June 23, 2011 § 14 Comments
Whether Obama retains the White House in 2012 or a Republican wins, nothing much will change. The evidence is overwhelming.
It no longer matters who sits in the Presidential seat or in Congress — unless, of course, the Republican is Newt Gingrich, the extremely nasty former Speaker of the House who wrote a doctoral dissertation excusing the brutal colonization of the Congo, or the absolute dizzy opportunist, Michele Bachmann , who is convinced that CO2 is a natural byproduct of nature.
But even if the intellectually challenged Sarah Palin were to win, all candidates will succumb to the law of the land: the state and the corporation are the main sponsors and coordinators of an “unprecedented combination of powers distinguished by their totalitarian tendencies, powers that not only challenge established boundaries — political, moral, intellectual, and economic — but whose nature it is to challenge those boundaries continually, even to challenge the limits of the earth itself,” says Sheldon S. Wolin in Democracy Inc: Managed Democracy and the Specter of Inverted Totalitarianism. The Kock Brothers’ exertion is a perfect example. Thus, all candidates — in the White House and Congress — must adhere to the demands of this imbalance of power that invents and disseminates “a culture that taught consumers to welcome change and private pleasure while accepting political passivity,” argues Wolin.
We live in less democratic times; we wallow in a “collective identity” that is imperial rather than republican. The consequence is that we interiorize an artificial vision of civilization created by the political coming- of – age of corporate power and its concomitant myth making apparatus.
Inverted totalitarianism … while exploiting the authority and resources of the state, gains its dynamic by combining with other forms of power, such as evangelical religions, and most notably by encouraging a symbiotic relationship between traditional government and the system of “private” governance represented by the modern business corporation.
Let’s take a look under the hood at the engine that runs the inversion of power in our current ideological state apparatus.
The top 5 contributors to the 2010 campaign committee of Eric Cantor, the majority leader of the US House of Representatives, are:
- Comcast Corp, who actively lobbied “net neutrality” legislation, FCC programming issues, and general telecommunications issues. In 2010, Comcast focused its lobbying efforts on a getting a merger between Comcast and NBC Universal approved by the federal government. People and political action committees associated with Comcast Corp. together generally favor Democrats when it comes to political campaign contributions. The monopolization of expression.
- McGuire, Woods, et al –recently represented BVT Institutional Investments in the sale of 10 shopping centers located in Florida, Texas and Georgia. The $130 million transaction was one of the country’s largest retail real estate transactions of 2011 and marks the conclusion of McGuireWoods’ representation of BVT in connection with its U.S. Retail Income Fund VIII portfolio & in the Ninth Circuit Court of Appeals held that the whistle blower provisions in Section 806 of the Sarbanes-Oxley Act of 2002 (SOX) do not protect employee leaks to the media. Rather, the statute’s plain language protects only disclosures made to federal regulatory and law enforcement agencies, Congress and employee supervisors. McGuireWoods, defending Boeing, moved for summary judgment on the grounds, among others, that SOX does not protect complaints and disclosures to the media. The District Court agreed and dismissed the case. On appeal, the Ninth Circuit affirmed.
- Dominion Resources — Electrical Utilities, Gas and Electric
- Goldman Sachs — we know who they are, all the way to their involvement in the Obama administration and their creation of financial instruments that lead to the recession, the demise of the American economy
- Blue Cross and Blue Shield, through its 45 local chapters, the Blue Cross/Blue Shield Association provides health care coverage to more than 80 million people. Blue Cross/Blue Shield also has a contract with the federal government to review and process Medicare claims. The association proved to be particularly active lobbying Congress during the health care reform debates of 2009 and 2010. It has also lobbied Congress to make it harder for the government to penalize companies if their employees defraud the Medicare program and process false claims. Local Blue Cross chapters have paid about $340 million to the federal government to settle Medicare fraud charges since 1993.
The next 15 contributors to the Cantor camp follow the same pattern — KKR & Co, which sees itself as the leading global alternative asset manager, Guardian Life Insurance Company, New York Life Insurance, McKesson Corporation, pharmaceuticals and health products, and so on. We get the picture: insurance companies, lawyers, financial firms — banks too big to fail — tobacco (Altria Group, the world’s largest), pharmaceuticals. Representative Eric Cantor has reported a total of 2,849 contributions ($200 or more) totaling $3,057,540 in the current cycle.
Who is Cantor listening to? Cantor is an example of the “tendencies of our system of power that are opposed to the fundamental principles of constitutional democracy. Those tendencies are, I believe, totalizing in the sense that they are obsessed with control, expansion, superiority, and supremacy,” says Wolin.
