveal that FBI agents amassed dossiers on hundreds of students and professors and on members of the [university’s] Board of Regents; established informers within student groups, the faculty, and the highest levels of the university’s administration; and gathered intelligence from wiretaps, mail openings, and searches of Berkeley homes and offices in the dead of night.” More: “FBI documents show that bureau officials misled a president by sending the White House information the bureau knew to be false; mounted a covert campaign to manipulate public opinion about campus events and embarrass university officials; collaborated with the head of the CIA to harass students; ran a secret program to fire professors whose political views were deemed unacceptable.” Rosenfeld claims that “These documents show that during the Cold War, FBI officials sought to change the course of history by secretly interceding in events, manipulating public opinion, and taking sides in partisan politics.”
This isn’t exactly news. Can anyone at this late date, after the COINTELPRO revelations and Church Committee reports of the mid-1970s, and numerous other subsequent journalistic scoops of government skulduggery over the past four decades, affect to be shocked? Almost everything we had long suspected turns out to be true, only more so. Were telephones tapped? Routinely. Were agents provocateurs planted? Every chance the government got. Rosenfeld reveals, for example, that one of the early and influential members of the Black Panther Party—not unexpectedly one of the few who knew most about how to use guns—was very likely a longtime government informant. But is anyone other than Bobby Seale, who publicly praised the man as a stalwart hero of the revolution on the occasion of his funeral several years ago, entirely surprised?
* * *
Rosenfeld has spent too long in the archives. Entranced by pages upon pages of redacted documents, redolent of the patina of official authority, he has made a category error, regarding as holy writ the effluvia of careerists and spies while remaining largely blind to the multiple and often self-serving agendas at work by the documents’ dirty tricksters. Assessing these desiccated documents requires caution. Weighing statements and testimonies as evidence of the actual beliefs and practices of the alleged “subversives” under surveillance demands a nearly forensic care. Conspiracy is a rare commodity, much sought after by true believers. The FBI rarely found it among those that the bureau deemed enemies or potential enemies of the state; but neither is conspiracy in the precincts of the powerful to be much found among these often inherently dubious documents. Instead, what they evidence is mostly blunder and unintentional comedy. Rosenfeld’s often admirable dedication to flushing out the darker designs of the powerful renders him insufficiently attentive to other, arguably more significant, factors. Irony isn’t his strong suit.
A single example makes the point. A few years after the bureau established its Berkeley office in 1957, two senior agents secreted themselves in the crawlspace beneath the floorboards of the aristo ex-Communist Jessica Mitford and her husband Bob Treuhaft’s Oakland home, keen to collect any pearls of subversion that could be gleaned from the meeting of comrades taking place above their heads. But so dull was the gathering that one agent dozed off and began to snore, panicking his partner—and so, fearing discovery, they fled. Another agent, Rosenfeld informs us, after spending hours tapping Mitford’s phone, learned only that Decca’s preferred toothpaste was Ipana. Such, such were the goods.
Hoover, infamously, had made a fetish of finding Communists under every bed. His agents strained to tell him what they thought he wanted to hear. Often they could not. When in doubt, they tried to fail upward. What surprises is how often their dutiful investigations and wiretaps forced the more honest of the G-men to confess that, try as they might to catch them, actual Communists were elusive game, members of an endangered species. The suspicion gradually arose within the bureau’s ranks that by the late ’50s and early ’60s, they were largely a phantom of Hoover’s perfervid imagination, a thick gumbo whose ingredients were spiced in the early years of his efforts to break the back of radical strivings, out of which he had made his bones and to which he would remain unswervingly if stupidly loyal.
