Tools of the Rich

The citizens of the U.S. are shortchanging themselves by allowing the super-rich to define taboos in order to prevent society from considering fundamental reforms that might preserve our democracy, enhance our security, and improve our lives...at the expense of constraining the ability of the super-rich to amass more wealth.

Politics in the U.S.—at the level of policy-making—has a degree of rigidity, narrow-mindedness, and short-sightedness that causes enormous harm to the security and quality of life of Americans.  These constraints are self-imposed; more precisely, they are intentionally imposed by the elite to constrain the voters from exercising their full legal democratic rights of popular oversight. Accepted without a second thought, these unstated and unreasoned taboos prevent Americans from taking full advantage of their vast natural and intellectual resources. The result is a set of interlocked policies that needlessly undermine American security and worsen the general quality of life in American society. 

Taboos obstructing honest evaluation of fundamental policy choices prevent American society from moving effectively in new and desperately needed directions. The American system is based on open debate to find answers to complex problems. That is the best system yet discovered for resolving national problems, but it only works when society faces its options honestly. New directions do exist for addressing this set of challenges, but the roads will only be found if we are willing to look for them.

Ironically, these fundamental policy choices—precisely the ones meriting the most meticulous public debate—are typically the public policy decisions made with the least care, the least debate, the least thought. The results include a foreign policy based on military force even when force intensifies hostility; health care as a business rather than a right; environmental policy favoring consumption now rather than preservation for future generations; and an economic policy that has been enriching the super-rich by impoverishing the rest since the Reagan era.

Sure, everyone talks about health care and foreign policy and economics and the environment, but look at content of the debates: it focuses on details. Should we, perhaps, modify the degree of Wall Street regulation a bit (while still leaving the main offenders in business)? Should we, perhaps, talk to international adversaries (in order to get them to do what we previously used the threat of violence to achieve)? Should we, perhaps, add a few soldiers in uniform to your Muslim country of choice or should we use mercenary forces out of uniform (but without altering our goal of suppressing dissent)? Should we, perhaps, pass a new environmental protection law (but without holding corporate executives criminally responsible for their cheating on the laws already passed)? Should we, perhaps, add a sliver of the disadvantaged to the rolls of those favored with health insurance (but surely without endangering the massive profits of the health care industry)?

The basic questions that address fundamental direction are seldom voiced. They are taboo. 

·          A foreign policy of true compromise with reformist Islam is a taboo subject.

·          A health care policy that rejects socialism for the health care industry and institutes socialism for the disadvantaged is a taboo subject.

·          An environmental policy that punishes corporate polluters and preserves the environment (allowing economic functions only within those constraints) is a taboo subject (the recent New York Times expose of corporations polluting the nation’s drinking water notwithstanding).

·          A financial system that puts society first, employing capital only as a tool for the common good by constraining exploitation and stimulating responsible productivity is a taboo subject.

Americans do have certain cultural/political advantages. Perhaps the greatest is the consensus that those who break taboos are not killed, so, yes, I can voice these complaints in safety, something I would not be able to do in, say, China, Saudi Arabia, or Iran. While I am grateful for this, it does not invalidate my argument. Taboos work more subtly in the U.S.: those who violate them may speak; they are simply ignored. In terms of having influence, if you challenge taboos, you will be cut out of the debate, will no longer be heard, will effectively no longer exist except as an official non-person, an “…ist,” as in “racist, socialist, leftist.” In (we imagine) highly stable, albeit tenuous, Neolithic times, banishment of those who broke village taboos by speaking out may have enhanced group survival; in the contemporary rapidly evolving world, by precluding flexibility, observing taboos invites disaster.

The U.S. has an historic power advantage over its adversaries (even after a decade of behaving like a rogue elephant), the best higher education establishment on earth (albeit a very weak primary and secondary education system), and enormous resources. These advantages give American society an incredibly fruitful array of options. That is, Americans have the collective power to do an unimagined range of different things...if they can open their minds sufficiently to imagine taking new directions toward a fundamentally more just and effective society. Whatever the route to a perfect society, we will never find it (or even succeed in treading water in today's volatile world) if we censor ourselves from discussing the basic options about the fundamental direction of public policy.

