Category Archives: Wall Street Fraud

America’s Two-Headed Corporate Hydra Monster of Politics & the Abandonment of the People

16 Thursday Aug 2012

Posted by in Capitalism, Corporate State, Empire, Inequality, Wall Street Fraud

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Jeffrey Sachs’ op ed piece entitled “America Has Lost the battle Over Government” in the Financial Times explains how the budget plans of our two corporate candidate stooges are strikingly similar and offer no real choice for the American citizen. With the modern-day instruments of mass media manipulation being the most sophisticated tool for mind control in the history of man, you are made to think that the current election is an epic struggle between the forces of good and evil, but the American’s fate of joblessness, dwindling social assistance programs, a permanently growing underclass, and the slide into an oligarchic Third World country has already been written in stone by the transnational capitalist forces and its corporate state. Crime will surely go up, lifespan expectancy will go down for the underclass, and the infrastructure of the nation will continue its trajectory into dilapidation and decay. Sacrificing your body in the Empire’s foreign resource wars and geopolitical games will be one of the only jobs available for our debt-ridden youth:

…Mr Ryan’s plan calls for federal revenues of 18.4 per cent of gross domestic product in 2016 and 18.5 per cent in 2020 (though his lower tax rates would probably put those targets out of reach). His budget outlays come in at 19.7 per cent and 19.5 per cent in 2016 and 2020, respectively. Of the total outlays in 2016, Mr Ryan targets “discretionary” programmes at 5.9 per cent of GDP; social security, 5 per cent; Medicare, 3.2 per cent; other mandatory spending, 3.7 per cent; and interest payments, 1.9 per cent.

Now consider Mr Obama’s budget unveiled in February. Federal revenues are targeted at 19.1 per cent of GDP in 2016 and 19.7 per cent of GDP in 2020, only about 1 percentage point above Mr Ryan’s revenue targets. In Mr Obama’s 2016 budget targets, discretionary spending is set at 5.9 per cent of GDP; social security, 5 per cent; Medicare, 3.2 per cent; other mandatory spending, 5.8 per cent; and interest payments, 2.5 per cent.

In fact, Mr Obama’s overall discretionary spending targets are essentially the same as Mr Ryan’s. Whether Mr Obama or Mr Romney wins, the “non-security” discretionary budget – for education, job skills, infrastructure, science and technology, space, environmental protection, alternative energy and climate change adaptation – is on the chopping block. Mr Obama’s budget would shrink non-security discretionary programmes from an already insufficient 3.1 per cent of GDP in 2011 to 1.8 per cent in 2020. That is the “liberal” alternative.

In bemoaning Mr Obama’s budget, I do not mean to equate it with Mr Ryan’s. Mr Ryan’s budget is nothing short of heartless in the face of the dire crisis facing America’s poor. It is also reckless, guaranteed to leave millions of children without the quality of education and skills they will need as adults. Yet the sad truth is that the Democrats offer no progressive alternative. Both parties are accomplices to the premeditated asphyxiation of the state. Viewed from an international perspective, the constricted range of the US fiscal debate is striking. Total US government revenues (combining federal, state and local governments) in 2011 came in at about 32 per cent of GDP. This compares with an average of 44 per cent in the EU and 50 per cent in northern Europe.

Many Americans will say that they are dodging the European curse by keeping taxation so low but they should look again. Northern Europe (Germany, the Netherlands, Denmark, Finland, Norway and Sweden) gets great value for its tax revenues: lower budget deficits, lower unemployment rates, lower public debt-to-GDP ratios, lower poverty rates, greater social mobility, better job training, longer life expectancy, lower greenhouse gas emissions, higher reported life satisfaction and greater macroeconomic stability.

America’s two political parties depend on wealthy contributors to finance their presidential campaigns. These donors want and expect their taxes to stay low. As a result, social divisions, broken infrastructure, laggard educational attainments, high carbon emissions and chronic budget deficits are likely to continue no matter who is elected, even though the public supports higher taxes on corporations and the rich…

Chris Hedges was back in court over the government’s appeal of Judge Forrest’s earlier injunction of the NDAA. As a matter of fact, the government has refused to comply with the injunction. Hedges states he and the other plaintiffs “will most likely have to continue this fight in an appellate court and perhaps the Supreme Court.” He also notes that no matter the results of the rigged U.S. elections, no meaningful change will come to the deteriorating lives of ordinary Americans:

…The corporate state has convinced the masses, in essence, to clamor for their own enslavement. There is, in reality, no daylight between Mitt Romney and Obama about the inner workings of the corporate state. They each support this section within the NDAA and the widespread extinguishing of civil liberties. They each will continue to funnel hundreds of billions of wasted dollars to defense contractors, intelligence agencies and the military. They each intend to let Wall Street loot the U.S. Treasury with impunity. Neither will lift a finger to help the long-term unemployed and underemployed, those losing their homes to foreclosures or bank repossessions, those filing for bankruptcy because of medical bills or college students burdened by crippling debt. Listen to the anguished cries of partisans on either side of the election divide and you would think this was a battle between the forces of light and the forces of darkness. You would think voting in the rigged political theater of the corporate state actually makes a difference. The charade of junk politics is there not to offer a choice but to divert the crowd while our corporate masters move relentlessly forward, unimpeded by either party, to turn all dissent into a crime…

