Banana Republic with Nukes, Big Oil, Capitalism, Corporate State, Corporatocracy, Darbikrash, Empire, Financial Elite, Globalization, Government-Corporate-Lobbyist Complex, Gross Inequality, Inverted Totalitarianism, Jeffrey Sachs, Military Industrial Complex, Regulatory Capture, Social Unrest, The Elite 1%, The Price of Civilisation, The Revolving Door Between Government and Corporations, Too-Big-To-Fail Banks, Unfettered Capitalism, unwashed public, Wall Street Fraud, War for Profit
An interesting article came to my attention via a referral from The Big Picture. The economics editor of the Sydney Morning Herald, Ross Gittins, has written an article, The four business gangs that run the US, which is a review of Jeffrey Sachs book, The Price of Civilisation. Sachs should have entitled his book ’The Price of Capitalism’. In order to protect corporate interests, the exploiters will always use their wealth to bribe the political system (such as campaign contributions and promises of lucrative positions in the private sector after leaving government posts). We are all familiar with feedback loops in terms of climate change, but there also exists one within our socio-economic system which is extremely destructive. I refered to this feedback loop as the government-corporate-lobbyist complex in my post Guns, God, and Greenback$. Sachs describes this pernicious feedback loop, which has accelerated wealth to the top 0.001%, as follows:
Corporate wealth translates into political power through campaign financing, corporate lobbying and the revolving door of jobs between government and industry; and political power translates into further wealth through tax cuts, deregulation and sweetheart contracts between government and industry. Wealth begets power, and power begets wealth.
Sachs even uses the term corporatocracy to describe the four primary U.S. business sectors which have usurped our government:
As [President] Eisenhower famously warned in his farewell address in January 1961, the linkage of the military and private industry created a political power so pervasive that America has been condemned to militarisation, useless wars and fiscal waste on a scale of many tens of trillions of dollars since then.
2.) Wall Street-Washington complex
This group, comprised primarily of the big financial corporations (i.e. Goldman Sachs, JP Morgan Chase, Citigroup, Morgan Stanley), systematically worked to “capture” regulation and take control of the money system which, Sachs says, ”paved the way for the 2008 financial crisis and the mega-bailouts that followed, through reckless deregulation followed by an almost complete lack of oversight by government”.
3.) Big Oil-transport-military complex
Since the days of John D. Rockefeller and the Standard Oil Trust a century ago, Big Oil has loomed large in American politics and foreign policy. Big Oil teamed up with the automobile industry to steer America away from mass transit and towards gas-guzzling vehicles driving on a nationally financed highway system.
Now you know why America has a rail system that even the Bulgarians would be ashamed of, as Kunstler is fond of saying. Next time you fill up your tank, think of the perpetual oil wars in the Middle East as an externalized cost of subsidizing America’s car culture. Anita Dancs calculated the cost of securing our liquid fuel addiction back in 2010:
…Put all these numbers in perspective: The price of a barrel of oil consumed in the United States would have to increase by $23.40 to offset military resources expended to secure oil. That translates to an additional 56 cents for a gallon of gas, or three times the federal gas tax that funds road construction.
If $166 billion were spent on other priorities, the Boston public transportation system, the “T,” could have its operating expenses covered, with commuters riding for free. And there would still be money left over for another 100 public transport systems across the United States. Or, we could build and install nearly 50,000 wind turbines. Take your pick.
Sachs also reminds us that “Big Oil has played a notorious role in the fight to keep climate change off the US agenda. Exxon-Mobil, Koch Industries and others in the sector have underwritten a generation of anti-scientific propaganda to confuse the American people.”
4.) Healthcare Complex
The key to understanding this sector is to note that the government partners with industry to reimburse costs with little systematic oversight and control. Pharmaceutical firms set sky-high prices protected by patent rights; Medicare [for the aged] and Medicaid [for the poor] and private insurers reimburse doctors and hospitals on a cost-plus basis; and the American Medical Association restricts the supply of new doctors through the control of placements at medical schools.
‘The result of this pseudo-market system is sky-high costs, large profits for the private healthcare sector, and no political will to reform.
We are the only industrialized country on Earth without universal healthcare. We pay more than anyone else and get less for the money spent. One of every five or six GDP dollars goes to feed this beast, but our life expectancy doesn’t reflect it:
Sachs says the elite take care of their own and have no concern for the plebs down below:
There is absolutely no economic crisis in corporate America. Consider the pulse of the corporate sector as opposed to the pulse of the employees working in it: corporate profits in 2010 were at an all-time high, chief executive salaries in 2010 rebounded strongly from the financial crisis, Wall Street compensation in 2010 was at an all-time high, several Wall Street firms paid civil penalties for financial abuses, but no senior banker faced any criminal charges, and there were no adverse regulatory measures that would lead to a loss of profits in finance, health care, military supplies and energy.
Ross Gittins concludes his review of Sachs’ book by briefly summarizing the path the elite took to amass their incredible wealth:
The 30-year achievement of the corporatocracy has been the creation of America’s rich and super-rich classes, he says. And we can now see their tools of trade.
It began with globalisation, which pushed up capital income while pushing down wages. These changes were magnified by the tax cuts at the top, which left more take-home pay and the ability to accumulate greater wealth through higher net-of-tax returns to saving.’
Chief executives then helped themselves to their own slice of the corporate sector ownership through outlandish awards of stock options by friendly and often handpicked compensation committees, while the Securities and Exchange Commission looked the other way. It’s not all that hard to do when both political parties are standing in line to do your bidding, Sachs concludes.
There was a comment that Darbikrash made on another website a year ago which pertains to this subject and clearly explains the corrupting influence that money has on government. Here is an excerpt:
Now you know how the elite have made this country a Banana Republic with nukes. Unfettered capitalism = monkeys with guns.