These taboos do not arise by chance. Examine these taboos and you will see that each prevents discussion of an issue captured by the super-rich. We cannot discuss the fundamental militarist posture of U.S. foreign policy because that would call into question the war profiteering of arms manufacturing corporations. We cannot discuss the relationship between global overheating and energy policy because that would call into question government favoritism toward Big Energy (in turn of course not unrelated to a foreign policy based on force and collaboration with repressive third world regimes). We cannot discuss the idea of health care as a right because that would not just imperil the wealth of Big Pharma but would start a chain reaction undermining the whole concept of putting the incomes of the corporate elite ahead of the common welfare. We cannot discuss the relative merits of a financial system for the purpose of accumulating capital in private hands vs. a financial system for the social good because that would bring down the whole class system in which Americans sadly do not realize they exist…because the strengthening class system is the greatest taboo of all.  Debate is the foundation of democracy; taboos are tools of the ruling class.

The most recent example of how taboos cripple open debate of fundamental social issues is Romney’s blatant effort to reinforce the insidious taboo against discussing class in American society. The reason for this taboo is clear: as long as we are forbidden from mentioning “class” (except to deny the relevance of the concept for our uniquely perfect system), we cannot even ask if class distinctions are getting worse or if the tax code is biased in favor of the upper class or if the upper class (which cannot, by definition, even exist in the U.S.) might possibly be destroying our democracy. And obviously the taboo on discussing classes also conveniently prevents us from seeing the class war that the rich have been fighting with great success against American society for the past generation.

To avoid all such potentially embarrassing discussion, Romney is accusing Obama of running a campaign based on “hatred.” It is way beyond curious that Romney could so neatly have stuffed his foot in his mouth by raising the issue of politicians who run campaigns based on "hatred" just as he decides to put the most mean-spirited man in Washington a heartbeat away from the Presidency.

Romney has handed Obama his response on a silver platter: "Yes," he should say, "this campaign is about hatred." Depriving the most unfortunate while bailing out financial criminals and engorging an obese Pentagon with grossly overpriced weapons designed to defeat an empire that is only visible when Uncle Sam looks in the mirror can go by no better name than "hatred."

Hatred has its uses, and what Americans should hate includes: immoral politicians on the take from the rich to deprive the man in the street just to make the rich richer; big corporations demanding welfare for themselves while denying decent wages to their own employees; financial criminals on Wall St. taking bailouts while designing schemes to defraud homeowners and investors; hypocritical politicians claiming that fleecing the poor to enrich the rich is "patriotism;" war profiteers making $25 million a year who take their corporate headquarters overseas to avoid paying U.S. taxes on the profits they made fighting wars harmful to U.S. national security...wars for which they campaigned.

And so, ironically, I reach agreement with financial fat cat Romney. "Yes, sir. You are right. This election is about hatred." And Obama needs to find the backbone to face the divide between the radical right-wing Republicans (unfortunately, the only breed of Republican still standing) and the American people. It has come to this: there is no longer room for compromise. Our house cannot stand 99.9% slave, 0.1% free. We are at war--the people vs. the super-rich, democracy vs. a class system. Those who equivocate and respect taboos are lackeys of the super-rich. Obama needs to decide which side he is on…or Americans need to vote for the Green Party.

Romney Dares Refer to 'Hatred'?!?

Romney has accused Obama of campaigning on "hatred." Now that he has brought up that particular topic...

It is way beyond curious that Romney could so neatly have stuffed his foot in his mouth by raising the issue of politicians who run campaigns based on "hatred" just as he decides to put the most mean-spirited man in Washington  a heartbeat away from the Presidency.

Obama's response is handed him on a silver platter: "Yes," he should say, "this campaign is about hatred." Depriving the most unfortunate while bailing out financial criminals and engorging an obese Pentagon with grossly overpriced weapons designed to defeat an empire that is only visible when Uncle Sam looks in the mirror can go by no better name than "hatred."

Here's what I hate: immoral politicians on the take from the rich to deprive the man in the street just to make the rich richer; big corporations demanding welfare for themselves while denying decent wages to their own employees; financial criminals on Wall St. taking bailouts while designing schemes to defraud homeowners and investors; hypocritical politicians claiming that fleecing the poor to enrich the rich is "patriotism;" war profiteers making $25 million a year who take their corporate headquarters overseas to avoid paying U.S. taxes on the profits they made fighting wars harmful to U.S. national security...for which they campaigned.