A lot of Americans buy into this “cult of individualism” and anti-government sentiment which the elites of the corporate state artfully peddle in order to dismantle any remnants of a functioning government that might serve the common good of its citizenry. In this way, the corporate state has convinced the masses to cheer the destruction of government and its beneficial roles. But of course we cannot call our lobbyist-infested, corporate-controlled government an actual representation of the people’s interests. Just as our two-partied presidential election is an orchestrated illusion of democracy, so is the false dichotomy of government and corporations which are merely separated by a revolving door. The government has become, for the most part, a tool for wealth extraction by multinational corporations. During a period of multiple civilization-ending crises when leadership is in dire need, the degeneration of government from a socially beneficial entity into a puppet of Wall Street’s rapacious greed is the greatest tragedy of our time.

Last Man Scrambling

14 Tuesday Aug 2012

Posted by in Capitalism, Corporate State, Inequality, Wall Street Fraud

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If Ayn Rand was alive today, she would believe that climate change was a conspiracy theory.

I want to preface this post by saying I don’t endorse either Wall Street stooge of our political system’s two-headed corporate hydra monster. The Democratic party fell sway to Big Money a long time ago. See ‘Death of the Liberal Class‘ by Chris Hedges. But I do want to focus on the party that doesn’t mince words or even pretend (at least not very well for those who read) to represent the greater good of society. The primary ideology of the Republicans (and faux Democrats) is neoliberal capitalism whose tenets are laid out here. If there ever was a time when ‘the greater good’ should be our primary objective, the time is now. We are facing an environmental crisis, financial crisis, economic system crisis, food crisis, energy crisis, wealth disparity crisis, etc. Oh, I should have mentioned we’re also facing the possible probable extinction of our own species. But the modus operandi that the our leaders rulers are following is not to solve any of the civilization-ending crises, but to do what Richard Heinberg described as the “Last Man Standing” strategy:

I thought that world leaders would want to keep their nations from collapsing. They must be working hard to prevent currency collapse, financial system collapse, food system collapse, social collapse, environmental collapse, and the onset of general, overwhelming misery—right? But no, that’s not what the evidence suggests. Increasingly I am forced to conclude that the object of the game that world leaders are actually playing is not to avoid collapse; it’s simply to postpone it a while so as to be the last nation to go down, so yours can have the chance to pick the others’ carcasses before it meets the same fate.

The elite 1% are playing a similar game against the 99% which I call “The Last Man Scrambling”. Paul Rosenberg’s latest essay discusses a 2006 book by Yale University political scientist Jacob S. Hacker who explains how the 99% are being financially eaten alive by what is termed the “risk-shift” – the systematic shifting of risk from large institutions onto the backs of citizens, including the most vulnerable among us, under the neoliberal rhetoric of “individuals taking personal responsibility”:

…The figures Hacker cited were staggering. First, regarding basic economic security: Personal bankruptcies increased from 300,000 in 1980 to 2 million in 2005 – a 567 per cent increase. The chance that an average American’s income will drop 50 per cent or more over a two-year period increased from 7 per cent in the 1970s to 17 per cent in 2002 – a 143 per cent increase. Long-term unemployment (more than 6 months) at the peak of the business cycle is triple what it was in the 1960s.

Second, regarding health security: The number of Americans without health insurance was 46.6 million, up from about 24 million in 1980. The decline was entirely due to cuts in employer-provided health coverage. Worse still, over 80 million Americans lack health insurance over some time during a two-year period.

Third, regarding retirement security: The percentage of large and medium-sized corporations offering traditional “defined-benefit” pensions, with a guaranteed monthly benefit for life, fell from more than 80 per cent in 1980 to less than a third in 2006. And 401(k)s that replaced them? There’s a reason folks call them 201(k)s now.

Fourth, the burden was particularly hard on families with children, whom conservatives claim to care about most. Their bankruptcy rates are twice that of childless couples.

These are just a few of the frightening figures Hacker cited, and in every case, he argued, the basic cause was the same: risk had been systematically shifted from large institutions most capable of handling it onto the shoulders of the most vulnerable. This was largely a result of a rhetoric of “personal responsibility”, but what was actually being shifted was not responsibility, but risk.

Rosenberg then ties this in with what Romney/Ryan have planned for the American plebs:

So what does all that have to do with Paul Ryan? Simple: Ryan’s infamous budget plan has many well-known problems with it, but it would also vastly intensify the Great Risk Shift, as Democratic strategist Mark Schmitt cogently pointed out in April 2011 (“The Ryan Plan: The Biggest Risk Shift Ever“).

“It’s not just that Ryan slashes spending,” Schmitt wrote, “he places the burden of risk on American families’ shoulders.” That’s precisely what the Great Risk Shift has done step-by-step over the past 30 years.  With the Ryan plan, the process would be dramatically accelerated.

In one concise paragraph, Schmitt summarised Hacker’s point about the true value and function of the welfare state that America’s elites have been gradually dismantling since the 1970s:

The achievement of the New Deal and the Great Society was not primarily in providing benefits to the poor and the old, although that’s often how both liberals and conservatives talk about it now. What those programmes did best was to reduce risks for individuals by sharing them across society. Whether it was health insurance through Medicare and Medicaid, insurance against poverty in old age through Social Security, federal mortgage insurance that made homeownership possible, or the Federal Deposit Insurance Corporation that enabled people to save for the future with confidence, when government absorbed and shared some of the risks of life, individuals were able to take chances and make the most of their potential.

