The Cost of Hollow Government

CBS organized a kind of economic town hall meeting with President Obama and has most of it piecemeal (with a commercial for every piece) on its website.  This is a question from a laid-off federal government worker (the National Zoo) that more than anything I've seen makes concrete the fact that loose talk and action affecting government programs have consequences for real people.  As President Obama said before--and says again here--these people have families and homes, children and lives just like those employed in the private sector.  They aren't aliens.  As he points out here, while the number of private sector jobs have been growing (however slowly) for at least a year, the unemployment rate stays high because government jobs are being lost at every level.  In most cases these people perform useful and needed services, and are often not compensated accordingly even in the best of times.  Now they are literally being called "waste."  It's the human as well as social cost of political cynicism.

Poison Your Kid for Christmas: Hollow Government, Continued

If you needed an illustration for Hollow Government and how it connects to the unsafe toys that are at the very least complicating Christmas shopping for many Americans, we've got Exhibit A: Nancy Nord, acting Chairman of the Consumer Products Safety Commission.

Since Reaganism struck the first blow against too much gubment, this Commission, charged with insuring the safety of consumer products (yes, they actually have the responsibility spelled out in their name), has seen what the New York Times calls a "steady decline" in funding and in staff, so that today it's about half the size it was in 1980. So even though the importing of consumer goods has exploded to become a $614 billion business, the Commission polices those imports with all of fifteen inspectors.

Now Congress, alarmed by the killer pet food, contaminated toothpaste and leaded toys, wants to double the Commission's funding and greatly increase its staff. But Nancy just says no.

Says the Times: Ms. Nord opposes provisions that would increase the maximum penalties for safety violations and make it easier for the government to make public reports of faulty products, protect industry whistleblowers and prosecute executives of companies that willfully violate laws.

She argues that stricter regulations and more people to enforce them would create an unnecessary burden on the toy industry, for example, and anyway, making lead-free toys is "impractical."

Here is Hollow Government at its most naked. It isn't just Nancy--the Times quoted a White House spokesperson as saying the top Bush economic advisor "was preparing to send a letter to Congress 'that is probably even more forceful than Ms. Nord’s.'” So the ideological framework is clear. According to the Bushites, as Jon Carroll put it in his column on the subject, "the only problem currently faced by the Consumer Product Safety Commission is the continued existence of the Consumer Product Safety Commission."

So according to them, it's up to the corporations--the Hollow Corporations who subcontract the actual manufacture to the lowest bidder in China, India and elsewhere.

And as we've seen in the past, this kind of relationship of the deathly hollows leads not only to lead in toys, but to blatant corruption. The Washington Post has detailed some of the 30 or so free trips taken by Chairman Nancy and her Bushite predecessor, paid for by Hollow Corporations she is supposed to be regulating.

One such trip was an 11 day junket to China and Hong Kong taken by the previous chairman--not a factfinding mission or perish the thought an inspection tour, but "gift travel"--paid for by a Hollow Corporation with offices in suburban DC but nothing else in the U.S.--its products all made in Asia.

In the Clinton administration, the story says, this just didn't happen--no trips were paid for by regulated corporations and most were paid for by the agency itself.

In calling for Nancy Nord to resign, Senator Sherrod Brown stated, " Parents have the right to trust that their children's toys are safe. Every American has the right to trust that their government is doing its job to keep us all safe."

Those "rights" simply aren't recognized as such by the far right and the Bushite Hollow Government. The functional Bushite philosophy is that the role of government is to funnel tax money to crony corporations, and if that's not possible at the moment, to let corporations do whatever the hell they want as long as they are buying the drinks, and greasing the right palms.

Yesterday parents had to worry about not knowing whether particular toys have been recalled or not. Today they have to worry that not only doesn't the government have enough people to check these toys out, they don't really want to. And even if Congress feels it is representing the people's interest in safe toys by appropriating more money so the government can do its job, the Bushites won't do it.

So now it may not matter if a toy is made in China or India or in Indiana. You're taking your chances on poisoning your child for Christmas.

From "The Hollow Men" series by Howard Penning.

The Holloween Story: Hollow Military

Update: A version of this is Rescued at Daily Kos, Recommended at European Tribune , front-paged at E Pluribus Media and a top-rated article at Political Cortex.


As children don the costumes of ghouls and monsters for Halloween, it may be our uncomfortable duty (especially as we gingerly begin our Christmas shopping) to face some monstrous changes that now shape our reality.

