A brief summary of the connection
James Madison [stated] during debate over the U.S. Constitution that the new government would need to protect the wealthy from too much democracy. [The] same theme [is present] in Aristotle but with Aristotle proposing to reduce inequality, while Madison proposed to reduce democracy.
The burst of activism and democracy in the United States in the 1960s scared the protectors of wealth and privilege[, and they responded with] The Powell Memo from the corporate right, and the Trilateral Commission's first ever report, called "The Crisis of Democracy," [...] as roadmaps for the backlash. That report referred to an "excess of democracy," the over engagement of young people with civic life, and the view that young people were just not receiving proper "indoctrination."
Deregulation has produced wealth concentration and economic crashes, followed by anti-capitalist bailouts making for more wealth concentration. Offshore production has reduced workers' pay. Alan Greenspan testified to Congress about the benefits of promoting "job insecurity"
[In] the 1950s and 60s [...] both the rich and the poor got richer. Back then, taxes were quite high on corporations, dividends, and wealth. The U.S. of the 1950s was able to make college essentially free with the G.I. Bill and other public funding. Now a much wealthier United States is full of "serious" experts who claim that such a thing is impossible.
The goal of directing people to superficial consumption as a means of keeping people in their place was explicit and has been reached. In a market economy [...] informative advertisements would result in rational decisions. But actual advertisements provide no information and promote irrational choices. Here Chomsky is talking about, not just ads for automobiles and soap, but also election campaigns for candidates.
The privatization of public services is an ongoing attack on democracy. Corporations are autocratic (or at best plutocratic) because the few at the top have total control over direction. In a public corporation, shareholders have some vote, but only as many votes as they can buy. When a previously public service is privatized the citizens lose democratic control over it. It becomes a vehicle to extract profit. Like the banks who were too big to fail, the profits are privatized but the losses are dumped onto the taxpayer.
And finally, the connection to reducing solidarity. By pushing free trade agreements unions are undermined because labor is not free to move like capital is. If workers strike, the company moves elsewhere. Thus the solidarity of labor is neutralized and workers are made insecure about their jobs (i.e, don't rock the boat or you lose your job). The stereotype of welfare queens is not true, studies show welfare cheating to be very rare; it is Reagan era propaganda to undermine support for the welfare system. Similar stories painting the whole of some population segment in a bad light are common and serve to undermine solidarity, to reduce sympathy at a fellow human's suffering, to reinforce the individualist perspective that these people are cheats or failures, not victims of exploitation or stresses inherent to the social system.
I'm not familiar with Chomsky (and haven't read this paper), but I don't see that connection at all. Could you elaborate a bit more?