And, in contrast, he noted: 

Today, though, the only risks we’re sharing are the wrong ones: Wealthy investors are protected by real or implicit guarantees such as “too big to fail,” while the risks that should be shared, through social insurance, are instead privatised – that is, pushed down the line onto us as individuals.

So that’s what you call “The Last Man Scrambling” –for a livable-wage job, for affordable health care, for food on the table… Forget retirement; most will now die with their working boots on. And all this occurs while corporate profits soar to their highest level since WWII and the corporate tax burden sinks to its lowest level...

The Political Circus and the Approaching Post-Human Era

13 Monday Aug 2012

Posted by in Capitalism, Corporate State, Empire, Inequality, Wall Street Fraud

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Here is a nice little skewering of King Romney by Cliff Schecter entitled Mitt Romney: The aristocrat. Some excerpts:

…if you knew you were running for president, wouldn’t you perhaps spend at least five years before running making your taxes look as clean as a whistle? I’m saying no Grand Caymans, no Switzerland, no stashing bullion in the cargo bay of Curiosity to reach the low-tax surface of Mars (ok, one of these might be an exaggeration).

Not Romney, though. He apparently had to use every manoeuvre known to man and man’s most deceitful accountant to ensure he paid low-to-no taxes. So how has he handled the fallout? Stonewalling, uncomfortable denials, and lashing out at those who attack him for his hidden returns, such as Senator Harry Reid – thereby keeping the whole story in the news that much longer (genius!).

He’s even got porn star Jenna Jameson saying she is going to vote for him because “when you’re rich, you want a Republican in office.” (Of course, other porn actors interviewed by The Daily Beast are pro-Obama, showing that even in the world of X-rated entertainment, Mitt can find a way to divide the top 1 per cent from everyone else)…

Amazingly, if you look at the polls, a large percentage of American’s(aka the clueless, MSM spoon-fed plebs) would still vote for someone who is part of the cosseted 0.001% responsible for hiding 20 to 30 trillion in off-shore tax havens and who boldly regurgitate the lie that corporations in America have the highest tax rate in the world (the nominal rate is meaningless; it’s the effective rate produced from all the tax loopholes that counts). But as they say, the propaganda-ridden minds of the American public are mere putty in the hands of the corporate-owned media machine. Mind you, I know there is no real measurable difference between Obama and Romney when it comes to our self-inflicted trajectory toward a post-human era, but voting for Romney, a financier of the criminal class on Wall Street, takes ‘voting against your own interests’ to a whole new level. I mean this guy financed Bain Capital with blood money from death squad oligarchs in South America. I understand the utter failure Obama has been for the masses who bought into the “Hope” slogan, but voting for King Romney is like saying, “I give up; please rape me and then throw me to the lions.”

In a comment section of Schecter’s piece, a reader sumarizes perfectly what King Romney is about:

Let us focus that the issue is not Rommey or the VP RP, the issue is what is behind Rommey. Rommey is the representative of global capitalism; he is not interested in the American people as a nation, but as consumers; for him the solvency of the middle class is of no importance. It is the maintenance of corporate America and global capital that matters for him. He advocates trickle down economics and the emancipation of corporations over people. [In] the end Rommey, like any other warmonger, will use war [as] an economic incentive.

– ’nuff said. So how are the American plebs doing? For starters, a recent study found that nearly half the population in the U.S. dies penniless and dependent on Social Security. Basically we are now a nation of the grotesquely wealthy, the ‘just-getting-by’, and the crumb scrapers. The ‘just-getting-by’ segment is always in danger of falling into the ranks of the crumb scrapers. And the elite 1%, as we have discussed in prior posts, have built up a security and surveillance state as well as the prison industrial complex in order to deal with those who have any funny ideas of changing that status quo.

…now back to our two corporate stooges who are vying for the coveted PR position of the corporatocracy. Matt Taibbi has a new article out which shows how our tax system favors the wealthy and how Big Money from Wall Street perverts our political system:

…We’ve known for seven months now, for instance, that Romney paid $3 million in federal taxes in 2010 on $21.7 million in taxable revenue, an effective tax rate of 13.9 percent. Which, as most people know, is less than half the rate most people pay on their income tax.

When Romney released these numbers, he said they were “entirely legal and fair,” and added, “I’m proud of the fact that I pay a lot of taxes.”

The Romney tax returns are a prime example of our increasingly two-tiered bureaucratic system, in which there is one set of rules for poor and middle-class people, and another set of rules for people like Mitt Romney. …

<snip>

In Mitt’s case, the money you and I make to support ourselves is called income and is taxed up to 35 percent, but the money Mitt makes raiding companies with borrowed money and extracting draconian management fees from captive companies that have no choice but to pay them is called “Carried Interest,” and taxed at a top rate of 15%.