In 1968, for example, Hoover ordered his men to use every means to “neutralize” several of the more prominent leaders of the Bay Area New Left. The head of his San Francisco office pushed back, patiently pointing out that none of Hoover’s targets (which included Savio and Robert Scheer, an editor of the radical slick Ramparts, closely affiliated with the New Left) were “members of any known subversive organizations…. They are independent free thinkers and do not appear to be answerable to any one person or any group or organization.” Hoover was undeterred. He believed that the stigma of bureau investigation would be sufficient to frighten his targets into submission. After all, such tactics had worked on an earlier generation of radicals. Now, however, they were all but useless. The new radicals didn’t remotely resemble the cautious Communists he was used to intimidating. Jerry Rubin could never be mistaken for Gus Hall. They didn’t want society’s traditional jobs and spurned its blandishments. The culture had slipped Hoover’s grasp. But still he was convinced that by planting stories with compliant reporters exposing such radicals’ allegedly aberrant lifestyles, he could tarnish their public reputation. His man in San Francisco knew better, telling Hoover, “They are not embarrassed by this coverage. In fact, they seem to enjoy it and thrive on it.” Hoover refused to listen. He ratcheted up his efforts. Surveillance programs proliferated. Secret budgets ballooned. But little worked as intended. If the war on radicals was, at least in Hoover’s head, a war without end, it was a war largely without significant result, as Rosenfeld inadvertently makes clear.
A story, possibly apocryphal, that Rosenfeld doesn’t include contains a larger dollop of truth than the hundreds of thousands of FBI documents that he insists reveal government conspiracies run amok. It was a favorite of Warren Hinckle, the author of If You Have a Lemon, Make Lemonade (1974), his unjustly neglected memoir of his years presiding over Ramparts. The bureau was beside itself with the exposés the magazine regularly published, in particular by Scheer, Hinckle’s comrade-in-muckraking. And so it came to pass that the magazine’s North Beach lair was burglarized. Suspicion was strong that Hoover’s men were responsible. Scheer was possessed of a mind as startlingly lucid as his desk was invariably disheveled, covered with a mad shambles of telephone numbers and notes scrawled higgledy-piggledy on the backs of envelopes and scraps of paper. His “runic scribble,” as Hinckle called it, was the bane of the magazine’s copy editors. And so it proved to Hoover’s black-bag men, who were unable to decipher Scheer’s poison penmanship. Hoover’s FBI, increasingly irrelevant, was more and more a spent force.
* * *
Rosenfeld seems not to understand this, however, convinced that he’s found in these documents a veritable Pentagon Papers. Rosenfeld argues that the FBI’s refusal to give up its secrets was rooted in a desire to keep hidden its decades-long effort to bend and often to break the law in pursuit of suspected “subversives,” fearing that revelation of its misdeeds might arouse the public’s ire. Another, more compelling reason suggests itself: on the evidence of the Everest of documents that the bureau sought to conceal, what Hoover and his successors were at pains to cover up was its thoroughgoing incompetence. As the bureau knew, few “subversives” were there to be found. Far from the model of a modern and relentlessly efficient intelligence-gathering machine, Hoover had instead created a massive and costly bureaucracy whose actual workings reveal an astonishing gap between its fearsome public image and its shabby, inept inner reality. What these hundreds of thousands of FBI documents show is how little the bureau actually accomplished for all its fevered exertions.
Rosenfeld thinks the tale he’s telling is one of unbridled abuse of government power seeking by hook or by crook to dislodge and demolish a corpuscular and burgeoning movement of discontent. And it is, up to a point. The more sinister drama, however, is the one that unfolds in the shadow play of the backstage efforts to get rid of Kerr, deemed by establishment figures to his right to be no longer trustworthy: naïve at best and an unwitting, pusillanimous comsymp at worst. Kerr’s sin was to have betrayed his class—an even greater crime, as far as his overseers were concerned, than the obstreperous bleatings of a young upstart like Savio. Suspicious of his Quaker convictions, his fieldwork as a young graduate student studying the plight of striking farmworkers in the ’30s in the harvests of sorrow that formed California’s San Joaquin Valley, and his years as a labor negotiator, Kerr’s critics within the corporate boardrooms and private clubs to which the men who ran the state belonged assiduously sought his ouster. He was, they felt, invertebrate. Harder, more ruthless and more cynical men were needed. With Hoover’s connivance, they plotted Kerr’s removal. They were confident that the ever-pliant Reagan would do their bidding. After all, he always had, as Hoover had known ever since Reagan’s stoolie days for the bureau, when the second-rate star, as head of the Screen Actors Guild during Hollywood’s long night of redbaiting, yearned for Hoover’s recognition and approbation. The FBI documents on this count are convincing. When the fateful day came, just weeks after Reagan’s inauguration, Kerr was stunned. His sacking, he recalled, felt “like a whip across my face.”