And so, ironically, I reach agreement with financial fat cat Romney. "Yes, sir. You are right. This election is about hatred." And Obama needs to find the backbone to face the divide between the radical right-wing Republicans (unfortunately, the only breed of Republicans still standing) and the American people. It has come to this: there is no longer room for compromise. Our house can no longer stand 99.9% slave, 0.1% free. We are at war - the people vs. the super-rich. Obama needs to decide which side he is on.

From American Dream to American Illusion

Rising government acceptance of corporate corruption, intensifying corporate control over politics, rising preference in Washington for a foreign policy based on force rather than diplomacy, and accentuation of class divisions with rising inequality in the U.S. constitute a shift in direction away from the post-WWII growth of the middle class and democracy. The decline in the prospects of the average American have been so slow that most seem unconscious of the change, but in the space of one generation, the American Dream has been transformed into the American Illusion. 

The Enemy of Society

U.S. society remains, despite war and recession, sufficiently comfortable and deluded so that it refuses to face up to the harm it is suffering from allowing its pro-business/anti-people system to continue to exist. It is not necessary to eliminate business, which is a useful tool, but when that tool is transformed by a misguided elite into an idol existing not to benefit society but for its own sake, then the fundamental shape and values of society are warped, and the tool becomes a weapon employed by rich CEOs to plunder the wealth of everyone else. The solution is to create institutions that serve, not exploit.

Class War in America

The super-rich have launched a class war against the people of the U.S., a war that, for most of our politically naive population, was revealed only with the Financial Crisis of 2008, yet the super-rich continue to gain ground. An extraordinarily clear statement describing how this class war against America is being fought was given in testimony before Congress on July 10, 2012 by Dennis Kelleher, President and CEO of Better Markets, Inc. His statement is invaluable in outlining concisely what occurred and forecasting in detail the likely consequences of a continued failure of Washington to start representing the interests of, not corporations and the super-rich, but the American people. Every word is worth reading. What follows is just the outline.

The Meaning of Being 'Pro-Business'

Words, these days, lack straightforward meanings, but the meanings are nevertheless there, and you can understand the meanings if you try. Consider the loaded phrase "pro-business."

Superfluous People

Washington is run by and for rich businessmen. When politicians brag about being "pro-business," they really mean favoring rich executives, not the millions of workers who form the productive core of business. From this attitude flows an essentially predatory foreign policy; what we should all have learned from the Financial Crisis of 2008 and the reaction of Washington (under both major parties) to that crisis is that a business-friendly elite of the rich will, in the end, have the same attitude toward the people of U.S. society as it does toward the struggling poor everywhere else.

Bankers Take Welfare, Let America Rot

Whether the bankers who so crippled the American economy end up being punished for their irresponsibility or not, the harm they caused is worsening, not improving, and we are setting ourselves up for a real collapse the next time around. Perhaps the key battle won by those of the super-rich who survived 2008 was the decision by Washington to "save the system" by saving the bankers at the expense of throwing away the victimized homeowners, leaving unanswered the question, "Why would bankers holding millions of mortgages want all that property in foreclosure and rotting away?"

Inexpedient Government

If "that government is best which governs least," the absence of transparency on the part of officials is the best clue that the government needs to be slapped down.

Government is inexpedient, but since we are far from prepared to manage without it, let's try to direct its awesome power at the target of achieving the common good.

I heartily accept the motto, “That government is best which governs least”; and I should like to see it acted up to more rapidly and systematically. Carried out, it finally amounts to this, which also I believe—“That government is best which governs not at all”; and when men are prepared for it, that will be the kind of government which they will have. Government is at best but an expedient; but most governments are usually, and all governments are sometimes, inexpedient.  ["True Conservatism" in Historical and Literary Lessons 5/20/12.]

Thoreau merits careful consideration: we can agree with him that were we wise enough to conserve our values through our joint actions day by day, then perhaps small government would be best. Until that nirvana on earth be attained by society, however, Thoreau's counsel is best accepted as true only in theory. In practice, a wiser rendition would be, "That government is best which governs to the minimum required for the common good."


Problems, of course, rear their ugly heads before the words leave my fingertips. Given a government so powerful that it can defeat an enemy intent on conquest, how can we prevent the officials of such government from intimidating us as individual citizens? Given a government so powerful that it can break up a financial monstrosity that manipulates trillions of dollars in secret bets, how can we prevent the officials of that government from accepting a few billion in spare change in return for pretending they cannot see the monster?