Let’s look at another leading figure, John Boehner, Speaker of the United States House of Representatives, elected to represent the Eight Congressional District of Ohio for an 11th term in November 2010, raised $9,796,947. His five leading contributors are AT&T, Murray Energy, First Energy Corp, American Financial Group and the Boehner for Speaker Committe. The top industries contributing to the Boehner effort are: Retired, Securities & Investment, Insurance, Electrical and Health Professionals.
Boehner’s portfolio is just about identical to Cantor’s. Major international companies have their hold on the two top leading Republican leaders. The tragedy we are currently living is that we seem unaware of the deeper consequences of these relationships. “We are experiencing the triumph of contemporaneity and of its accomplice, forgetting or collective amnesia,” Wolin tells us. “Stated somewhat differently, in early modern times change displaced traditions; today succeeds change. The effect of unending change is to undercut consolidation.” If we take a look out our front doors, take a walk down the block, in our cities and in our villages, we can taste “undercut consolidation.” It’s everywhere — city and state workers, public institutions, the NBA, the NFL; neighbors don’t know who their neighbors are; hope is on a tightrope, the future bleak.
The Democrats don’t fair much better. The top Democratic donors are ActBlue (composite of many, many small, grassroots donations), the International Brotherhood of Electrical Workers, Laborers Union, Machinists/Aerospace Workers Union, EMILY’s List (composite of many, many small grassroots donations), Plumbers/Pipefitters Union, National Assn of Letter Carriers, Ironworkers Union, United Auto Workers, United Transportation Union, American Postal Workers Union, UNITE HERE, AmeriPAC: The Fund for a Greater America. This suggests that unions are the primary donors.
But a closer look tells a different story. Let’s take Harry Reid, the Majority Leader of The US Senate. In the 2005-2010 campaign cycle, his re-election committee raised $24,815,104. The top 5 contributors were MGM Resorts International, Weitz & Luxunberg, mesothelioma and asbestos lawyers, Girardi & Keese, trial lawyers, Simmons Cooper LLC, also specializing in mesothelioma and Harrah’s Entertainment, hotels, resorts and casinos.
The top 5 industries contributing to the Reid campaign are lawyers, Securities & Investment, Lobbyists ($1,052,801 total!), Real Estate and Health Professionals. Reid is a carbon copy of Cantor and Boehner — so what, in fact, is the difference, unions under attack because we need change?
In American’s Future After an Obama Victory, which I wrote in 2008 during the presidential campaign, before turning to Wolin, I was already suggesting that the Obama Administration was going to be challenged forcefully by the extremes in our culture. The last 3 years give us plenty of evidence. Obama has followed, even energized Bush policies in Iraq and Afghanistan (think drones), education and healthcare (think privatization and insurance lobbyists), energy and, sadly, race.
Obama’s victory in the general election was aided by his tremendous fund-raising success. Since the start of 2007, his campaign relied on bigger donors and smaller donors nearly equally, pulling in successive donations mostly over the Internet. After becoming his party’s nominee, Obama declined public financing and the spending limits that came with it, making him the first major-party candidate since the system was created to reject taxpayers’ money for the general election.
The top supporters of Barack Obama were the University of California ($1,591,395), Goldman Sachs ($994,795; note the connections to his staff: Summers [World Bank, President of Harvard that nearly bankrupted the endowment], Rubin [spent 26 years at Goldman], and Paulsen [former CEO of Goldman], all of whom influenced Geithner [worked for Kissinger, IMF Director of Policy Development and Review Dept, and President of the Federal Reserve Bank in New York]), Harvard University ($854,747), Microsoft Corp ($833,617), Google Inc ($803,436).
This list of contributors to Obama continues unabated — and all other contenders pale by comparison: Citigroup (who laundered Mexican cartel money), JP Morgan Chase, Time Warner (Patrick Leahy, another top Democrat, was Time Warner’s largest recipient, 2009-10, $61,400). Of the top 20 contributors to the Obama effort, 4 are universities, and the rest fall in step with the ongoing search, by the corporation, for opportunism (which is not to suggest that the new corporate university is not after the same). “Opportunism involved an unceasing search for what is exploitable, and soon (following a trajectory since WW II), that meant virtually anything, from religion, to politics, to human well-being,” says Wolin. “Very little, if anything, was taboo, as before long change became the object of premeditated strategies for maximizing profits.”
