Empire of Illusion (26 page)

Our health system costs nearly twice as much as national programs in countries such as Switzerland. The overhead for traditional Medicare is 3 percent, and the overhead for the investment-owned companies is 26.5 percent. A staggering 31 percent of our health-care expenditures is spent on administrative costs. Look what we get in return. And yet the reality of the health-care system is never discussed because corporations, which fund the main political parties, do not want it discussed.

The Democratic Party has been as guilty as the Republicans in the abdication of real power to the corporate state. It was Bill Clinton who led the Democratic Party to the corporate watering trough. Clinton argued that the party had to ditch labor unions, no longer a source of votes or power, as a political ally. Workers, he insisted, would vote Democratic anyway. They had no choice. It was better, he argued, to take corporate money and do corporate bidding. By the 1990s, the Democratic Party, under Clinton's leadership, had virtual fund-raising parity with the Republicans. Today the Democrats raise more.

The legislation demanded by corporations sold out the American worker. This betrayal was accompanied with a slick advertising campaign that promoted the laws, used to destroy the working class, as the
salvation
of the American worker. The North American Free Trade Agreement was peddled by the Clinton White House as an opportunity to raise the incomes and prosperity of the citizens of the United States, Canada, and Mexico. NAFTA would also, we were told, stanch Mexican immigration into the United States.

“There will be less illegal immigration because more Mexicans will be able to support their children by staying home,” President Clinton said in the spring of 1993 as he was lobbying for the bill.

But NAFTA, which took effect in 1994, had the effect of reversing every one of Clinton's rosy predictions. Once the Mexican government lifted price supports on corn and beans grown by Mexican farmers, those farmers had to compete against the huge agribusinesses in the United States. Many Mexican farmers were swiftly bankrupted. At least 2 million Mexican farmers have been driven off their land since 1994. And guess where many of them went? This desperate flight of poor Mexicans into the United States is now being exacerbated by large-scale factory closures along the border as manufacturers pack up and leave Mexico for the cut-rate embrace of China's totalitarian capitalism. But we were assured that goods would be cheaper. Workers would be wealthier. Everyone would be happier. I am not sure how these contradictory things were supposed to happen, but in a sound-bite society, reality no longer matters. NAFTA was great if you were a corporation. It was a disaster if you were a worker.

Clinton's welfare reform bill, signed on August 22, 1996, obliterated the nation's social safety net. It threw 6 million people, many of them single mothers, off the welfare rolls within three years. It dumped them onto the streets without child care, rent subsidies, or continued Medicaid coverage. Families were plunged into crisis, struggling to survive on multiple jobs that paid $6 or $7 an hour, or less than $15,000 a year. And these were the lucky ones. In some states, half of those dropped from the welfare rolls could not find work. Clinton slashed Medicare by $115 billion over a five-year period and cut $25 billion in Medicaid funding. The booming and overcrowded prison system handled the influx of the poor, as well as our abandoned mentally ill. We have 2.3 million of our citizens behind bars, most of them for nonviolent drug offenses. More than one in one hundred adults in the United States is incarcerated. The United States, with less than 5 percent of the global population, has almost 25 percent of the world's prisoners. One in nine black men between twenty and thirty-four is behind bars. This has effectively decapitated the leadership in the inner cities, where African Americans have traditionally had to react more quickly to confront social injustices.

The Clinton administration, led by Lawrence Summers, signed into law the Financial Services Modernization Act of 1999, which ripped down the firewalls that had been established by the 1933 Glass-Steagall Act. Designed to prevent the kind of meltdown we are now experiencing, Glass-Steagall established the Federal Deposit Insurance Corporation. It set in place banking reforms to stop speculators from hijacking the financial system. With Glass-Steagall demolished, and the passage of NAFTA, the Democrats, led by Clinton, tumbled gleefully into bed with corporations and Wall Street speculators. They used institutions like Fannie Mae and Freddie Mac as a welfare gravy train. And many of the architects of this deregulation, economists such as Summers, remain in charge of the nation's economic policy.

“When times are prosperous, we do not mind a modest increase in ‘welfare,'” wrote Robert N. Bellah:

The cost of our empire of illusion is not being paid by the corporate titans. It is being paid on the streets of our inner cities, in former manufacturing towns, and in depressed rural enclaves. This cost transcends declining numbers and statistics and speaks the language of human misery and pain. Human beings are not commodities. They are not goods. They grieve and suffer and feel despair. They raise children and struggle to maintain communities. The growing class divide is not understood, despite the glibness of many in the media, by complicated
sets of statistics, lines on a graph that chart stocks, or the absurd, utopian faith in unregulated globalization and complicated trade deals. It is understood in the eyes of a man or woman who is no longer making enough money to live with dignity and hope.

Elba Figueroa, forty-seven, lives in Trenton, New Jersey. She worked as a nurse's aide until she got Parkinson's disease. She lost her job. She lost her health care. She receives $703 a month in government assistance. Her rent alone runs $750 a month. And so she borrows money from friends and neighbors to stay in her apartment. She laboriously negotiates her wheelchair up and down steps and along the sidewalks of Trenton to get to soup kitchens and food pantries to eat.