Though it is heresy to say so, Kerr was, in a strange way, Savio’s doppelgänger. Who doesn’t remember Savio’s imperishable exhortation, one of the most eloquent remarks ever made in the history of modern American radicalism, uttered extemporaneously at the height of the Free Speech Movement:
There is a time when the operation of the machine becomes so odious, makes you so sick at heart, that you can’t take part, you can’t even passively take part; and you’ve got to put your bodies upon the gears and upon the wheels, upon the levers, upon all the apparatus and you’ve got to make it stop. And you’ve got to indicate to the people who run it, to the people who own it, that unless you’re free, the machine will be prevented from working at all!
One wonders whether this striking bit of oratory may have evoked in Savio’s nemesis a sense of déjà vu, for it recalled the spirit and almost the very words of Kerr’s own profound distress more than thirty years before at seeing a pregnant mother and her ailing infant evicted from a one-room hovel in Pasadena. The sight had filled him with a barely contained anger. He knew to do the right thing. In an anecdote he all but buries, Rosenfeld tells how Kerr, in his own words, had joined with others to “break the law and move the family back in” by smashing the lock that police had placed on the shack’s door to bar their return. As Kerr later wrote to his father, “This country has come to a place where one must break the law in order to insure that the people may have the privilege of ‘life, liberty and the pursuit of happiness.’” Kerr never entirely succeeded at ridding himself of the bleeding-heart cells that fitfully coursed through his veins, though he spent years trying. His masters, however, were experts at sniffing out such misplaced sympathies.
Kerr is Rosenfeld’s most tragic and misunderstood figure. One wishes that Subversives had made more of this dimension of the drama and explored the larger implications of Kerr’s unhappy end. His ouster as president of the University of California was the new governor’s first real political victory—a victory initially applauded by Savio and his comrades, who had come to detest Kerr nearly as much as did Hoover and Reagan. Kerr’s firing was a body blow to the hallowed and heretofore largely sacrosanct notion that the university and its campus ought properly to be a protected zone of discourse, free of state intervention. It was a principle that Kerr had fought to uphold. His defeat would have lasting consequences and was a rare victory for Hoover, whose machinations were often ineffective where they weren’t counterproductive.
* * *
Did the bureau, despite its legal, extra-legal and often criminal manipulations, actually bend history’s arrow? For all its provocations, did it really derail or significantly disrupt the New Left? Did it truly succeed in putting the kibosh on student protest? Was it an important factor in propelling Reagan to the pinnacle of power—a summit to which he somehow might not, on the strength of his own political genius, have risen?
The answer, contre Rosenfeld, is no. The FBI’s antics were a sideshow. The main drama was elsewhere. The war against radical students was, in several crucial respects, something like the thirteenth-century war against the Cathars, when the Catholic Church persistently denounced heresy in repeated inquisitions and crusades seeking to identify and stamp out beliefs that departed from the true religion. These persecutions were often campaigns of convenience against imagined communities of opposition. Often they masked rivalries within the Church that rent the outwardly coherent fabric of elite power. A similar dynamic seems to have animated Hoover and the FBI, Reagan and his henchmen. Their fiercest combat was as much against radical zealots as it was against reformers within their own ranks, against honorable do-gooders like Clark Kerr. Of course, cudgeling students played well with a public who saw Savio and his cohorts as little more than petulant brats who ought no longer to be indulged by hard-working taxpayers. The strategy worked, and so began the successful effort to return an unruly campus to the more controlling orbit of the state—and, ultimately, to launch the long counterrevolution to undo the achievements of the New Deal.
As for the wounds suffered by the New Left, they were largely self-inflicted. Did the FBI seek to take advantage of our weaknesses, to exploit our missteps, and to use our naïveté as a noose by which to hang an entire movement? Sure it did. Rosenfeld adds nuance and appalling detail to a familiar story of suppression: police attacks on peaceful demonstrators, the secret (and often successful) efforts to encourage extremism in order to isolate dissenters, and the open campaign to crush resistance by wielding the state’s powerful legal truncheon, thus draining the left’s always meager treasury and depriving it of its most able leaders. Such tactics encouraged the politics of paranoia. The result, as Christopher Lasch so clearly understood, “imprisoned the left in a politics of theater, of dramatic gestures, of style without substance—a mirror image of the politics of unreality which it should have been the purpose of the left to unmask.” But we did not need Hoover’s hooligans to prompt us to embrace the terrible logic of politics as a total art form. We came all on our own to believe that only by increasingly provocative spectacle could the veil of public apathy be pierced. It is we who elevated extremism to the level of strategy. It was a dialectic of defeat.