This is where we find ourselves today — in the name of change we are unchanging in the face of an uncompromising corporate will. The corporation owns the House and the Senate. These folks, our elected officials, are spokespersons for the corporate elite. If we wonder why CEO’s make so much money, this is why. If we want to know why education is being dismantled and privatized, benefitting the upper classes, this is why. The dissolution of collective action is here, too. The privatization of schools. And the increasing gap between the wealthy few, the middle class and the poor is here. Our forgotten communities, Newark’s South Ward, the South Bronx, Compton, others — it’s all right here in this negotiation between corporations and our officials.
And since we’re now on the verge of a troop withdrawal from Afghanistan, private security firms are smiling. Is this the world we want? It’s already just about out of our hands.
Though I’m speaking to deaf ears, knowing full well that I write to no one, as I speak, the NRC (US Nuclear Regulatory Commission), that boasts it’s “protecting people and the environment,” in an unprecedented move, voted 3 – 2 to advise the Obama Justice Department to intervene on behalf of Entergy Nuclear in the company’s lawsuit against the state of Vermont. Vermont wants to shut down Vermont Yankee, the aged nuclear power plant. A government agency that is solely responsible for the nuclear safety is extending its sphere of influence and advising the Federal Government to intervene in a state’s negotiations with a private entity. How is that not inverted totalitarianism? What about us, the people of Vermont?
The tragic story is that this inversion of power is happening while citizens go on with their lives not conscious of the consequences.
The Economics of Legalized Corruption and the Consolidation of Power: Some Historical and Critical Realities Behind the Bail-Out
September 28, 2008 § 5 Comments
for Adeeb and his fellow classmates, and others who live these ideas and topics in our troubled times
I often cite Napoleon’s famous words to my students, “Dress me slowly I’m in a hurry.” Students, particularly American students, often look puzzled. What does that mean? How can you go fast by moving slowly? How does approaching the world by proceeding with little or less than usual speed or velocity, requiring a comparatively long time for completion and contemplation, enable better solutions to immediate problems?
American culture is addicted to many things but mainly to sugar and speed, anything labeled “new” and deception. William Burrough’s Naked Lunch was viewed as obscene and censored not because of wild pictures of dark characters shooting up but because it demonstrated American’s obsessive compulsive addiction to anything. Power, sugar, horror, violence and destruction, speed, the “new” as well as the decadent, and corruption.
The current attempts by the US Government to bail-out our banking system has all the markings of an addicted culture that in fact enables corruption through laws meant to protect only the wealthiest–the property of the wealthiest. “Corruption is why we win.“
We are now rushing into yet another scheme laid out by those that raced into Iraq and who left Afghanistan in the dust; these are the same folks that can’t work to make our education and healthcare systems stronger and better for all Americans; the same people that can’t run Amtrak.
This is perhaps the reason why the Paulson and Bernanke proposal to stem the financial crisis is a plan “that everyone can find something in it to dislike. The left accuses it of ripping off taxpayers to save Well Street, the right damns it as socialism; economists disparage its technicalities, political scientists its sweeping powers” (The Economist, Sept 27th, 2008; 17).
The truth of the matter is that it’s none of the above. We have to add another condition: The human condition has entered into the mix and no one, but no one trusts “the other.” “In economics and in the remainder of the social sciences as well, the translation from individual aggregate behavior is the key analytic problem. Yet in these disciplines the exact nature and sources of individual behavior are rarely considered. Instead, the knowledge used by the modelers is that of folk psychology, based mostly on common perception and unaided intuition, and folk psychology has already been pushed way past its limits” (Edward O. Wilson, Consilience, 1998; 202).
Money is not the root of all evil, but our perception of money is. When wealth is involved, we Americans are addicted to outdoing “the other” by any means necessary. Long term repercussions are not in our plans. Immediate short term and costly gain–derivatives and predatory lending–is all we see. The devastation and suffering we leave behind is for others. Even when Paulson and Bernanke unveiled their plan before Congress, callous indifference reared its ugly head when they never even mentioned a word about the middle class, the working class that’s going to carry the burden imposed on it by greed.
Working Americans are going to pay more for greed and corruption because it’s permissible.