We are the hollow men
We are the stuffed men
Leaning together
Headpieces filled with straw*

The Hollow Military

The response of the Iraqi government to armed members of Blackwater USA, a for-profit corporation, killing 17 Iraqi civilians in one incident in September has led to an avalanche of attention on the role of private contractors, armed and not, in Iraq. This led to a number of revelations, including the recent U.S. government study that could not account for about a billion dollars paid to another for-profit security company, DynCorp International, ostensibly to train police in Iraq.

Yet these firms have operated in Iraq from the beginning of the war through the occupation. There are an estimated 180,000 civilian contractors in Iraq, at least 45,000 in armed roles (according to Joan Walsh of Salon in a TV interview), while there are 160,000 U.S. troops. Over the past four years, monies paid to such firms by the U.S. State Department have gone from $1 billion to $4 billion a year, officially. But even that doesn't measure the extent of the money paid to for-profit contractors and their power in Iraq.

Moreover, this use of contractors is not, as some media reports would have it, an accidental byproduct of a tiff between the Defense and State departments, forcing State to hire private security when the Pentagon refused to protect their diplomats in Iraq. It is the result of deliberate policy, articulated by Defense Secretary Donald Rumsfeld. It is part of his philosophy of the "hollow military."

Here's what Naomi Klein writes in her book, The Shock Doctrine:

"...Rumsfeld saw the army shedding large numbers of full-time troops in favor of a small core of staffers propped up by cheap temporary soldiers from the Reserve and National Guard. Meanwhile, contractors from companies such as Blackwater and Halliburton would perform duties ranging from high-risk chauffeuring to prisoner interrogation to catering to health care." [p.285]

But the reality in Iraq has turned out to be even more extensive than Rumsfeld's dream. In his detailed report in Salon, P.W. Singer wrote:

"The use of contractors in Iraq is unprecedented in both its size and scope...What matters is not merely the numbers, but the roles that private military contractors play. In addition to war gaming and field training U.S. troops before the invasion, private military personnel handled logistics and support during the war's buildup. The massive U.S. complex at Camp Doha in Kuwait, which served as the launch pad for the invasion, was not only built by a private military firm but also operated and guarded by one. During the invasion, contractors maintained and loaded many of the most sophisticated U.S. weapons systems, such as B-2 stealth bombers and Apache helicopters. They even helped operate combat systems such as the Army's Patriot missile batteries and the Navy's Aegis missile-defense system.

Private military firms -- ranging from well-established companies, such as Vinnell and MPRI, to start-ups, such as the British Aegis -- have played an even greater role in the post-invasion occupation. Halliburton's Kellogg, Brown and Root division, recently spun off into its own firm, currently runs the logistics backbone of the force, doing everything from running military mess halls to moving fuel and ammunition. Other firms are helping to train local forces, including the new Iraqi army and national police."

It's worth noting also, that according to A Pretext for War by James Baxter, these same corporations--whose infamous work in Iraq first came to light in the Abu Ghraib scandals--were influential in Pentagon circles before the war started.

As for Blackwater and other security firms, their roles as armed forces is extensive, unregulated and often unknown. But Singer asserts, "As it has been planned and conducted to date, the war in Iraq would not be possible without private military contractors." He quotes an estimate that over 1,000 contractors have been killed and 13,000 wounded, but they aren't counted in official casualties. The mercenaries are extremely well paid--the difference between Privates and Privatized is great. So it should not be surprising that, as Singer writes, "Halliburton's contract has garnered the firm $20.1 billion in Iraq-related revenue and helped the firm report a $2.7 billion profit last year. To put this into context, the amount paid to Halliburton-KBR is roughly three times what the U.S. government paid to fight the entire 1991 Persian Gulf War."

But this is only the beginning. Read on.

* verses from "The Hollow Men" by T.S. Eliot.

by Howard Penning in Vancouver, BC.

Holloween Story: Hollow Government

Let me also wear
Such deliberate disguises
Rat’s coat, crowskin, crossed staves
In a field
Behaving as the wind behaves
No nearer—

The Hollow Military is not only a strategy, it is part of an ideology. Conservatives who want the smallest possible government are getting their wish with the Bushite government, but in a perverse way. The Bushites have shed actual government employees, either by underfunding government agencies and functions, or by replacing real managers, experts, technicians and career public servants with appointees hired for their political party activism and ideological fervor. But they have not cut government spending. In fact they've turned the Clinton surplus into a huge deficit, financed by a foreign power with a putatively Communist government: China.