Exploding Five Myths that Dehumanize the Poor

If you believe that poverty is the domain of the comfortably poor, black, unemployed, unmotivated and uneducated among us, you have been sadly misled. Prepare to be astonished by numbers that tell a very different story.
You're in the grocery store checkout aisle. Time to cash out. You pull out your food-stamp EBT card. You're overcome with a sense shame one feels for being broke in a world that measures self-worth according to net-worth.
You hide the card behind your bank debit card - the one that has nearly nothing in it - and try to act natural as you slide it through the machine. "Cash or Food," it asks. You hit food. No one in the aisle with you is the wiser. But the cashier knows. You wonder if he's now scrutinizing your food purchases. If he's so poor how can he afford organic tomatoes? (After all, pesticides only harm the wealthy!) But at least the people behind you aren't in on it.
"OK, the balance is $10.99," the cashier says. You forgot about the laundry detergent. Now you've been outed to everyone. "He's buying this stuff with our money," you imagine people around you thinking.
People who feel the shame-inducing scrutiny of many judgmental Americans aren't paranoid. When the subject of welfare is brought up in my classrooms, many students immediately talk about people they see cheating the system. Whether the people they have in mind really are cheating the system or not, poor people are routinely conceptually linked with those of the lowest common denominator: lazy, stupid, cheats.
The Silenced, Closeted Poor
In 2010 the Census Bureau reported that 1 in 6 Americans (15 percent) are poor, a rate that was held steady in 2011.1 Even these statistics disguise the real poverty numbers. A sampling of the existing poverty thresholds - boundaries separating the officially "poor" from the "non-poor" - are as follows: $11,704 for one-person households where the adult is under 65; $10,788 for those where the adult is over 65; $15,504 for households with one adult and a child; $18,106 for two adults and one child; $22,811 for two adults and two children; $30,056 for two adults and 4 children.
1. The Bootstrap Myth
Negative assertions about the poor are in part a product of the American bootstrap myth: Anyone who works hard enough in America will have a great life. And if you don't have a great life, then you lack the will, integrity or intelligence to succeed. These kinds of concepts are what the late Australian philosopher Val Plumwood called "conceptual weapons." They work together to structure a system of thought that distorts, oversimplifies and ultimately fosters ignorance about, and shame amongst, oppressed groups of people.
2. The Poor Are Unemployed
The bootstrap myth works together with the stereotype that all poor people are unemployed. This thinking gives rise to the conclusion that the best way to address poverty is to get everyone a job. But these fallacious assertions gloss over the glaring fact that many poor people are working. The Census reported that, in 2010, 7 percent of those aged 16 and older who worked some or all of the year were in poverty.[3] And the Department of Agriculture reported that 30 percent of households receiving food assistance had earnings in 2010; 41 percent of food aid beneficiaries lived in a household with earnings from a job.[4] Nearly a quarter - 21.8 percent - of non-elderly adult food stamp recipients were employed.[5]
Of course none of this is surprising to those who know from experience what it means to work for $8 an hour. Working for 40 hours a week at that rate yields a $17,000 annual salary. Increasingly these poverty-level-wage jobs (retail, fast-food, etc.) are the most abundantly available to Americans. But with so many people out of work, even those jobs are hard to come by. And just as being poor is a source of shame for many Americans, so is being out of work, or working a low-end, thus devalued, job.
Who on earth doesn't know that many working people are poor precisely because of poverty-level wages from a job? In the January 23, 2012 Republican primary debate in Tampa, Florida, Mitt Romney touted his work creating "middle-income" jobs through his companies, like Sports Authority and Staples.