The ostensible excuse for this outrageous difference is based upon a built-in cultural value judgment, which says that the work Mitt Romney does raiding companies with borrowed money is more valuable than the work ordinary people do laying asphalt or teaching autistic children. Here’s what one private equity spokesperson said by way of explanation for this difference:

Steve Judge, the president of the Private Equity Growth Capital Council, a trade group for private equity funds, said carried interest is a way to reward risk takers in a way that tax havens do not. “They don’t have the purpose of incentivizing risk taking,” Judge said. “That makes it inappropriate to blend carried interest with them.”

So the carried interest tax break is a way to “incentivize” the kind of work Mitt Romney does. One wonders then if the relatively higher tax rates paid by teachers and librarians and cops is … what? A disincentive? Anyway, it’s this skewed set of obligations that Mitt Romney thinks is “fair.”

The Obama administration, if it wanted to, could make a lot of hay over this. It could say, “Mitt Romney doesn’t want to release his tax returns for years and years during the last decade. But the years for which he did release returns, he paid a rate that’s less than half of what most ordinary American professionals make – and he thinks that’s ‘fair.’”

Now, Obama has gone after Mitt’s tax returns – a little. He’s released a few ads here and there, including one called “Makes You Wonder” that called Mitt’s use of carried interest in his tax return a “trick,” a semantic move for which Obama was criticized, since it was actually nothing of the sort. Mitt Romney’s ability to pay a top rate of 15% for his work was no trick at all but a fully-legal expression of the values of our current political system, a system, again, that Mitt Romney is “proud of” and thinks is “fair.”

The reason the Obama administration hasn’t gone after this aggressively is probably the same reason it hasn’t fought harder to repeal that carried interest tax break (which Obama incidentally promised to do four years ago), and the same reason that everyone from Corey Booker to Bill Clinton has urged Obama to lay off the theme of private equity thuggery in his campaign against Romney. Big-time politicians are still afraid to explain to the American people how exactly it is that many Wall Street firms make their money, because they’re afraid to lose access to the crumbs those firms sometimes toss their way.

In the case of Romney, what we’ve mostly heard is that he’s a turnover specialist who sometimes creates jobs and sometimes eliminates them – a kind of ideologically-neutral efficiency consultant who takes a cut when poorly-run companies cut out the fat. The Obama ads about Bain have been emotionally effective, but they’re still frustratingly vague about the actual mechanics of these takeovers. We learn from these ads that a bunch of rich guys took over plants and fired workers, but what we don’t learn is how companies like Bain raise the money for those takeovers, why the plants subsequently become cash-poor, how this industry works generally, and not just at Bain.

In fact the takeover method espoused by Bain and many other private equity firms is a lot closer to the Tony Soprano-takes-over-Davey-Scatino’s-sporting-goods-store “Bust Out” model (and we’ll be getting into this more in the magazine in upcoming weeks) than it is to anything like legitimate consulting.

Barack Obama is one of the few politicians with the communication skills to explain this to middle America, but he’s refusing to go there, probably because he’s still hoping for a post-election rapprochement with Wall Street. He wants to go after Bain Capital, but not private equity in general; he wants to go after Mitt Romney’s missing tax returns, but not the tax returns of all people like Mitt Romney.

So there you have it. Both sock-puppet politicians continue to protect the monied interests, skirt the real issues, and bamboozle the sheeple. But as I said, in a post-human era of the not-too-distant future, you can’t get too riled up about such trivialities.

They Hate Us for Our (Fictitious) Freedoms???

11 Saturday Aug 2012

Posted by in Capitalism, Corporate State, Wall Street Fraud

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I noticed today that our Department of (In)Justice will allow the crimes of their corporate masters, i.e. Goldman Sachs, to stand. The Department of (In)Justice has bigger fish to fry like the poor guy in this recent story:

A protester belonging to an Occupy Wall Street group in rural Pennsylvania is being charged with felony attempted bank robbery and a terrorism-related charge for holding signs up during a demonstration at a local Wells Fargo branch.

David C. Gorczynski, 22, was charged on Tuesday with attempted bank robbery and terroristic threatening, both felonies, as well as one misdemeanor charge of disorderly conduct. Police detained him after he walked into an Easton, PA Wells Fargo branch with a sign that read “You’re being robbed” and another that said “Give a man a gun, he can rob a bank. Give a man a bank, and he can rob a country.”

Gorczynski was at the Wells Fargo bank as part of a demonstration led by Occupy Easton, the small Pennsylvania town’s OWS offshoot…

“He is not the criminal. If the police were truly there to protect and serve the taxpayers, the banksters would be arrested and this man would be called a hero,” the Occupy Easton group responds on Facebook.

Gorczynski was released on $10,000 bond after a defense and bail fund established online helped bring in enough money to buy his freedom after his arrest.

Remember what little man Bush said: “They hate us for our freedoms.” So Bush, the Neocons, and the Faux Democrats proceeded to dismantle the very freedoms that were purported to be the reason for why the terrorists hated us. We should be thankful our dear leaders were wise enough to know how to get at the root of the problem, our freedoms, in order to prevent further animosity toward America.