Thanks to Juan Cole, Informed Comment. 

Transparency.    Politicians have a pretty good idea whether or not what they are doing is appropriate: if they have expertise in nothing else, politicians certainly have expertise in detecting opportunities to conduct the public business for their personal advantage. When an official hides information, it is almost never for national security reasons, almost always to conceal behavior that the official knows full well was inappropriate. In a democracy, the public interest is rarely served by concealing the behavior or true reasons behind the behavior of officials. There are of course exceptions, perhaps the main one being a situation where a weak state under the threat of attack defends itself by pretending to be more powerful than it is. For a secure state, however, "national security" is a claim designed to protect the guilty far more often than to protect the public. Lack of transparency by officials constitutes prima fascie evidence of guilt and serves as society's alarm bell.

Government has justification for existing to the degree that it functions on behalf of society and with the permission of society. It is just so much nonsense to accuse the government of "being too big" or "interfering too much" without finishing the thought. If the government overwhelms healthy social activities, it is too big; if it fails to regulate socially harmful private interests, it is too small. The self-serving nature of many complaints accusing government of being "too big" would be quickly revealed if the critics were forced to complete their thoughts. 

Wall St. CEO: "Government is too big; it is preventing me from making billions without paying any taxes!"

Big Oil Executive: "Government is too big; it is preventing me from poisoning the air I don't own to pad my pocket!"

Racist: "Government is too big; it is subsidizing the education of minorities!"

Rich man: "Government is too big; it is offering health care to sick people who aren't even rich!"

We may agree with Thoreau that in principle, small government or no government would be best...once humans are ready for such liberty. In the meantime, what matters is not size but quality, and transparency is the essence of good governance.  It is not the size of the government but its transparency that indicates the citizenry needs to take disciplinary action.

Regulating Yourself

The presence of J.P. Morgan's Dimon on the New York Fed board symbolizes the continuing fraud of a financial system in which police are magically unnecessary because the perps ensure their own honesty.

Twenty-First Century Class War

The economic ship of the West is dead in the water because the wind of social egalitarianism that has blown strong since the New Deal and victory over fascism has been replaced by a new class war by the uber-rich.

The uber-rich of the extreme right has decided to abandon the New Deal compromise and launch a class war against the 99%. This is not ideological hot air. Protection of rich financial criminals, bailouts of fraudulent corporations, planetary environmental poisoning, the intentional promotion of bubbles, the exploitation of natural and political disasters to further enrich the rich, and direct attacks against democracy to suppress public criticism that might "embarrass" the rich constitute the 21st century weapons of choice for class warfare. Wealth should be built on a rich society, not the zero-sum game of the rich stealing from the poor. This paragraph is a huge accusation of unpatriotic behavior and deserves extremely careful analysis, which is indeed being done by numerous specialists and protest groups, but perhaps a few points are worth spelling out here:

Oil-Poisoned Turtle, Courtesy of BP, an "Innocent Corporate Person"

• when an oil corporation is allowed to walk away free after poisoning a significant portion of the world's best fishing territory, endangering the livelihood of thousands of fishermen and wrecking the very genetic foundation of life itself, the economy has been undermined in a way that, for those of us alive today, effectively amounts to permanent damage: we can never be that rich again;
• when gambling with other people's money and doing so under false pretenses becomes not just a fraudulent fad but the primary path to self-enrichment, society is little more than a junkie seeking his next high;

Torturing the Unindicted, Courtesy of the Neo-Cons

• when an imperial project to shore up superpower control over other societies that aspire to independence, not to mention grabbing their resources, goes to the extreme of destroying their whole society, the whole world has been impoverished;

• when a country behaves with such viciousness, it harms itself, a conclusion all the more true when that country is a democracy that aspires to lead the world by example;
• when government oppresses free speech to protect fraudulent corporations from being publicly criticized.

Such is class war in the 21st century.