Globally there is money. Markets are not standing still–it’s the law of survival. Stand still and you die. Warren Buffett and Japan’s Mitsubishi-UFJ agreed to buy stakes in Goldman Sachs and Morgan Stanley. There are more enterprises–and governments–with money to bail-out corruption in Wall Street. We can’t be nervous that foreign capital is buying up America. This has been going on for quite some time since foreign capital knows that when push comes to shove, we will make the mistake of rushing towards immediate gratification. America is fat and now we got caught, one too many times, with our hand in the cookie jar. One bad apple can spoil the bunch. Many rotten apples, supported by laws that enable graft, deceit and corruption, have brought us to where we now are.
But where are we?
Historically, we can argue that this is the culmination of vituperative actions that began at the dawn of World War I, the War to End All Wars, which was the sure sign that it was the war to begin all notions of modern warfare. This is the war that was dominated by an aggressive attempt to control power, which is another way of saying that we sought to control wealth by a very few. There are many obvious reasons why we went to war–Mexico potentially allying with Germany, sabotage, and more–but none is more poignant than “a movement on behalf of Big Government in all walks of the economy and society, in a fusion or coalition between various groups of big businessmen, led by the House of Morgan, and rising groups of technocratic and statist intellectuals. In this fusion, the values and interests of both groups would be pursued through government” (World War I as Fulfillment: Power and the Intellectuals).
Since WWI, the agenda has been the consolidation of power. Government’s role is to protect the few with the most power–the extreme form of John Locke’s economic theories. It’s not surprising that Goldman Sachs, as it becomes “a bank,” will be one of the two firms who will benefit most from the bail-out. Hank Paulson, “the hammer,” as he was called at Dartmouth College, was Staff Assistant to the Assistant Secretary of Defense at The Pentagon from 1970 to 1972. He then worked for the administration of U.S. President Richard Nixon, serving as assistant to John Ehrlichman from 1972 to 1973. Finally he became Chairman and Chief Executive Officer of Goldman Sachs. Is this former eagle scout operating with our best interests in mind, given his uncanny allegiance to the most powerful in society? Or is Paulson finalizing the work that began during WWI, the complete consolidation of all power in the hands of the smallest number of powerful men? Our laws show the history and evolution of this crisis to these ends.
Much as we did in WWI, we could be headed towards the illusion of victory (illusion is the prodigal son of avarice, greed and corruption; we can’t see these and live these as real solutions unless we believe illusions as truth). But if we don’t want to go as far back as WWI, we can look at more recent events.
John Kenneth Galbraith pointed out one of the causes of the Great Depression was “The large-scale corporate thimblerigging that was going on. This took a variety of forms, of which by far the most common was the organization of corporations to hold stock in yet other corporations, which in turn held stock in yet other corporations.” Galbraith tells us that, “during 1929 one investment house, Goldman, Sachs & Company, organized and sold nearly a billion dollars’ worth of securities in three interconnected investment trusts—Goldman Sachs Trading Corporation; Shenandoah Corporation; and Blue Ridge Corporation. All eventually depreciated virtually to nothing.”
When Franklin Roosevelt took office, both the President and Congress knew the banking crisis demanded immediate action. The result was one of the crown jewels of the New Deal: the Glass-Steagall Act, officially known as the Banking Act of 1933.
A Frontline report on the repeal of Glass-Steagall shows how those with money end up with pens from the President of the United States on their walls:
Sandy Weill calls President Clinton in the evening to try to break the deadlock after Senator Phil Gramm, chairman of the Banking Committee, warned Citigroup lobbyist Roger Levy that Weill has to get White House moving on the bill or he would shut down the House-Senate conference. Serious negotiations resume, and a deal is announced at 2:45 a.m. on Oct. 22. Whether Weill made any difference in precipitating a deal is unclear.
Just days after the administration (including the Treasury Department) agrees to support the repeal, Treasury Secretary Robert Rubin, the former co-chairman of a major Wall Street investment bank, Goldman Sachs, raises eyebrows by accepting a top job at Citigroup as Weill’s chief lieutenant. The previous year, Weill had called Secretary Rubin to give him advance notice of the upcoming merger announcement. When Weill told Rubin he had some important news, the secretary reportedly quipped, “You’re buying the government?”
When Bill Clinton gave that pen to Sanford Weill, it symbolized the ending of the twentieth century Democratic Party that had created the New Deal. Although the 1999 law did not repeal all of the banking Act of 1933, retaining the FDIC, it did once again allow banks to enter the securities business, becoming what some term “whole banks” (Bill Clinton’s Role in the Mortgage Crisis).
The house of cards begins to topple, the inevitable fate of coalitions fused by greed and avarice.