So as to not incur the wrath of future terrorist attacks, our every movement, thought, and expressed opinion must be tracked to ensure we are not exercising any freedoms believed to be so inflammatory to the terrorists amongst us:

…So what is TrapWire, and why has its leak created such a commotion? According to reporting at RT, TrapWire is a detailed surveillance system that “can collect information about people and vehicles that is more accurate than facial recognition, draw[s] patterns, and do[es] threat assessments of areas that may be under observation from terrorists.” Anything suspect gets input into the system to be “analyzed and compared with data entered from other areas within a network for the purpose of identifying patterns of behavior that are indicative of pre-attack planning.”

According to the article, this system has been secretly installed in most major cities and around landmarks across the United States, in Canada, and in the UK. Most local police forces are installing their own monitoring software that works in conjunction with TrapWire. Private properties, including casinos, are now signing up to TrapWire. Essentially, it sounds like Big Brother identifying you, watching you, assessing your every move for abnormalities, then indexing your behavior.

…

Last year, while the occupy movement peacefully protested in cities across the country, a new-militarized police force presented itself, and moved to brutalize protesters exercising their rights to freedom of speech and assembly. It was as if these long-cherished American values had suddenly become viewed by our government as threats to its power. The scores of video footage capturing these egregious acts of brutality — from city to city, in a seemingly coordinated effort — resemble scenes carried out in faraway lands by despotic regimes.

Here is the reality about freedom: you may have a bill of rights, but if you are brutalized anytime you attempt to exercise those rights, you eventually become intimidated from ever doing so. And that appears to be the new order in America.

The brutality against occupy protesters became such an issue for human rights groups, as well as media groups whose reporters were being assaulted (including NY Times, The Associated Press, The New York Post, The Daily News, Thomson Reuters, Dow Jones & Company, etc.), that even the U.N. felt compelled to intervene. Two U.N. human rights envoys petitioned the Obama Administration to “protect Occupy protesters against excessive force by law enforcement officials.” The White House completely ignored their petition, and did absolutely nothing to reign in, much less condemn, the brutality.

Legal experts from NYU and Fordham University filed complaints with the NYPD, the U.S. Department of Justice and the United Nations, accompanied by a 132 page report entitled Suppressing Protest: Human Rights Violations in the U.S. Response to Occupy Wall Street. The document “catalogs 130 specific alleged incidents of excessive police force, and hundreds of additional violations, including unjustified arrests, abuse of journalists, unlawful closure of sidewalks and parks to protesters, and pervasive surveillance of peaceful activists.” This document barely scratches the surface, since its scope is limited just to the police response in NYC. The group plans to release similar publications for Boston, Charlotte, Oakland, and San Francisco.

For those of you who believe that our nation’s dramatic shift towards a police-state is justifiable, in light of 9-11, you should know that nearly every police-state throughout history became so under the guise of national security threats. Most despotic regimes faced real, perceived, or sometimes manufactured threats to their national security. And most of them could point historians back to their own 9-11-like ‘turning point’.

For example, Adolph Hitler would surely point historians to the burning of the Reichstag building on February 27, 1933 as Germany’s ‘turning point’. He blamed the arson on the Communists (Note: some prominent historians believed the Nazis themselves were responsible for the arson). But regardless of who actually burned Reichstag, the Nazis capitalized on that crucial moment in a way that would forever change the course of history.

They used the shock and fear generated by that event as justification for the Reichstag Fire Decree. This new law suspended basic rights of all Germans and allowed detention without trial. Sound familiar? That was Hitler’s very first step in consolidating his power, and transforming Germany into a despotic regime.

A government shifting towards despotism always works to capitalize on a nation’s fear. It uses that fear as the impetus to strip its citizens of their inalienable rights. And unfortunately, once those rights have been fleeced, it often takes a full-scale revolution or war just to restore them.

America, land of the free feeble and home of the brave bamboozled…

Rest in Peace, Gore Vidal, for the Empire is Not Far Behind You

06 Monday Aug 2012

Posted by in Capitalism, Consumerism, Corporate State, Empire, Inequality, Wall Street Fraud

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Growing up in the seat of American power gave Gore Vidal, historian and scathing critic of the Empire, a front row seat to its inner workings. He was raised in Washington, D.C. at the home of his grandfather, Oklahoma Senator Thomas P. Gore. Being related to Jacqueline Kennedy, he held close ties to the Kennedy clan. He was also distantly related to Al Gore and Jimmy Carter. Gore Vidal himself ran for public office twice, once for Congress in 1960 in New York and once for the U.S. Senate in California in 1982. He knew his subject well enough to speak of the skeletons in its closet and the truth behind the glossy facade. In fact, he once said, “You know, I’ve been around the ruling class all my life, and I’ve been quite aware of their total contempt for the people of the country.”