Under Bush, the basic function of government has become to distribute taxpayer money to select corporations. As Naomi Klein points out, this is a process that G.W. Bush began as governor of Texas. Klein writes:"The future president's commitment to auctioning off the state, combined with Cheney's leadership in outsourcing the military and Rumsfeld's patenting of drugs that might prevent epidemics, provided a preview of the kind of state the three men would construct together---it was a vision of a perfectly hollow government." [294]

9/11 provided them their major opportunity, so untold billions went through the hollow Homeland Security department to favored corporations, and billions more to Iraq. This was part of "a straight-up transfer of hundreds of billions of public dollars a year into private hands. It would take the form of contracts, many offered secretively, with no competition and scarcely any oversight, to a sprawling network of industries: technology, media, communications, incarceration, engineering, education, health care."

It is the realization of a "radical vision of a hollow government in which everything from war fighting to disaster response was a for-profit venture." [298]Conservatives laud privatization for the efficiency supposedly inherent in for-profit ventures. But it hasn't worked out that way, partly because of the dynamics of monopoly capitalism, and partly because the Hollow Military and the Hollow Government depends on the Hollow Corporation.

by Howard Penning

Holloween Story: Hollow Corporation in Iraq

Between the idea
And the reality
Between the motion
And the act
Falls the Shadow

The money from the Hollow Goverment to supplement the Hollow Military goes to the Hollow Corporation. Just as the Hollow Government doesn't actually do the public business, and the Hollow Military doesn't conduct the war, the Hollow Corporation doesn't do the work. They all hire somebody else to do it. And often enough, the people they hire, hire somebody else. And so on.

Sometimes this results in luxurious overspending and immense waste, as in the Green Zone and military installations in Iraq. As writes, "The operation is one of the most lavishly supported ever, and most of that has been due to contractors to whom we have outsourced almost all the logistics, and the protection of that enormous supply chain. But it has proven to be remarkably inefficient, all the while undermining our counterinsurgency efforts. According to testimony before the House Committee on Oversight and Government Reform, the Defense Contract Audit Agency has identified more than a staggering $10 billion in unsupported or questionable costs from battlefield contractors -- and investigators have barely scratched the surface."

In other situations, such as the billions wasted on the supposed "reconstruction" efforts in Iraq, it's a chain of subcontracts leading to no results at all, except waste and fraud, and to such situations as Bechtel being contracted to fix the electricity system, and after years, leaving Iraq with the electricity system in worse shape than when it arrived. Much of this travesty is a matter of public record through congressional investigations. As Klein writes:

"Freed of all regulations, largely protected from criminal prosecution and on contracts that guaranteed their costs would be covered, plus a profit, many foreign [non-Iraqi] corporations did something entirely predictable: they scammed wildly. Known in Iraq as 'the primes,' the big contractors engaged in elaborate subcontracting schemes."

Money would pass through one subcontractor after another, each taking their cut, until there was little left for the actual work, so it isn't too surprising that the materials were cheap, the work shoddy, and nothing was accomplished--while conditions got worse, and insurgency grew.

In the end the cheapest workers were hired, and often imported. Thus the mystery of why a country in which electrical and water systems, bridges, schools, etc. had been constructed before American bombs destroyed them could not be re-constructed is solved. I recall reading riverbend's blog early in the occupation in which she wrote about Iraqi firms eager to reconstruct their own country, and with the skills, knowledge and creativity to do it quickly and cheaply--but they were being ignored. These were the same people who constructed all this infrastructure in the first place--but U.S. based multinationals saw Iraq as a major opportunity to get richer quickest, and so Iraqis were rarely hired to rebuild their own country, especially not professionals. Which of course added immensely to the frustration and emnity of the Iraqi people.

But the story of the Hollow Corporation does not begin in Iraq--nor does it end there. Which will bring us, very soon, to Christmas.

by Howard Penning

Holloween Story: Hollow Corporation Christmas

Between the conception
And the creation
Between the emotion
And the response
Falls the Shadow

Donald Rumsfeld did not invent the concept of the Hollow Military out of thin air. It came, as Naomi Klein claims, from the Hollow Corporation of 1990s America. Companies that had previously manufactured their own products and "maintained large, stable workforces" in America went beyond moving factories to the South (the 1970s) or to Mexico and Asia (1980s). They stopped owning and maintaining factories at all. This became known as the "Nike model: "produce your products through an intricate web of contractors and subcontractors, and pour your resources into design and marketing." The other Hollow model was based on Microsoft: a small, tight workforce concentrating on "core competencies," while everything else ("from running the mailroom to writing code") is outsourced to temp workers. [Klein, 284-5.)