If you still think that "fraud," i.e., criminal behavior, is too strong a term for the broad behavior over the last decade of the financial elite of the U.S. on Wall St. and in the home mortgage industry or if you do not think Washington is complicit in this fraud, consider this:

Fraud does not even make Geithner’s list of contributing factors to financial crises.  The U.S. has experienced three recent financial crises – the S&L debacle (which is the subject of this first installment), the Enron era frauds, and the ongoing crisis.  Accounting control fraud is the leading cause of each of the crises.  “Control fraud” is the term white-collar criminologists use to refer to frauds in which the person controlling a seemingly legitimate entity uses it as a “weapon” to defraud.  Accounting is the “weapon of choice” for elite financial frauds.  Control frauds cause greater financial losses than all other forms of property crime – combined. [William Black on New Economic Perspectives.]

The latest case in point is the effort by Bank of America to resist stockholder demands that it review its own foreclosure practices! 

The New York City pension funds and 9 other institutional investors are urging Bank of America to conduct a thorough review of its foreclosure practices and report the results to shareholders. BofA has been plagued by widespread allegations of fraud in the foreclosure process, with a report from the Inspector General at the Department of Housing and Urban Development finding that the bank's management was involved in the improper foreclosure practices. BofA management opposes the shareholder resolution that would require a review of foreclosure practices. [Huffington Post 5/9/12.]

Demanding that BOA officials be jailed might, indeed, meet with resistance on the part of those officials, but why would they resist calls for them to conduct their own internal reviews...unless they were already well aware they had plenty to hide? 


The key to solving the problem is for Americans to realize that war abroad and theft at home are two sides of the same class war coin. Socially conscious domestic policy  (policy designed to care for the 99%) does not fit well with a foreign policy based on force. Such a combination would constitute a self-contradictory combination. To put it simply, leaders of imperialist campaigns see citizens as cannon fodder, not those they serve. Moreover, force (more specifically, the American way of high-tech war) is expensive.


Were the uber-rich (e.g., Romney, the Koch brothers, Mozillo, the CEO's of the horde of war profiteer corporations like Halliburton, and the officials of Big Oil) to pay their fair share for their privileges, enormous strides toward bringing America back could be made. There is much to be done - creating a world-class solar industry, cleaning up New Orleans...


Unfortunately, the Obama Administration remains stuck in essentially a neo-con foreign policy of playing a zero-sum game of U.S. supremacy at the expense of justice for Muslim societies and a "neo-liberal" (i.e., very conservative, exploitative) domestic policy of protecting billionaires at the expense of society.

Voting for the National Interest...and Yours

Unless you happen to be a multi-millionaire living only for today and with your money carefully hidden off-shore, understanding the "national" interest is easy; it is the same as yours.

Our National Interest

“National interest” justifies every crime in the book, right? Well, not exactly. You and I, and our neighbors are the nation, and if the latest scheme hurts all of us, then whatever the billionaire or the politician wants is not in the national interest.

Standards of Behavior for Officials

Democracies will never function well until standards of behavior for officials are defined and the officials are held accountable for meeting those standards. Yearning for honest officials may be naive; demanding the public definition of required standards of behavior is not. Far better the implementation of strict standards of behavior for officials than to suffer "a long train of abuses and usurpations" leading to "absolute Despotism." 

I posed a very rude question on this blog yesterday, but rude or not, democracies need to wrestle with such questions. Today, let's approach the issue of the quality of governance more gently with another question:

Do democracies need to hold public officials to standards of official behavior?

By "official behavior," I refer to the acts they take as officials, rather than in their private lives.

Imagine some surely imaginary scenarios, such as a leader who lies to the people about his reasons for launching a war of choice or a general who lies (either to the people or to his commander-in-chief) about how well he is managing his campaign during a war, or a leader who whips up a war fever for some private agenda. These are, by any reasonable moral standard, truly criminal acts, acts that either cause or greatly risk the deaths of thousands. The worst acts of what we are pleased to call "terrorism" ever known pale by comparison with such crimes. Yet, the leaders of democracies are almost never punished for them. Indeed, it is not even clear if they are technically "illegal."

By what standard would guilt even be proven in court? Suppose a politician makes his career by calling for war, year after year, against some antagonist that never attacks, claiming that a threat nevertheless exists and walks, year after year, smiling to the bank with billions in foreign military aid from a naive patron. Were such deception ever to occur, how would one prove it? He can always claim he really believed there was a threat and that it was precisely the military aid that prevented disaster.