We helped start Staples, for instance. It employs 90,000 people. These are middle-income people. There are entry-level jobs, too. I'm proud of the fact that we helped people around the country - Bright Horizons children centers, the Sports Authority, Steel Dynamics, a new steel company. These employ people, middle-income people.
In a September interview, Mitt Romney responded to ABC News host George Stephanopoulos's question, "Is $100,000 middle income," with the reply: "No, middle income is $200,000 to $250,000 or less."[6]
Putting these assertions together, one must ask: How many workers at Sports Authority and Staples are actually earning more than $100,000, let alone $200,000 to $250,000? The reality, as so many retail workers know all too well, is that the majority of employees at these companies earn poverty-level wages, and only a relative few climb into the ranks of management and even begin to approach this mythical "middle-income" status.[7]
Some will say Romney's ignorance about the poor is unique. Think again: On January 5, 2012, then-Republican presidential candidate Newt Gingrich blended racist and classist stereotyping, when he told an audience that he believes "the African-American community should demand paychecks and not be satisfied with food stamps."
A few days earlier, on January 1, rival candidate, Rick Santorum had said that he did not "want to make black people's lives better by giving them somebody else's money; I want to give them the opportunity to go out and earn the money. And provide for themselves and their families."[8] Both of these men's statements contain the logical implication that those receiving food assistance are not working.
3. Poor (i.e. lazy, uneducated etc.) Equals Black
You'll notice that Gingrich and Santorum exclusively concentrate on the black community's reception of food assistance. This not-so-subtle message is that black people are getting by on white America's dime. But the fact of the matter is that about 1 in 7 Americans arereceiving food assistance,[9] and most of them are white: 35.7 percent of head of households receiving food aid are white, 22 percent are African-American, and 10 percent are Hispanic.[10]
This shows how racist and classist ideologies work together. Black and other people of color continue to be used as a symbol of impoverishment and all of its wretchedness: lazy, selfish, crude, ignorant, animalistic and so forth. Ben Adler writes that:
Veteran South Carolina politicos readily agree, off the record of course, that Gingrich is intentionally tapping into this long vein of racial animosity. In the years since the Civil Rights Act, white South Carolinians may have largely ceased pining for the days of segregated water fountains. And anyway no politician can call for returning to them. But they often resent African-Americans and social welfare programs that they view through a racial lens.[11]
When politicians start declaring that they don't want to give black people welfare checks, but rather want to put them to work, poor whites have a decision to make: Challenge the lie that poor people are all lazy and not working, or direct their anger and frustration with their own conditions, all of the shame it brings them, at black people. Too often the latter is chosen.
This is "horizontal hostility," when oppressed groups turn on other disadvantaged groups rather than address the root causes of inequality.
But these interlocking systems of inequality don't just hurt people of color. They also undermine the interests of poor conservative whites. When dominant culture promotes stereotypes that degrade the poor, it creates a rush to the exits of self-identifying as poor. This "internalized oppression" prevents the unification of the poor to realize common claims to dignity despite economic impoverishment.
By identifying poverty with people of color, the powerful manipulate those poor whites who are either outright racists or who unconsciously fear identification with the stereotyped character of non-whites. Though aimed at people of color, the thinking that suggests the poor lack respectable work ethic and virtuous moral character becomes a conceptual lever that functions to induce shame that makes the poor easier to manipulate.[12] This is why dominant culture works so hard to identify scapegoats (black people, undocumented workers, feminists, LGBTQ folks) to channel anger and self-hatred.
4. The Poor Refuse to Work
A cornerstone in plutocratic mythology is that the poor just won't take responsibility for their lives and get to work! This belief is logically implied in Romney's now infamous remarks about the Obama-47 percent. In addition to inaccurately representing the political-orientation and make-up of those who pay no income taxes,[13] Romney chastised poor welfare beneficiaries ( many of whom turn out to be Republicans!) for refusing to take responsibility, but instead demanding government solve all of their problems and provide for their every need.
"I'll never convince them that they should take personal responsibility and care for their lives," said Romney.