“Food prices have gone up,” Figueroa says, waiting to get inside the food pantry run by the Crisis Ministry of Princeton and Trenton. “I don't have any money. I run out of things to eat. I worked until I physically could not work anymore. Now I live like this.”

The pantry occupies a dilapidated, three-story art deco building in Old Trenton, the poorest neighborhood in the city. The pantry is one of about two dozen charities in the city that provide shelter and food to the poor. Those who qualify for assistance are permitted to pick up food once a month. Clutching pieces of paper that show the number of points they have been allotted, they push shopping carts in a U-shaped course around the first floor. Every food item is assigned a number of points. Points are allotted according to the number of people in a household. The shelves of the pantry hold bags of rice, jars of peanut butter, macaroni and cheese, and cans of beets, corn, and peas. Two refrigerated cases have eggs, chickens, fresh carrots, and beef hot dogs. “All Fresh Produce 2 pounds = 1 point,” a sign on the glass door of the refrigerated unit reads. Another reads: “1 Dozen EGGS equal 3 protein points. Limit of 1 dozen per household.”

The swelling numbers waiting outside homeless shelters and food pantries around the country, many of them elderly or single women with children, have grown by at least 30 percent over the last year. General welfare recipients struggle to survive on $140 a month in cash and another $140 in food stamps. This is all many in Trenton and other impoverished pockets now have to survive. Trenton, a former manufacturing center with a 20 percent unemployment rate and a median
income of $33,000, is a window into our unraveling. And as the government squanders taxpayer money in fruitless schemes to prop up insolvent banks and investment houses, citizens are thrown into the streets without work, a place to live, or enough food.

There are now 36.2 million Americans who cope daily with hunger, up by more than 3 million since 2000, according to the Food Research and Action Center in Washington. The number of people in the worst-off category—the hungriest—rose by 40 percent since 2000, to nearly 12 million people.

“We are seeing people we have not seen for a long time,” says the Reverend Jarrett Kerbel, director of the Crisis Ministry's food pantry, which supplies food to 1,400 households in Trenton each month. “We are seeing people who haven't crossed that threshold for five, six, or seven years coming back. We are seeing people whose unemployment has run out, and they are struggling in that gap while they reapply, and, of course, we are seeing the usual unemployed. This will be the first real test of [Bill] Clinton's so-called welfare reform.”

The Crisis Ministry, like many hard-pressed charities, is over budget, and food stocks are precariously low. Donations are on the decline. There are days when soup kitchens in Trenton are shut down because they have no food.

“We collected 170 bags of groceries from a church in Princeton, and it was gone in two days,” Kerbel says. “We collected 288 bags from a Jewish center in Princeton, and it was gone in three days. What you see on the shelves is pretty much what we have.”

States, facing dramatic budget shortfalls, are slashing social assistance programs, including Medicaid, social services, and education. New Jersey's shortfall has tripled to $1.2 billion and could soar to $5 billion. Tax revenue has fallen to $211 million less than projected. States are imposing hiring freezes, canceling raises, and cutting back on services big and small, from salting and plowing streets in winter to heating assistance programs. Unemployment insurance funds, especially with the proposed extension of benefits, are running out of money.

Dolores Williams, fifty-seven, sits in the cramped waiting room at the Crisis Ministry clutching a numbered card, waiting for her number to be called. She has lived in a low-income apartment block known as The Kingsbury for a year. Two residents, she says, recently jumped to
their deaths from the nineteenth floor. She had a job at Sam's Club but lost it. No one, she says, is hiring. She is desperate.

She hands me a copy of the
Trentonian
, a local paper. The headline on the front page reads: “Gangster Slammed for Bicycle Drive-By.” It is the story of the conviction of a man for a fatal drive-by shooting from a bicycle. The paper is filled with stories like these, the result of social, economic, and moral collapse. Poverty breeds more than hunger. It destroys communities. In one
Trentonian
story, a fifty-six-year-old woman is robbed and pistol-whipped in the middle of the afternoon. Another article reports the plight of four children whose parents had been shot and seriously wounded. “Libraries OK Now, but Future Is Murky,” a headline reads. Another reads: “Still No Arrests in Hooker Slayings.”

“It is like this every day,” Williams says.

Corporations are ubiquitous parts of our lives, and those that own and run them want them to remain that way. We eat corporate food. We buy corporate clothes. We drive in corporate cars. We buy our fuel from corporations. We borrow from, invest our retirement savings with, and take out college loans with corporations and corporate banks. We are entertained, informed, and bombarded with advertisements by corporations. Many of us work for corporations. There are few aspects of life left that have not been taken over by corporations, from mail delivery to public utilities to our for-profit health-care system. These corporations have no loyalty to the country or workers. Our impoverishment feeds their profits. And profits, for corporations, are all that count.

The corporation is designed to make money without regard to human life, the social good, or the impact of the corporation's activities on the environment. Corporation bylaws impose a legal duty on corporate executives to make the largest profits possible for shareholders. In the 2003 documentary film
The Corporation
by Mark Achbar, Jennifer Abbott, and Joel Bakan, management guru Peter Drucker tells Bakan: “If you find an executive who wants to take on social responsibilities, fire him. Fast.” And William Niskanen, chair of the libertarian Cato Institute, says that he would not invest in a company that promoted corporate responsibility.