The problem of creating standards of behavior for officials in a democracy is not a simple one. "Let the voters decide" clearly does not work; the voters almost never choose to educate themselves sufficiently to make informed decisions and, indeed, hardly can, given the collusion between parties and by the media, not to mention the fog of classification under which every official act is buried for the protection of the guilty. (And, by the way, I actually do know that some secrets are worth keeping, but these are few and far between, while the secrets to prevent the voters from educating themselves about official guilt are all-pervasive.)

But even the attempt to define standards would at least put officials on notice and perhaps attract public attention to the difference between official claims and reality. We have standards for bank clerks and engineers; why not for the men and women who have their finger on the nuclear button? Just for one (surely imaginary) example, imagine a general conducting a foreign campaign who claims he is making progress when statistics indicate that enemy attacks are increasing. Or imagine a regime that hands billions of dollars of aid to rich financial corporations deemed "too big to fail" without A) accounting publicly for what the welfare recepients do with those taxpayer funds or B) holding the CEO's of those corporate welfare queens accountable for the actions that led to the need for the welfare in the first place. Might one be able to define a simple standard of behavior such that these acts could be found, in a court of law, to be punishable crimes?

I dare say, one could, and I would further propose that a set of standards be defined and that all officials above a certain grade automatically have their careers reviewed by, say, the Supreme Court before retirement to determine whether or not grounds for referral to the Department of Justice might exist, with both their right to further government office and their pensions withheld pending a decision.

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:
"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.

Connecting the Dots: War Profiteers Target Iran

The pro-war political propaganda of a defense industry booster firm reveals one way that war-profiteering corporations promote international tension and war for private gain.

The formula is pretty simple: 

Arms Factory + War-Mongering 'Independent' Propaganda = $$$.

Once you have a factory that makes weapons, buy yourself an “institute” that churns out “academic” analyses of world affairs designed to wave the bloody shirt. Either you win by selling Washington arms that will sit and rust somewhere or Washington will actually use those weapons, in which case you win again by expanding your market and also by opening a sub-division to rebuild the country you just helped destroy.

Forbes has described the now scandalous process by which think tanks are degenerating into glitzy propaganda arms of the military-industrial complex: 

in Washington, think tanks are becoming so political that they are more like lobbyists than academic institutions…. 

the pressure on researchers to conform to partisan political objectives is going to become even more intense, and if they are going to be expected to function as de facto lobbyists they are going to expect to be paid like lobbyists, which will ratchet up pressure to raise money from those with a purely bottom-line perspective. I fear that honesty and truth will get more and more lost in the process.

A simple example of how this is currently pressuring the U.S. into war against Iran follows.

In a highly biased piece of war-mongering propaganda, the Lexington Institute, which was described by Harper’s as “the defense industry's pay-to-play ad agency,” is beating the drums for a war on Iran. The Institute dismisses claims that Iran is several years away from a bomb as an “Obama Administration” claim that “may be irrelevant,” (which of course also means it may “be” relevant), carefully avoiding the fact that it is not only the Administration but numerous military/intelligence officials in both the U.S. and Israel who consider Iran years from the bomb, not to mention considering the idea of attacking Iran bad for U.S. and Israeli national security.

The Institute then tosses in the standard scare tactic that “Once Iran’s nuclear infrastructure is rendered bomb proof then the world’s only recourse will be sanctions." God forbid that the world turned to the recourse of persuading Israel to relinquish its demands for military dominance over the Mideast (that truly irritates Iran) and the colonization of Palestine (that opens the door for Iran to interfere in Levantine affairs) or that the world turn to the recourse of actually negotiating a positive-sum solution to the broader U.S.-Iranian strategic argument. Oh, no, threats and some sort of war--be it intel, military, terrorist, or economic—will be the only solution.

After admitting that an Israeli attack would not destroy the Iranian nuclear infrastructure and would provoke terrorism, the Institute nevertheless argues that Israeli aggression would have its benefits. An Israeli non-nuclear attack, the Institute broadly implies, would warn Iran that Israel might consider a nuclear attack! Now there’s some good news for all us war profiteers! And even if Israel doesn’t attack at the moment, that’s OK too – just gives the U.S. more time to arm Israel with the long-range Arrow 3 interceptor “specifically designed to go after Iranian ballistic missiles.” The bottom line is clear: for the offense industry, the threat of war against Iran is good news however you look at it.
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READINGS:


Must-Read War Profiteers website.


See this report for the latest on corruption of Halliburton/KBR.