Such thinking speaks to a woeful ignorance about the fact many recipients of government assistance such as food aid are children, elderly, and/or disabled. According to the Department of Agriculture, "In fiscal year 2010, 76 percent of all SNAP households included a child, an elderly person, or a disabled nonelderly person. These households received 84 percent of all SNAP benefits."[14]
In fact, 46.6 percent of food stamp recipients are children, and another 7.9 percent are elderly.[15] Add those together and you realize that the "just get a job" solution is inappropriate for upwards of half of all food benefit recipients. Of course, this figure does not even include those who are not children or elderly but who have a disability that either prevents them from working or limits their work options.
Equally interesting, those who are able to work, but are unemployed and receiving food aid account for less than 20 percent of all recipients. Only the most egregious classist thinking would confidently assume such persons are simply lazy, happily poor freeloaders.[16]
The stereotype, that the poor and work-able lack the desire or self-respect to seek work is a product of genuine ignorance and class privilege. Those who know something about being poor, having a bad stroke of luck and generally lacking privilege know that this is a gross stereotype; something said by those who know the least about such circumstances.
5. Education Necessarily Remedies Poverty
Another plutocratic myth suggests that a lack of education is the root of poverty, and that education is the answer to poor people's plight. This is also an assertion many liberals like President Obama regularly make. Joining them are conservatives like Newt Gingrich who, in the lead-up to the South Carolina primaries, defended his earlier remarks about the poor and food stamps, stating: "I'm going to continue to find ways to help poor people learn how to get a job, learn how to get a better job and learn some day to own the job."[17]
These ways of thinking legitimize the plight of the poor, effectively blaming victims of exploitation: blaming low-income workers' conditions on their failure to possess a real job, which means a job that requires a degree.
When politicians of both dominant parties incessantly repeat the mantra that world-class education is needed to acquire good jobs, what does this say to farmworkers, retail workers, housekeepers, childcare laborers, and other so-called relatively "low-skilled" workers? The inescapable logical implication of these assertions is that they do not deserve to earn enough to sustain themselves and their families. This line of thinking is rendered absurd when we consider how essential such workers are in our economy and social structures.
The Coalition of Immokalee Workers (CIW) reports that Florida Tomato pickers have to pick more than two tons of tomatoes in grueling conditions to earn the equivalent of Florida minimum wage for a 10-hour workday. Workers make an average of 45 cents per 32-pound bucket of tomatoes, a rate that hasn't meaningfully changed since 1978.[18] CIW cites a 2008 USDA report indicating that farmworkers are "among the most economically disadvantaged working groups in the US" and "poverty among farmworkers is more than double that of all wage and salary employees."
Despite including sample wages from managers and supervisors, who make up just 21 percent of all farm workers, The National Agricultural Workers Survey (NAWS) shows that the average individual income is less than $13,000 and the average household income is less than $18,000.
But rather than addressing the unethical business practices of extracting wealth from workers' labor with less than subsistence-level wages, the "get an education" mantra tells the poor that they should only expect to be treated with dignity once they have earned a college-degree. Both ignoring the working poor, and assuming the solution to the working poor's poverty is education, functions to disappear the routine, systematic exploitation of the poor for the benefit of CEOs and investors.
The rising number of impoverished graduate degree holders further demonstrates that the "education is necessarily the solution to poverty" mantra is a fallacious oversimplification that distorts reality. As ABC News reported in May 2012,[19] the number of people possessing a PhD who received some kind of public assistance increased more than three-fold between 2007 and 2010, and nearly the same for those with master's degrees.[20]
Ironically many of these impoverished academics are engaged in full-time work at part-time pay in the institutions of higher education that are said to remedy the problem of poverty!
The exponential rise of poor graduate-level educated people is driven by the fact that non-tenured, part-time instructors - adjuncts - comprise nearly 70 percent of college and university faculties.[21] In June 2012, the Coalition on the Academic Workforce (CAW) released a report,[22] finding that the median adjuncts were paid for a standard college course was $2,700 in fall 2010, $2,235 at two-year colleges and $3,400 at four-year doctoral or research universities.
In "The Apology," Plato relayed Socrates' defense in court against charges that he was an atheist and corrupting the youth of Athens. Socrates argued that he was on trial because of his mission to expose the arrogance and the ignorance of the prominent, supposedly "wise" men of Athens.
