Wednesday, March 7, 2012

Corporate Subversion of Democracy

You elected those politicians to represent you. Are they, or are they perhaps colluding to enrich themselves by creating a corporate state or, even worse, a fascist state? One of the best clues to this shadowy operation is government facilitation of corporate corruption.

No one, and certainly no government, is perfect, so "perfection"--e.g., the absence of corruption in government--may be a nice ideal but is hardly a realistic standard for daily performance. Therefore, it is perhaps a bit unfair to condemn a government for exhibiting corruption. A more realistic standard for daily performance would be this:

Does the government facilitate or combat corruption in its own ranks and among the broader corporate elite?

That standard is one that separates good governance, i.e., government for the people, from bad governance, i.e., government for the elite. That standard also directly addresses the more particular issue of whether or not a government is moving toward corporatism, i.e., the enrichment of corporate elites at the expense of the society as a whole. That standard also exposes rising fascism, a particularly pernicious form of corporatism.

In this context, consider the recent remarks of muckraking journalist Matt Taibi about Bank of America:

This gigantic financial institution is the ultimate symbol of a new kind of corruption at the highest levels of American society: a tendency to marry the near-limitless power of the federal government with increasingly concentrated, increasingly unaccountable private financial interests....
Conservatives should be outraged by Bank of America because it is perhaps the biggest welfare dependent in American history, with the $45 billion in bailout money and the $118 billion in state guarantees it’s received since 2008 representing just the crest of a veritable mountain of federal bailout support, most of it doled out by the Obama administration.

Liberals should also be outraged. The goal of liberalism is to take care of those who need it, not to feed obese welfare queens. As a liberal, I can testify that government bailouts of rich, corrupt banks violates the ideals of liberals; conservatives can speak to their own values.

Taibi explains:

Conservatives believe that a commitment to free market principles and limited government will lead us out of our economic troubles, but Bank of America represents the opposite dynamic: a company that is kept protected from the judgments of the free market, and forces the state to expand to take on its debts.

Feeding the greed of "too big to fail" corporate welfare queens has become a major financial drain on the U.S. economy; the unemployed and those defrauded out of their mortgages are paying for this. Beyond the financial cost to society of corrupt corporations lies the specter of corporatist or outright fascist subversion of democracy. If the citizens are so generous that they choose to provide welfare to billionaire CEOs, so be it. My concern is far more with the political implications. To put it briefly, the more the regime becomes the financial partner of corrupt corporate leaders, the greater will be their tendency to collude to undermine citizen oversight of their misbehavior, which will inevitably lead to a police state, i.e., a corporatist dictatorship.

It is important to note that the issue of whether or not the government is colluding with the corporate elite to defraud society is a separate issue from government creation of healthy conditions for business. Smoothly running, productive corporations can be useful social tools as long as the government understands that its purpose is to protect the larger interests of society. The string of economic crises (S&L, Latin defaults, Asian tiger collapse, Long-Term Capital Management's collapse) culminating (so far) in the 2008 Financial Crisis--all caused by out-of-control corporate greed facilitated by complicit regulators--does not prove that capitalism is an unacceptable form of government; it does, however, pretty conclusively prove that capitalism in the absence of strict government regulation backed up by energetic popular oversight is suicidal

Now every human with a brain can see that capitalism is a very hot torch; without great care, it will burn you, but socialism--albeit better in theory as, by definition, a system to protect "society" rather than "capital"--has its own problems, which are perhaps best described in Solzhenitsyn's brilliant chapter "The Law As a Child" in Gulag Archipelago, where the collapse of Soviet socialism into communist dictatorship in the absence of a rule of law that would provide regulation over government) is exposed. The fundamental issue is not "capitalism vs. socialism" but whether or not the population has the education, commitment, and capability to keep watch over the elite.

If (a big condition) the citizenry is sufficiently awake to defend itself, the standard approach of a government trying to establish a corporatist dictatorship is to whip up national security fears, wave the bloody flag, and terrify the population into bowing down before a "great leader" who promises to "protect" them. That is the point at which corporatism transforms into fascism, and one of the clearest initial clues that this process has been launched by an elitist regime is government facilitation of corporate corruption.
"Corruption!" is an easy charge to make; is it fair?
  • Bank overdraft scam: BoA settled a court case accusing it of running a bank overdraft scam for $400 million. That may well have been a tiny portion of the total amount stolen from depositors, but even for BoA, $400M would presumably constitute a line item in their budget. Would they have paid such a fine if they were innocent?
  • Mortgage fraud: Three years after the "2008 Financial Attack on the One Percent," the Federal Government is finally bringing legal charges against BoA for mortgage fraud. BoA has already paid a cool $22M to avoid complicity for defrauding...soldiers!!! That is called "corporate patriotism." (Corporations, you recall, are now "persons," so one should presume that they could be expected to be patriotic just like the rest of us "persons," but of course personhood for corporations only pertains at their convenience.)
  • Selling elections. Even the Supreme Court, last defense of the Constitution, has joined the game, twisting the Constitution in its Citizens United v. Federal Election Commission ruling to allow corporations to buy elections. When campaign time on TV is made free and passed out fairly, then we will know that the government is protecting democracy rather than promoting a corporate state.

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