Rumsfeld came from this business background, and came to the Pentagon (Klein quoting Fortune magazine) "to oversee the same sort of restructuring that he orchestrated so well in the corporate world." [Klein, 285.]

By now--by 2007--the Hollow Corporation is a global fact. Another large factor in spreading it in the consumer goods area has been the spectacular rise of Wal-Mart, which as several books show (for instance, The Wal-Mart Effect by Charles Fishman ) has transformed the companies that supply the products it sells. Because Wal-Mart insists on huge quantities at low cost, companies have been forced to find the very cheapest materials and labor. In the vast majority of cases, they can't find labor cheap enough anywhere in America. They must subcontract to China.

As Wal-Mart grew to become "both the largest company in the world, and the largest company in the history of the world" (Fishman), so did the number of products supplied from China, so that as one scholar told Frontline, "China and Wal-Mart are a joint venture." And most big U.S. corporations that sell products must sell a lot of them through Wal-Mart, so they restructure to please Wal-Mart, and so they become part of that joint venture.

But just as a scandal involving Blackwater alerted many to the Hollow Military, the current scandal over the safety of products manufactured in China is alerting the public to just how much of what we buy is made (in whole or in part) in China, and how little is made by the American company whose name is on the label--including traditional and trusted names such as Fisher-Price, Mattel and General Foods.

The news came fast and furious, in a bewildering array of products, from deadly pet food and tainted toothpaste to leaded toys. Close to 20% of China's products, it turned out, did not meet its own health and safety standards. At first, Americans became extremely wary of Chinese products, especially food products. But then it became clearer that avoiding processed foods, vitamins and health products that don't have some ingredients made in China (including ascorbic acid in Vitamin C) is virtually impossible.

Then such trusted American companies as General Mills announced they would be doing more testing (while quietly admitting they hadn't been doing much before, or testing additives at all.) Whether the public was reassured, or simply in despair and denial, this storm passed. But it was a teachable moment in the extent of the Hollow Corporation.

For there are no Colgate Toothpaste factories in Anytown USA, not Anymore. (When U.S. Customs seized a supply of toxic Colgate, it was marked "Made in China" and "Made in India.) There are no Mattel or Fisher-Price toy factories with happy American elves. There is just a board of directors and a flotilla of managers coordinating subcontractors, including the well-paid ones (advertising and marketing agencies) and the very poorly paid ones (the workers who actually make the products.) That's American Know-How in 2007. Welcome to Hollow-een.

Long-term, doesn't it concern anyone that the skills and infrastructure to actually make things are disappearing from America, and that if anything happens to short-circuit the supply line from Asia, this nation may become a pitiful helpless giant?

But in the short-term, Christmas approaches, and problems with toys made in China continue. Just last week, Mattel recalled another 38,000 toys imported from China by Fisher-Price, as part of a larger recall of 665,000 toys.

China has rightly pointed out that checking for the health and safety of products is the responsibility of the importing country. But our Hollow Government doesn't have the expert personnel to do it anymore. Our Hollow Corporations would rather not spend the money on it, preferring to concentrate on marketing and advertising. They import from China because the products are made there as cheaply as possible--and they are shocked, shocked that corners are cut affecting health and safety.

And even if the U.S. government had the capability to protect the consumer, just how far they could afford to push China is a real question, since China owns so much U.S. government debt--in effect, owns so much of the Hollow United States and its future.

This leaves a real conundrum for many Americans this Christmas, especially for the millions whose hold on the middle class is tenuous: without the good wages for actually making things that these corporations used to pay, they work several lower-paying jobs to make ends meet. Paying for more expensive toys and gifts for Christmas from smaller exclusive U.S. firms is not a good option, assuming such toys and gifts can be found.

For those with sufficient discretionary income, there are continuing ethical problems of buying from companies dependent on sweatshop labor. Recently another trusted brand--The Gap-- has been tarnished by evidence of child labor sweatshop abuse exposed by journalists, forcing them to drop a subcontractor in India: they are shocked, shocked that 10 year olds were virtually enslaved by a lowest-bid contractor. The Gap reassures American consumers that the clothes they sell for Christmas will not include any tainted by this company. There are many roads from the Hollow Corporation and the Hollow Government to a hollow Christmas.

So as Americans cross their fingers and shop for Christmas, they may know that in the companies they once trusted for quality, and in the government they depend on to protect them, there is no there there. They are all hollow.

The eyes are not here
There are no eyes here
In this valley of dying stars
In this hollow valley
This broken jaw of our lost kingdoms

This is the way the world ends
This is the way the world ends
This is the way the world ends
Not with a bang but a whimper.