The chief error of these men was that they thought themselves wise or enlightened when in fact their beliefs were superficial and often contradictory. This experience prompted Socrates to determine that: "Although I do not suppose either of us knows anything really beautiful and good, I am better off than he is - for he knows nothing and thinks that he knows."
Putting it differently, the feminist poet Adrienne Rich wrote that "power seems to engender a kind of willed ignorance, a moral stupidity, about the inwardness of others, hence of oneself."[23] The immortal wisdom here is that despite the prominent suggestion that the powerful are better positioned to understand the goings on of our world, it is often those who lack such power, privilege and the ignorance-arrogance it breeds, that are better positioned to know and articulate the truth.
Given that people living a thousand or more dollars above these thresholds are practically speaking economically impoverished, these thresholds are clearly poor indicators of poverty in our nation.
Census Bureau. 2011."Income, Poverty, and Health Insurance Coverage in the United States: 2010.
U.S. Department of Agriculture, Food and Nutrition Service, Office of Research and Analysis. (2011). Characteristics of Supplemental Nutrition Assistance Program Households: Fiscal Year 2010. By Esa Eslami, Kai Filion, and Mark Strayer. Project Officer, Jenny Genser. Alexandria, VA, see"Summary"
USDA, p.61
ABC News,"Full Transcript: George Stephanopoulos and Mitt Romney," September 14, 2012.
A brief exploration of Staples' profile shows that the majority of employees earn poverty-level wages, some earn pay between $40-80,000 and virtually no one earns $200,000.
Associated Press,"Gingrich to black people: paychecks, not food aid." January 6, 2012.
Democracy Now,"'Nickel & Dimed: On (Not) Getting By in America': Barbara Ehrenreich on the Job Crisis & Wealth Gap." August 8, 2011. 
USDA, p.57
Adler, Ben. 2012."The Nation: Gingrich Rides Racially Coded Rhetoric." NPR, January 18, 2012.
This manipulative ideological control is what the Italian Marxist social philosopher, Antonio Gramsci, meant by the term"social hegemony."
Factually speaking, Romney's comments are a specious conflation of Democrats, low to no-income earners who pay no income taxes, and welfare recipients. While these groups coincide at times, many do not fit so neatly into such groupings. For instance many conservatives pay no income taxes, receive welfare and do not vote for Obama. As Mark Karlin noted, in 2008 a quarter of low-income earners voted for the Republican ticket: 25-percent of those earning under $15,000, and 37-percent of those earning between $15,000-30,000. Add to this that many older Americans who are reliant on government programs support the Romney and previous Republican tickets. Karlin points to an article by CNN contending that fewer than 7% of the 47% not paying income taxes are working age and poor. Most of those not paying income taxes are seniors, on-duty military, and others who pay 7.6% to cover Social Security and Medicare. Mark Karlin, 19 Sept 2012."Five Lies in Romney's War on the '47 Percent,'" Truthout. 
USDA, p.16
USDA, p.23
If it is true that few are truly satisfied with the powerlessness and marginalization that comes with poverty, one could hardly assume that the poor, able-to-work, and unemployed do not want to work. With the 2012 unemployment rate at about 10%, and twice that in the black community, it seems naïve to assume getting a job is as simple as demanding "a paycheck," as Gingrich put it. Being jobless is a source of great shame in our society. This is particularly true for men, where dominant masculine norms require"authentic" men to be bread winners. Psychiatrist James Gilligan contends that the shame of economic failure is so great that it stimulates violence. Gilligan, James. 2001. Preventing Violence. New York: Thames & Hudson, p. 43
Fox News."Gingrich and Juan Williams Food Stamp Exchange Brings Debate Crowd to Its Feet." January 17, 2012.
"Facts and Figures on Florida Farmworkers," Coalition of Immokalee Workers,  April 2009
Suanna Kim, May 9, 2012,"The Number of Ph.D.s on Public Aid Triples in U.S.," ABC News
From 9,776 to 33,655 for PhDs, and 101,682 to 293,029 for those with a Masters degree.
Adjuncts teaching at the community college and state college level in a state like Florida, for instance, make under $2,000 per class. This means that teaching 8 classes a year yields about $16,000 annually
See"Dismantling the professoriate," On Campus, September-October 2012.
Of Woman Born, Chapter III: The Kingdom of the Fathers, p.65