The Gulf of Disbelief By William Bowles

14 September 2005

‘We have been abandoned by our own country,’ Mr Broussard told NBC’s Meet the Press programme. ‘It’s not just Katrina that caused all these deaths in New Orleans. Bureaucracy has committed murder here in the greater New Orleans area, and bureaucracy has to stand trial before Congress now.’
Aaron Broussard, the president of Jefferson parish, south of New Orleans

Bush FishMr Broussard has almost got it right but it’s not simply the state bureaucracy that has abandoned the people of Mississippi but the state itself. What used to be called the social contract between the governed and those who govern has been cast aside, surplus to requirement in this age of rapacious and crisis-ridden capitalism.

Aside from everything else Hurricane Katrina has blown away it’s also ripped off the mask that covers the real face of corporate capitalism and reveals the stark reality that the US government has as little regard for its own ‘citizens’ as it does for those of Iraq or Afghanistan.

As my earlier piece alluded to, aside from the so-called neo-liberal agenda of cutting back social services to the absolute minimum and especially the funding of infrastructure, initiated under Reagan in the 1970s, the US government’s crime of abandoning the fate of New Orleans’ largely Black and poor population (around 67%) has been compounded by the way the corporate media has presented the aftermath with headlines screaming ‘Anarchy!’, ‘Rape and Pillage’, when the reality on the ground even from the NOPD (New Orleans Police Department) is that more generalised looting has been quite limited, largely confined to junkies desperate for a fix.

In what is an awful irony, perhaps it is the exposure of the Bush regime’s cynical betrayal of all that it purportedly stands for that has hopefully finally brought home to millions of Americans, the reality of the system they live under, in ways that the destruction of a culture in a far-off land, has failed to do.

Could the destruction of New Orleans be the nail in the collective coffin of the Bush gang of pirates? Not immediately of course but it has ripped away the façade of US capital, notwithstanding the misrepresentations in the media about ‘anarchy’, ‘rape and pillage’.

Above all else, and in spite of the reality staring the media in the face, they refuse outright to connect the two events, Iraq and New Orleans and see them for what they are, two sides of the same coin. Here in the UK, the connection between the two situation has been studiously avoided, for to connect the two situations would raise the spectre of a vast gulf of disbelief opening up between the propaganda and the reality.

Amazingly, one BBC story somehow got through the editorial minefield, albeit as a ‘viewpoint’ rather than ‘news’. Titled, ‘Viewpoint: New Orleans crisis shames US’ (4/9/05), the writer informs us that:

It has been a profoundly shocking experience for many across this vast country who, for the large part, believe the home-spun myth about the invulnerability of the American Dream.

The party in power in Washington is always happy to convey the impression of 50 states moving forward together in social and economic harmony towards a bigger and better America.

The piece continues:

A genuinely heroic mayor orders a total evacuation of the city the day before Katrina arrives, knowing that for decades now, New Orleans has been living on borrowed time.

The National Guard and federal emergency personnel stay tucked up at home.

The havoc of Katrina had been predicted countless times on a local and federal level – even to the point where it was acknowledged that tens of thousands of the poorest residents would not be able to leave the city in advance.

No official plan was ever put in place for them.

But, it has to be said that this piece is the exception to the rule and, as the reality of the federal government’s dereliction has sunk in, so the media coverage has retreated from its earlier, very critical position of Bush. What is also apparent, is the gulf between the BBC’s online coverage such as the story above and how both BBC radio and television news reports the disaster.

What is entirely missing from media coverage of the events on the Gulf coast is any kind of history or analysis of why the richest country on the planet appeared to be clueless when it came to dealing with an entirely predictable event; to paraphrase our tired leaders, Katrina was a case of ‘not if but when?’ and what does it tell us about US capitalism and indeed Western ‘civilisation’ and its priorities.

To get a handle on this we have to take a look at the history of Western capitalism especially over the past 30-40 years, for it is here, in the economics of capitalism that we find the answers.

I’m in the middle of reading a book by Walden Bello, ‘Dilemmas of Domination – The unmaking of the American Empire’ which in no nonsense language spells out the context within which we find ourselves but for a change, the perspective is from the South where the effects of the crisis of capital have been so profound, so devastating to literally hundreds of millions of people.

As I have long contended here in these columns, the fact that the US possesses overwhelming military power, does not by itself an empire make, nor does it necessarily guarantee winning a war as Iraq is showing.

Bello contends and I think quite correctly, that the US is suffering from severe “overstretch”. The Wolfowitz, Cheney, Rumsfeld et al, ‘axis’ upon whose theories Bush has pinned his hopes, has from the beginning proved to be an abject failure. The idea that the US, through overwhelming air-power could fight wars on two (or more) fronts simultaneously, only works if you don’t have to actually ‘pacify’ what remains using troops on the ground.

Having decided that the US didn’t need a big, permanent army (that would only be possible if conscription was reintroduced), the Bush Gang having ‘marched them up to the top of the hill’ had no choice but to commit itself, first in Afghanistan which was the Gang’s first mistake but unavoidable because it was in Afghanistan that the ‘airpower alone’ theory could be put to the test (after an initial ‘dry run’ pounding a defenceless Yugoslavia).

Worse, Afghanistan has proved to be a big drain, sucking up men who it desperately needs in Iraq. All in all, Cheney and co’s theory went belly up before it was even put into practice.

But even worse, the Bush Gang policy of ‘going it alone’ (or unilateralism), invading countries willy-nilly, has created not only a host of enemies, from Latin America to the Urals but has opened up deep cracks in the so-called Western alliance.

As Bello puts it, a uni-polar world is inherently unstable.