For the other side of the coin, Iran's military-industrial complex, see here. The money quote:

the IRGC is not only an army, but a monster conglomerate with myriad military-industrial, economic and financial interests. Top managers - and the array of enterprises they control - are bound to the ethos of antagonising the West, the same West from whose sanctions they handsomely profit. So, for them, the status quo is nice and dandy - even with the everyday possibility of a miscalculation, or a false-flag operation, leading to war.

2010 Congressional Report on Contracting Fraud in Afghanistan and How It Endangers U.S. Forces

Corporate War At Home and Abroad

If a simple explanation suffices, perhaps one need not look any further, and the simplest explanation for the rush to attack Iran is greed.

Meir Dagan, recently retired head of Mossad, is on a campaign to prevent an Israeli attack on Iran. And now, the New York Times reports:

American intelligence analysts continue to believe that there is no hard evidence that Iran has decided to build a nuclear bomb.

Mossad says no; U.S. intel analysts say no. So, why are so many politicians trying to start a war?

Follow the money. The U.S. political system is increasingly under the control of major corporations. Corporations exist to make money; they do not possess “patriotism” or, indeed, any other “feelings.” Why would they? You did not think they were people, did you?

Now consider how Iran looks to a major U.S. corporation…say, a corporation that makes its money rebuilding infrastructure destroyed in a war, a corporation that buys drinking water systems or telecommunications systems or petroleum production facilities or…oil. Considering the profits such companies made from the attack on Iraq (also see here), imagine the profits they would make from rebuilding a destroyed Iran, a country three times as large.

The links between corporate war profiteering when the U.S. attacks another country and the behavior of such companies toward the American public are worth careful contemplation. Cheney’s company Halliburton went on from enormous Iran war profiteering (and was accused by the Pentagon’s top auditor of widespread fraud) to contributing to the poisoning of the Gulf of Mexico, according to the presidential oil spill commission. More recently, Halliburton has been thumbing its nose at rising American popular and government concerns about natural gas fracking to the point of being the only company contacted by the EPA for information that refused to cooperate until served with a subpoena. When corporations are given blank checks for abusive behavior overseas, they naturally assume they can behave the same inside the U.S.

And as for the Israeli connection, the Israeli economy has been completely transformed since the good old kibbutz days into a super-high-tech economy targeted at such applications as security and outright arms exports. Israeli security exports have risen from $2 to $7 billion since 9/11, according to the Israeli Defense Ministry, which cited the U.S. wars in Afghanistan and Iraq as sources of its profit. Despite an over-reliance on high-paid contractors so costly that even General McCrystal criticized it, the army of U.S. mercenaries remains on station in both Iraq and Afghanistan, and not only Israeli companies but Israeli companies with close ties to Israeli military/intelligence circles, are attempting to participate. European countries, including Germany, are also using Israeli military equipment in Afghanistan. U.S. wars in the Muslim world have become a crucial economic pillar of the Israeli state.

The rising number of current and recently retired U.S. Israeli military/intelligence officials who have found the courage to speak out publicly against an unprovoked attack on Iran as a danger to the two countries’ national security are fighting against a tsunami of economic self-interest in war profiteering.

Shooting Ourselves in the Foot

Human nature creates crises: the safer, smoother, more stable things are, the more risk people will take, sooner or later wrecking all that stability. Despite the outpouring of analyses of the 2008 Financial Crisis, it remains unlikely that society has internalized this lesson about the ever-present threat of human nature even as regards economic crises, however obvious the message may be. How much less likely is it that we are anywhere close to protecting ourselves from self-inflicted political crises?

We all are now aware that the shortsighted, selfish behavior of a few millionaires on Wall Street, a few politicians, some compliant regulators, and--truth be told--more than a few of the "other 99%" looking to cheat their neighbors for a quick buck can combine to generate a financial tsunami. It's not about foreigners. We are our own worst enemy. What most complacent and confused Americans fail to understand is the degree to which we make our own international political crises as well. From the American War in Vietnam to the Global War on Terror to the looming war against Iran (backed by Russia, China, and maybe Pakistan), the U.S. has the power to take the initiative and create these disasters but lacks the power to resolve them in a beneficial manner.