 
My belated tribute to Gore Vidal will simply be to present twelve quotes from him and let his words speak for themselves. You could do much worse with your time than to spend it studying the writings of Gore Vidal:

The genius of our ruling class is that it has kept a majority of the people from ever questioning the inequity of a system where most people drudge along, paying heavy taxes for which they get nothing in return.

~~~~~~~

…fifty years ago, Harry Truman replaced the old republic with a national-security state whose sole purpose is to wage perpetual wars, hot, cold, and tepid. Exact date of replacement? February 27, 1947. Place: The White House Cabinet Room. Cast: Truman, Undersecretary of State Dean Acheson, a handful of congressional leaders. Republican senator Arthur Vandenberg told Truman that he could have his militarized economy only IF he first “scared the hell out of the American people” that the Russians were coming. Truman obliged. The perpetual war began. Representative government of, by, and for the people is now a faded memory. Only corporate America enjoys representation by the Congress and presidents that it pays for in an arrangement where no one is entirely accountable because those who have bought the government also own the media. Now, with the revolt of the Praetorian Guard at the Pentagon, we are entering a new and dangerous phase. Although we regularly stigmatize other societies as rogue states, we ourselves have become the largest rogue state of all. We honor no treaties. We spurn international courts. We strike unilaterally wherever we choose. We give orders to the United Nations but do not pay our dues…we bomb, invade, subvert other states. Although We the People of the United States are the sole source of legitimate authority in this land, we are no longer represented in Congress Assembled. Our Congress has been hijacked by corporate America and its enforcer, the imperial military machine…

~~~~~~~

We should stop going around babbling about how we’re the greatest democracy on earth, when we’re not even a democracy. We are a sort of militarised republic.

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Apparently, a democracy is a place where numerous elections are held at great cost without issues and with interchangeable candidates.

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Think of the earth as a living organism that is being attacked by billions of bacteria whose numbers double every forty years. Either the host dies, or the virus dies, or both die.

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…I think it is tragic that the poor man has almost no chance to rise unless he is willing to put himself in thrall to moneyed interests.

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Happily for the busy lunatics who rule over us, we are permanently the United States of Amnesia. We learn nothing because we remember nothing.

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We have ceased to be a nation under law but instead a homeland where the withered Bill of Rights, like a dead trumpet vine, clings to our pseudo-Roman columns.

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We must always remember that the police are recruited from the criminal classes.

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The hatred Americans have for their own government is pathological, if understandable. At one level it is simply thwarted greed: since our religion is making a buck, giving a part of that buck to any government is an act against nature.

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As societies grow decadent, the language grows decadent, too. Words are used to disguise, not to illuminate, action: you liberate a city by destroying it. Words are to confuse, so that at election time people will solemnly vote against their own interests.

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Every four years the naive half who vote are encouraged to believe that if we can elect a really nice man or woman President everything will be all right. But it won’t be. Any individual who is able to raise $25 million to be considered presidential is not going to be much use to the people at large. He will represent oil, or aerospace, or banking, or whatever moneyed entities are paying for him. Certainly he will never represent the people of the country, and they know it. Hence, the sense of despair throughout the land as incomes fall, businesses fail and there is no redress.

 at the FDL Dissenter Blog has a nice post remembering the perceptive brilliance of the now-deceased author entitled, Gore Vidal on the ‘National Security State’ of America. Here are a couple choice quotes from the video-taped speech by Gore Vidal:

…In the State Department we used to discuss how much time that mythical average American citizen put in each day listening, reading, and arguing about the world outside his country. It seemed to us that ten minutes a day would be a high average.” So why bore the people? Secret bipartisan government is best for what, after all, is or should be a society of docile workers, enthusiastic consumers, obedient soldiers who will believe just about anything for at least ten minutes…

…Of course, there were elections during the crucial time, but Truman-Dewey, Eisenhower-Stevenson, Kennedy-Nixon were of a single mind as to the desirability of inventing first a many-tentacled enemy–communism, the star of the chamber of horrors–then, to combat so much evil, install a permanent wartime state at home, with loyalty oaths, the national peacetime draft, and secret police to keep watch over homegrown traitors, as the few enemies of the national security state were known.

Then followed forty years of mindless wars, which created a debt of $5 trillion that hugely benefited aerospace companies and firms like General Electric, whose longtime TV spokesman, Ronald Reagan, eventually retired to the White House…

Mr. Vidal, you told the truth with wit and wisdom and may you now rest in peace for that valuable legacy.

Direct Democracy

29 Sunday Jul 2012

Posted by in Capitalism, Climate Change, Consumerism, Corporate State, Cyberwarfare, Ecological Overshoot, Empire, Environmental Degradation, Inequality, Intro, Military Industrial Complex, Neo-Colonialism, Peak Oil, Pollution, Wall Street Fraud

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I found this very interesting : –

I took a look into Direct Democracy for Switzerland at Wikipedia [link], where I found : –

In Switzerland, single majorities are sufficient at the town, city, and canton level, but at the national level, double majorities are required on constitutional matters. The intent of the double majorities is simply to ensure any citizen-made law’s legitimacy (Kobach, 1993).

Double majorities are, first, the approval by a majority of those voting, and, second, a majority of cantons in which a majority of those voting approve the ballot measure. A citizen-proposed law (i.e. initiative) cannot be passed in Switzerland at the national level if a majority of the people approve but a majority of the cantons disapprove (Kobach, 1993). For referendums or propositions in general terms (like the principle of a general revision of the Constitution), the majority of those voting is enough (Swiss constitution, 2005).

In 1890, when the provisions for Swiss national citizen lawmaking were being debated by civil society and government, the Swiss adopted the idea of double majorities from the United States Congess, in which House votes were to represent the people and Senate votes were to represent the states (Kobach, 1993). According to its supporters, this “legitimacy-rich” approach to national citizen lawmaking has been very successful. Kobach claims that Switzerland has had tandem successes both socially and economically which are matched by only a few other nations, and that the United States is not one of them. Kobach states at the end of his book, “Too often, observers deem Switzerland an oddity among political systems. It is more appropriate to regard it as a pioneer.”