In “Experts Predict Money Crisis,” Christopher Ruddy (August 2007) writes that “there is evidence that this global boom is anything but natural and sustainable, but is really the artificial result of a global liquidity bubble, a bubble that could now be on the verge of bursting. In this global bubble, literally hundreds of trillions of dollars in leveraged debt are at risk. It’s no secret that in today’s society, everyone from the family next door, to major corporations, to the U.S. government is deeply in debt. But while some debt statistics are widely reported, such as our $8 trillion national debt, other debt figures are never mentioned.”
Everyone knew. The US Government–and the White House–knew. The candidates knew. Banks knew. And, most importantly, media knew. Why didn’t anyone act? When silence of this magnitude ensues, something is indeed rotten somewhere.
The role of modern day government is to ensure enough instability to maintain levels of power in the hands of few. This is how it works. (See also: The Conservative Origins of the Sub-Prime Mortgage Crisis: Everything you ever wanted to know about the mortgage meltdown but were afraid to ask.) We can see evidence of this in Dick Cheney who, we can argue, has moved vice-presidential powers beyond what we have known in the past.
In journalist Barton Gellman’s Angler, (Cheney’s CIA cover name is “Angler”) we learn the details of Cheney’s forty-year political career that gives evidence of subterfuge for the sake of power and mission. His first act, according to Gellman, is Cheney’s self-selection to vice-president. Prior, Cheney, from 1979 to 1982, voted “yes” on all bills for oil tax breaks and for indexing income tax (H.R. 1176, H.R. 2225, H.R. 5318); between 1984 to 1986, he voted to keep mortgage bonds and loosen capital gains rules; he brought in Paul O’Neill, for instance; he mislead Congress and the American people about Iraq; and, to support our discussion, here, Cheney was behind tax cuts for the rich and the reduction of capital gains (see more about Cheney the economist). Cheney believed very strongly that there should be a capital gains cut to unleash producers, which has never worked but has indeed made the wealthy wealthier.
Furthering the irony that by enabling a loosening of rules and regulations–and taxes–for the rich is healthy for the economy, we learned that McCain, for instance, defended the “Enron loophole” and “oppose(d) the $307 billion farm bill because it would dole out wasteful subsidies, but his chief economic adviser Phil Gramm also want(ed) to stop its proposed regulation of energy futures trading, a market that was famously abused when Enron Corp. manipulated California’s electricity prices in 2001.” In fact, “Gramm, as a powerful Texas senator in 2000, slipped an Enron-backed provision into the Commodities Futures Modernization Act that exempted from regulation energy trading on electronic platforms.”
We can see, therefore, how carefully and in ways that may seem complex to the general public, we have politicians as front men for powerful corporations that are looking to consolidate power. The fusion of power at the highest levels is the aim. In September, for instance, McCain said that he thought “deregulation in banking worked well (what is he smoking?) and wants to borrow from Wall Street’s brilliant success to help reform healthcare.” (more on how the Wall Street crisis has been helped by the McCain – Gramm team, here) Any changes in McCain’s rhetoric are merely means by which to soften his image to voters; he is beholding to the most powerful men and their corporations and he’s evolved his political life, not as a maverick, but as a bold advocate–and mouthpiece–for the extraordinarily wealthy. John McCain is a scam artist, applying media-rich extravaganza, like parachuting into Washington the other day to save the day and to continue the pursuit of the fusion of power that began long ago. In fact, John McCain is the most influential supporter of gambling, as reported by The New York Times.
What are we then to expect from Obama? He has not been tested on this yet given his short term in the Senate; however, real estate, Wall Street financiers, and lawyers, all support Obama. In their first debate, when Obama had ample room to really attack–and address–McCain on this, he did not, which raises suspicions, of course. Or is it the continued Obama problem that he may be too cerebral for the American public?
I also often say to some of my “econ majors” to practice the following: “Would you like french fries with that?” They laugh nervously. But suffice to say that “the econ major” is such, not because s/he is trying to work out strange and interesting theories about future markets, but rather, s/he studies economics in a rush to gain a foothold, to have “the good life,” which more often than not means luxury and enough money to buy leisure–the most expensive commodity today.
The only hope I have in Obama is that, perhaps, given that he seems to enjoy deliberation, he’ll be able to speak across differences–our own and those we have with aggressive nations; that he might be able to begin to quell our thirst for more and more and more; and that he may begin to at least entertain a dialog, among us, about who we might want to be when we grow up. This is romantic, of course, but given the signs of the times–the aggressive push to consolidate and fuse centers of power–it’s the only thing I have left. Can you imagine Sarah Palin in this world?