Note clearly that this discussion concerns “self-inflicted crises,” those resulting from the conscious choice to engage in unnecessarily greedy behavior. A crisis caused by an external force, human or natural, lies outside the discussion. Here the concern is on a class of crisis caused by perfectly avoidable human greed leading to obviously risky behavior (in effect, investing in a chain letter). To put it differently, the class of crises of interest here is a class for which one should expect the guilty to be named and punished (both by the judicial system for crime and by God for their sins).

Since everyone is now thinking about utterly unnecessary and egregiously man-made financial crises even as we are hit by repeated utterly unnecessary and egregiously man-made political crises, a question that seems timely and useful flows from the above paragraphs:

Can our recently learned lessons about financial crises help us to avoid political crises?

In The Black Swan, Taleb reports an alleged pattern of economic risk-taking:

The economist Hyman Minsky sees the cycles of risk taking in the economy as following a pattern: stability and absence of crises encourage risk taking, complacency, and lowered awareness of the possibility of problems. [78.]

Nouriel Roubini, the economics professor who predicted the 2008 Financial Crisis in brilliant detail, described the “vicious cycle” of economic crises as consisting of [once I delete the economic adjectives] the following steps [Nouriel Roubini and Stephen Mihm, Crisis Economics 18.]:

1. Worries drop;
2. Costs fall;
3. The bubble drives growth;
4. Increasingly risky ventures are undertaken.

Applying this abstract vicious cycle (to which I would simple add the obvious final step—collapse, i.e., the point at which the cycle ends...with a bang) derived from economics to international relations is suggestive. Whether in economics or politics, the dynamics of the bubble of greed are frequently equivalent. In the aftermath of 2008, the point as regards economics must be obvious to all, whether they have read Marx, Keynes, Minsky, and Roubini or not. Every poor, naïve, uneducated (or just greedy) homeowner who took out a mortgage that he or she obviously could not afford and has now lost that home is today an expert in bubble economics and the danger to us all posed by unregulated capitalism.

But international politics is harder to see clearly through the fog of greedy politicians who classify information to prevent the voters from learning the truth and who wave the bloody shirt of foreign “menace” to promote their careers. Language too helps to obfuscate. We do not talk of “imperialist bubbles.” But if one abstracts to clear away the clutter of detail, the dynamics of greed, willful denial, moral hazard, and willingness to risk—even promote—“collateral damage” in so-called Global War on Terror looks like nothing so much as the 2008 Financial Crisis. Leaders became increasingly confident that they could not be stopped, with their appetites for new victories, new wealth, and new power rising apace. As the new policy—be it the issuance of new securities based on sub-prime mortgages or military adventures in yet another Muslim society—proceeded without major defeat, each new venture seemed less and less costly. Every small gain was used to justify a larger gain, every small risk to justify a larger risk. Even when the risks were seen, they were dismissed; after all, it was the poor who would suffer from unemployment and foreclosure…or death on the battlefields of Iraq and Afghanistan, and in the case of the wars, most of those poor were foreigners. Moreover, like the Wall Street firms bailed out by politicians generous with taxpayer funds, the White House was “too big to fail.” Like Wall Street megabanks, the White House knew it and took advantage of it: moral hazard gone wild. Like big bank CEOs, presidents and vice presidents are almost never held criminally accountable in court for their sins. And then suddenly, the financial/imperial party was over, and the victims were left to clean up the mess.

In the abstract the pattern of failure is clear: failure of the people to carry out their democratic responsibility to monitor their leaders, arrogance, abuse of power, denial about the risks, corruption, lack of concern about collateral damage, and moral hazard.

As long as society trusts those in power, the powerful will abuse that trust for personal advantage, be it the selling of bad securities or the selling of bad wars. The more society is willing to countenance collateral damage to workers driven into unemployment and homeowners foreclosed, or Muslim wedding parties bombed and Muslim societies denied the right to civil liberties and national independence from the globalization avalanche, the more the rich and powerful will hold parties at the expense of everyone else. Bubbles are very good business for those who create them. “They” will never stop doing so until “we” put in place the moral strictures, legal regulations, and judicial holding to account necessary to stop them. But it is not that simple, for many of “us” were tempted to buy houses we judged we could flip into the hands of a more naïve neighbor to skim an unfair profit; many of “us” looked the other way while innocent Muslims across the globe were slaughtered in the name of global war to retain all the undeserved special privileges that make possible a rich life in a poor world. So in the end, the old saying is true: we get the government we deserve.