Unfortunately, I found the political spin in the states worth giving emphasis from the same wikipedia link above : –

Direct democracy was very much opposed by the framers of the United States Constitution and some signers of the Declaration of Independence. They saw a danger in majorities forcing their will on minorities. As a result, they advocated a representative democracy in the form of a constitutional republic over a direct democracy. For example, James Madison, in Federalist No.10 advocates a constitutional republic over direct democracy precisely to protect the individual from the will of the majority. He says,

“A pure democracy can admit no cure for the mischiefs of faction. A common passion or interest will be felt by a majority, and there is nothing to check the inducements to sacrifice the weaker party. Hence it is, that democracies have ever been found incompatible with personal security or the rights of property; and have, in general, been as short in their lives as they have been violent in their deaths.”

John Witherspoon, one of the signers of the Declaration of Independence said,

“Pure democracy cannot subsist long nor be carried far into the departments of state — it is very subject to caprice and the madness of popular rage.”

Alexander Hamilton said,

“That a pure democracy if it were practicable would be the most perfect government. Experience has proved that no position is more false than this. The ancient democracies in which the people themselves deliberated never possessed one good feature of government. Their very character was tyranny; their figure deformity…”

Interestingly, Edward Bernays, that wonderful spinmeister of double speak – worthy of debate, due to the outcome of much of his folly in the present world – had this to say at the opening of his (1928) book Propaganda [PDF] : –

The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country.

Our invisible governors are, in many cases, unaware of the identity of their fellow members in the inner cabinet.

They govern us by their qualities of natural leadership, their ability to supply needed ideas and by their key position in the social structure. Whatever attitude one chooses toward this condition, it remains a fact that in almost every act of our daily lives, whether in the sphere of politics or business, in our social conduct or our ethical thinking, we are dominated by the relatively small number of persons-a trifling fraction of our hundred and twenty million-who understand the mental processes and social patterns of the masses. It is they who pull the wires which control the public mind, who harness old social forces and contrive new ways to bind and guide the world.

It is not usually realized how necessary these invisible governors are to the orderly functioning of our group life. In theory, every citizen may vote for whom he pleases. Our Constitution does not envisage political parties as part of the mechanism of government, and its framers seem not to have pictured to themselves the existence in our national politics of anything like the modern political machine. But the American voters soon found that without organization and direction their individual votes, cast, perhaps, for dozens of hundreds of candidates, would produce nothing but confusion. Invisible government, in the shape of rudimentary political parties, arose almost overnight. Ever since then we have agreed, for the sake of simplicity and practicality, that party machines should narrow down the field of choice to two candidates, or at most three or four.

In theory, every citizen makes up his mind on public questions and matters of private conduct. In practice, if all men had to study for themselves the abstruse economic, political, and ethical data involved in every question, they would find it impossible to come to a conclusion without anything. We have voluntarily agreed to let an invisible government sift the data and high-spot the outstanding issue so that our field of choice shall be narrowed to practical proportions. From our leaders and the media they use to reach the public, we accept the evidence and the demarcation of issues bearing upon public question; from some ethical teacher, be it a minister, a favorite essayist, or merely prevailing opinion, we accept a standardized code of social conduct to which we conform most of the time.

We are governed, our minds molded, our tastes formed, our ideas suggested, largely by men we have never heard of. This is a logical result of the way in which our democratic society is organized. Vast numbers of human beings must cooperate in this manner if they are to live together as a smoothly functioning society.

Which leads me to use a relevant passage from page 770 of Alexis de Tocqueville’s 1835 book On Democracy in America. : –

I therefore believe that the kind of oppression that threatens democratic peoples is unlike any the world has seen before. Our contemporaries will find no image of it in their memories. I search in vain for an expression that exactly reproduces my idea of it and captures it fully. The old words “despotism” and “tyranny” will not do. The thing is new, hence I must try to define it, since I cannot give it a name.

I am trying to imagine what new features despotism might have in today’s world: I see an innumerable host of men, all alike and equal, endlessly hastening after petty and vulgar pleasures with which they fill their souls. Each of them, withdrawn into himself, is virtually a stranger to the fate of all the others. For him, his children and personal friends comprise the entire human race. As for the remainder of his fellow citizens, he lives alongside them but does not see them. He touches them but does not feel them. He exists only in himself and for himself, and if he still has a family, he no longer has a country.

Over these men stands an immense tutelary power, which assumes sole responsibility for securing their pleasure and watching over their fate. It is absolute, meticulous, regular, provident, and mild. It would resemble paternal authority if only its purpose were the same, namely, to prepare men for manhood. But on the contrary, it seeks only to keep them in childhood irrevocably. It likes citizens to rejoice, provided they think only of rejoicing. It works willingly for their happiness. It provides for their security, foresees and takes care of their needs, facilitates their pleasures, manages their most important affairs, directs their industry, regulates their successions, and divides their inheritances. Why not relieve them entirely of the trouble of thinking and the difficulty of living?

