Foul water, dark money

The water that comes from the faucets of Flint is foul. The high levels of lead found in drinking water is just the latest in a series of catastrophes that have struck this middle-sized Michigan city over the last generation.

About twenty years ago Flint, once a thriving community with an industrial economy based on the automobile industry, began a downward spiral that transformed it into an emblem of a much wider trend: the de-industrialization of the United States.

Globalization, including capital flight to lower-wage, non-union locations (whether in the Far East or Alabama), plus Detroit’s abject failure to foresee, innovate and adapt to meet the quality standards and fuel efficiency of Japanese and South Korean manufacturers, made Flint the unofficial capital of the Midwestern Rust Belt.

The current public health crisis in Flint is thus is not an isolated event. It is both a consequence and a symptom of a whole matrix of economic, political and ideological changes that have been taking place not only in Michigan but in the nation as whole.

Why was the decision made to switch the source of water for Flint from that which previously provided safe water to both Flint and Detroit? To save money. Money to provide a basic necessity of life such as clean water to a poor, mainly minority community like Flint is seen as excessive and wasteful. It can be cut. Big government money for huge subsidies to the richest corporations in the world like Exxon is never scarce.

The crisis in Flint illustrates many of the disturbing trends transforming the United States into a less fair, a less equal, and a less democratic society. They include:

• The evisceration of a working class which once enjoyed middle class standards of consumption and well-being.

• A permanent war on government, especially government spending and government regulation, for the sake of providing the widest latitude, the lowest possible obligations, and a commanding influence to business and the rich. It’s not an across-the-board assault on government. Rather, it is waged along predictable fault lines of class and color.

• The deification of the market as the sole solution to all societal problems, the logical counterpart to the systematic denigration of government.

• The consequent deterioration of those necessities that the market does not provide and a shrunken government is unable to provide, such as physical infrastructure, including the water system and the social safety

• The substitution of evidence-based reality as reflected in science by a logic based on maximum profit.

Some manifestations of this transformation are obvious. The water in Flint stinks. But many of the most significant changes that are making this country less equal, less fair, and less democratic are taking place below the radar of most Americans. Yet together they are accomplishing a quantum leap in the breadth and depth of corporate domination.

Take the case of the recent rise of arbitration over litigation as a way to settle disputes between corporations and consumers, employers and employees. The headlines to an article that appeared in the New York Times on November 15, 2015, tell most of the story: “Arbitration Everywhere, Stacking Deck of Justice. Vast Trend Locks Americans Out of Court—Rulings Greatly Favor Business.” Here it is in greater detail: “By inserting individual arbitration clauses into a soaring number of consumer and employment contracts, companies like American Express devised a way to circumvent the courts and bar people from joining together in class action lawsuits, realistically the only tool citizens have to fight illegal or deceitful business practices.”

Just like that, corporations are managing to greatly increase their leverage relative to consumers and employees with arbitration provisions that appear in the fine print. Who knew?

The answer to the question of who benefits from arbitration is obvious, but the reasons and implications of another recent trend are more difficult to decipher. Corporations today are holding on to and declining to invest an unprecedented amount of cash. At a time when the labor market is still slack, wages flat, and the recovery weak, that money, if invested, would mean more jobs, higher wages and a healthier economy.

There is then at the very least, a gaping disconnect between corporate behavior and the interests of the people and the country. What is behind it? That’s a more difficult question to answer because corporations too should benefit from investing their money rather than parking it. Economists have been puzzling over this for some time but failing to reach a consensus.

At least three factors are likely at work. Flat wages and a slack labor market means less demand for products and services. Also curbing demand: lingering consumer debt. Why would corporations invest money to make products that consumers cannot afford to buy? Third, while a slack labor market may mean fewer consumers it also means business has more leverage over workers.

Then there is what New Yorker writer Jane Mayer, in a new book, calls “Dark Money.” The Supreme Court’s Citizens United decision removed the last barrier to corporate domination of American politics. Companies can essentially put as much money as they want into electing candidates and advocating policies, much of it in secret. For some companies, politics may be a better investment than making stuff people can’t buy.

Not nature but human action—or lack of action—created the Flint disaster. As Jane Mayer details in her book, which I will review in a later column, dark money is producing a human-generated disaster of much vaster societal proportions.

The connection between foul waters in Flint and dark money in politics may seem far-fetched. It’s not. The infamous Koch brothers have put more dark money into politics than anyone. Much of it has gone to preserve the freedom to pollute. Data from the EPA indicate that in 2012 Koch Industries was the single biggest producer of toxic waste in the United States. Foul water and dark money have a close and poisonous connection.