ALEC Exposed: Milton Friedman's Little Shop of Horrors

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Although he passed away in 2006, states are now grappling with many of the toxic notions left behind by University of Chicago economist, Milton Friedman.

In her groundbreaking book, The Shock Doctrine, Naomi Klein coined the term "disaster capitalism" for the rapid-fire, corporate re-engineering of societies still reeling from shock. The master of disaster? Privatization and free market guru Milton Friedman. Friedman advised governments in economic crisis to follow strict austerity measures, combining radical cuts in social services with the full-scale privatization of their more lucrative assets. Many countries in Latin America auctioned off everything standing -- from energy and water utilities to Social Security -- to for profit multinational firms, crushing unions and other dissenters along the way.

Now, U.S. states are in crisis. The 2008 Wall Street financial meltdown, caused by years of deregulation and lack of government oversight, cost Americans $14 trillion in lost wealth and eight million lost jobs. Today some 25 million are unemployed or underemployed. This jobs crisis has tanked federal and state tax receipts, adding billions to state budget shortfalls.

As the prime movers of this deregulatory agenda, the GOP spin machine has launched into hyper-drive in an attempt to wash the blood from their hands. Governors across the nation, backed by Wall Street's Club for Growth and the Koch Brothers' Americans for Prosperity, are working hard to convince average Americans that the jobs crisis is actually a deficit crisis and that the culprits are not the big banks on Wall Street, but state, county and municipal workers.

In lockstep, governors are reaching for an almost identical set of "solutions," to their financial woes: massive tax breaks for big corporations, constitutional amendments to prevent states from raising revenue, the slashing of critical public services, the busting of unions and the privatization of every possible aspect of government including public schools -- long a Friedman agenda item. (See the video here.)

The similarity of these measures has not gone unnoticed, but now we have found the fountainhead of these radical measures: the American Legislative Exchange Council (ALEC).

ALEC Exposed

This week the Center for Media and Democracy made available to the public over 800 ALEC "model" bills and resolutions on a new website, ALECexposed.org. We display the documents, crafted by corporations, and right-wing state legislators behind closed doors, so that citizens across the country can now trace the origins of many of the radical proposals moving in their states. Our site contains lists of ALEC members, corporations, task forces, scholars, funders and more.

Milton Friedman famously said: "Only a crisis -- actual or perceived -- produces real changes. When the crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies to keep them alive and available until the politically impossible becomes politically inevitable." Think of ALEC as Milton Friedman's little shop of horrors where legislators across the country can easily access the "ideas lying around."

ALEC is not a lobby, and it is not a front group. It is much more powerful than that. Behind closed doors, corporations hand legislators the law changes they desire that directly benefit their bottom line. Corporations are "equal" members. They have their own corporate governing board which meets jointly with the legislative board. Corporations and trade groups fund almost all of ALEC's operations directly through hefty membership dues and indirectly through corporate foundations, like the Charles G. Koch Foundation.

Corporations, like Koch Industries, Phillip Morris, R.J. Reynolds, Kraft, Wal-Mart, Bayer, Coca Cola, State Farm and more, sit on ALEC task forces and vote with state legislators to approve "model" bills in secret. They wine and dine legislators at swank hotels, with child care provided, fundraisers and other perks pre-arranged. After a swell time, participating legislators -- overwhelmingly conservative Republicans -- bring the bills home and introduce them into statehouses across the land as their own brilliant ideas and important public policy innovations. ALEC cuts out the middleman and the state legislators themselves become "super lobbyists" for the ALEC agenda.

Disaster Capitalism in the States

In December of 2008, while the economy was shedding hundreds of thousands of jobs a month, one group was treating the catastrophe as a terrific opportunity. Governor Mitch Daniels reminded an ALEC gathering that the collapse of the U.S. economy was "a terrific time to shrink government!"

In 2010, Republicans won the governorship and control of both houses in 21 states. ALEC shock troops swung into high gear. In Wisconsin, Ohio, Michigan, Indiana and Maine a steady stream of bills emerged from Milton Friedman's shop.

Starving State Government of Revenue to Make It Dysfunctional and Despised: ALEC members are introducing hundreds of bills to grant tax breaks to big corporations and cripple state's ability to raise revenue, including new constitutional rules to limiting state taxing powers. Grover Norquist would love these lethal proposals.

Privatizing Schools and Other Government Services: ALEC bills encompass over 20 years of effort to privatize public education through an ever-expanding school voucher system, to turn Medicare and Medicaid into voucher programs, and to privatize almost all aspects of government including toll roads and bridges, pensions, foster care and prisons. Foreign firms like Maquarie and Cintra, which are snapping up U.S. roads and bridges, are also using ALEC to push model bills.

Race to the Bottom in Wages for Americans: ALEC bills would repeal state or local laws that boost workers' wages such as "living wage" and prevailing wage laws. ALEC bills call a starting minimum wage an "unfunded mandate," but think that prison labor is just terrific. ALEC also supports a radical "free trade" agenda that sends U.S. manufacturing and an increasing number of service-sector jobs overseas.

Defunding Traditional Supporters of the Democratic Party: ALEC purports to be nonpartisan, but only 1 of 104 legislators in ALEC's leadership is a Democrat. ALECexposed.org contains dozens of bills to defund public sector and private sector unions, and to make it harder for trial lawyers to bring cases when consumers are injured or killed by dangerous products.

Help Needed!

ALEC's agenda is vast. These bills and many more are moving in all 50 states. We need your help! Visit ALECexposed.org today, see the corporations and legislators pursuing this agenda and help us track the bills moving in your state. Join the conversation on Facebook and Twitter at #ALECexposed and Take Action to tell the ALEC corporate cabal to "Dump ALEC!"