Driving the entire enterprise is a capitalism beset with recurring and ever-worsening crises which are entirely determined by over-production and by the over-accumulation of capital that simply put, has no place to go short of displacing a competitor or of finding new markets into which to invest the surplus. Integral to this process is the falling rate of profit, itself an inevitable product of the capitalist economy.

All of this might seem miles away from what even on the ‘left’ is largely presented as one of ‘bad men’ will evil intentions but the fact is, regardless of how its executed, the policies of Bush and Blair are driven largely by the economics of capitalism.

Bello does a wonderful job of unpacking the history of contemporary US capitalism and in doing so, exposes exactly why New Orleans happened. He sums it up as follows:

[T]hree crises threaten to convulse the empire: a crisis of overproduction, a crisis of overextension, and a crisis of legitimacy … Today global capitalism is distinguished by the hegemony of the U.S. economy, both as a market for goods and as a destination for capital. Roaming the world, U.S. transnational corporations function as agents for capital accumulation and production … One crisis is rooted in the contradiction between increased consumption of natural resources and the production of waste and finite ecological space. A second stems from the more intense conflict between the minority in command of productive and financial assets and a majority with little control over these … [A] third crisis…the widening gap between the growing productive potential of the system and the capacity of consumers to purchase its output. This gap has increased in recent years because of the radical free-market policies pushed by the global elite, which have depressed the incomes of working people in both the North and the South while concentrating wealth in the hands of a small minority. Termed variously as overproduction, overcapacity, or overaccumulation, this dynamic has resulted in declining growth rates in the center economies and disappearing profits in the industrial sector. It has also resulted in global financial speculation becoming the central source of profit and capital accumulation. [my emph. WB]

The last point is critical as speculation impacts especially on the poor countries whose economies become the targets of financial speculators who can, through the instantaneous movement of financial notes, make a proverbial killing simply through the difference in value of a currency. Moreover, speculation produces no real wealth and is inherently destabilising.

With the liberation of finance, economic crises have become more and more frequent and serious, and most of them have occurred in the South.

The latest phase of capitalism based upon on nothing more than financial speculation is marked by a literal anarchy with nation states having virtually no control over their economies, the poorer states especially have seen their national wealth wiped out literally overnight as their currencies came under attack:

…variations in exchange rates, interest rates, and stock prices among capital markets in the North tend to be relatively small. The big differentials are to be found in the emerging markets of Asia and elsewhere.

The figures speak for themselves:

By the middle of the [1990s]…the volume of transactions per day in foreign exchange markets came to over $1.2 trillion-a figure equal to the value of world trade in goods and services in an entire quarter.

The neo-liberal agenda has in Bello’s words ‘gut global demand’ due to the fact that in order to maintain profits it has been necessary to:

Bring … down wages, which meant cutting the engine of demand that capital needed in order to reproduce itself profitably, and … adding to the ranks of the global unemployed, as the penetration of goods and capital into the less competitive and less developed economies bankrupted local firms and farms, eliminating millions [of people] from the market.

You are right to ask, what has this got to do with New Orleans? Consider the following statistics

Between 1979 and 1989 in the United States, the hourly wage of 80 percent of the workforce declined, with the wage of the typical (or median) worker falling by nearly 5 percent in real terms. By the end of the Bush I administration, in 1992, the bottom 60 percent of the population had the lowest share, and the top 20 percent had the highest share, of total income ever recorded. And indeed, among the wealthiest 20 percent, gains were concentrated at the top 1 percent, which captured 53 percent of the total income growth among all families.

A trend that continued under Clinton, with spending ‘driven almost entirely by the enormous increase in consumption by the country’s richest households’. Elsewhere in the world, the increases in poverty were even greater with tens of millions of people made destitute and worse by the crisis of capital.

A look at the overcapacity of the productive power of developed capitalism reveals the true state of affairs. By the 1990s:

The world auto industry was selling just 74 percent of the 70.1 million cars it built each year. There was so much investment in worldwide telecommunications infrastructure that traffic carried over fiber-optic networks was reported to take up only 2.5 percent of capacity.

The same holds true for industry as a whole with the gap between capacity and sales according to the Economist, ‘the largest since the Great Depression.’

In an ironic replay of the picture of Victorian England painted by Marx, corporations were nevertheless forced to invest in the new technologies or if they didn’t, their competitors would or, they’d get swallowed up in the wave of mergers and acquisitions or go bust. But even though the new technologies were introduced to lower costs by reducing labour, the new technologies actually increased the output of already over-productive economies. And mergers didn’t help either, they too created even greater overcapacity by ‘rationalising’ production through economies of scale.

Thus the entire propaganda campaign mounted over the decades from ‘failed states’ through to the ‘war on terror’ has but one cause, the systemic contradictions of the capitalist system and the attempt by the most powerful, the US, to maintain its grip on the world’s resources, to extend its strategic control of key areas of the world and to overcome its major competitors, the EU, Japan and now China. In fact, Bello suggests that one of the major objectives of the invasion of Iraq was to deny China access to its oil resources.

This background is of course missing from ‘news’ coverage of major events which are presented to us in splendid isolation from their true causes. That the US state has impoverished its social services in order to transfer the wealth to the richest 1% just as its trade policies have impoverished tens of millions of people in the poor countries of the world. The onslaught on the world’s poor from the proverbial ‘underclass’ of the developed world to the vast majority of the planet’s population has been revealed by the events on the Gulf coast and represents yet another setback for the imperium.

Bello’s ‘overstretch’ is all too real but even more importantly, the events in New Orleans have shattered the legitimacy that the US has claimed as its trump card which taken together with the events in Abu Ghraib, Guantanamo and elsewhere and a stagnating economy, propped up by a dollar that the rest of world effectively subsidises, points to an imperium on its last legs even as it proclaims ‘full spectrum dominance’.


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