Every day it thus makes man’s use of his free will rarer and more futile. It circumscribes the action of the will more narrowly, and little by little robs each citizen of the use of his own faculties. ~ Alexis de Tocqueville ~ 1835

I sense that the work is almost complete, since the exportation of most every wealth – with its replacement of exhorbitant debt – complete a nation without appeal to their constitutional rights – has squandered; for want of a stance in sensibility, even what abilities are left remaining to resolve it …

At Least $21 Trillion Hidden in Tax Havens While the 99% are Forced to Foot the Bill

22 Sunday Jul 2012

Posted by in Capitalism, Corporate State, Wall Street Fraud

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Wealth doesn’t trickle down – it just floods offshore. 

Now the following story should lay to rest the question of who is really waging this class war and laying waste to the rest of humanity. While the Über Rich hide their wealth in tax havens to the tune of at least $21 trillion, the Working Class lose their jobs due to the criminal acts of white-collar crooks, sacrifice their children in foreign wars, cope with cutbacks on social services and shoulder the burden of increased taxes to pay for the roads, bridges, and infrastructure required for society to function, resort to food stamps in an attempt to feed their families, and in some cases commit suicide to escape the hell they have been thrown into by the protected thieving class of the upper 1%.

And a recent example that shows the aloof, above-the-law mentality of these elitist pricks is illustrated in the following video:

 
This is reality: The elite feel they are above paying the taxes needed to run a functioning society while the rest of humanity is expected and forced to pay those government taxes as well as corporate bailouts. It’s called accumulation by dispossession.

Super–rich stash $21 tn in offshore havens 

Wealthy tax evaders, aided by private banks have exploited loopholes in tax legislation and stashed over $21 tn in offshore funds, says a report. The capital drained from some developing countries since 1970 would be enough to pay off national debts.

The findings show the gap between the haves and the have-nots is much larger than previously thought.

The document, entitled The Price of Offshore Revisited, was commissioned by The Tax Justice Network campaign group and leaked to the Guardian. The report provides the most detailed valuation of the offshore economy to date.

“The problem here is that the assets of these countries are held by a small number of wealthy individuals while the debts are shouldered by the ordinary people of these countries through their governments,” wrote James Henry, expert on tax havens and former chief economist at consultancy McKinsey in his report.

The document cites the world’s leading private banks as cherry-picking from the ranks of the uber-rich and siphoning their fortunes into tax-free havens such as Switzerland and the Cayman Islands.

The wealth of the super-rich is “protected by a highly paid, industrious bevy of professional enablers in the private banking, legal, accounting and investment industries taking advantage of the increasingly borderless, frictionless global economy.”

Henry writes that a large part of the trillion dollar hoard belongs to around 92,000 individuals, an elite class of super-rich who make up 0.001 percent of the global population.

“These estimates reveal a staggering failure: inequality is much, much worse than official statistics show, but politicians are still relying on trickle-down to transfer wealth to poorer people,” said John Christensen of the Tax Justice Network.

The report records the flow of capital from countries into offshores over the past few decades. Saudi Arabia saw almost $300 billion drained from their economy since the 1970s, while Russia saw almost $800 billion leave its economy in hidden assets since the fall of the Soviet Union. Nigeria issued a loss of $300 billion since the mid-1970s.
Henry points the finger at the world’s top ten private banks, among them UBS and Credit Suisse, for aiding wealthy clients to dodge taxes.

According to Henry’s figures, the top financial leaders processed more than $6 trillion in funds in 2010, more than double the previous year.

Banking system – rotten to the core

Last week the US Senate released a report damning the actions of the UK bank HSBC. The report highlighted evidence of the bank’s law security policies leading to money laundering cases.

It referenced $7 billion in cash that had crossed the Mexican border into the US and been deposited in HSBC from 2007 to 2008. The report suggests that the billions of dollars could have come from drug sales in Mexico.

The probe also shed light on a number of other instances when the bank bypassed US safeguards, potentially bankrolling terrorists and drug lords in the process.

The bank had previously had to pay out $1bn to US authorities for money laundering offenses committed between 2004 and 2010.

The G20 has repeatedly made calls to end tax-free havens since the beginning of the financial crisis in 2008, but these plans have not yet come to fruition.

The Joke’s on Us: Guns in a Sociopathic Society

21 Saturday Jul 2012

Posted by in Capitalism, Consumerism, Corporate State, Environmental Degradation, Inequality, Military Industrial Complex, Wall Street Fraud

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He looked like an assassin ready to go to war,” said Jordan Crofter, a moviegoer who was unhurt in the attack early Friday, about a half-hour after the special midnight opening of “The Dark Knight Rises.

Just a half hour drive from Columbine is the city of Aurora Colorado in which the latest ritual blood bath has been carried out in a hail of bullets. 71 hit and 12 dead.

Clad in a gas mask, ballistic helmet, and body armor from the neck down to the legs, the gunman burst into a theater after tossing in a couple of gas canisters. Was this a terrorist act from some fundamentalist Middle East group? No, it came from 24-year-old American James Holmes, described as “shy”, “high-achieving” and from a “good family.” He was in fact a college graduate with a bachelor’s degree in neuroscience. Tom Mai, a retired electrical engineer, said “the mother told him Holmes couldn’t find a job after earning a master’s degree and returned to school.” Holmes even left his apartment booby-trapped, a sort of double tap assault for those hunting him.

What can be said of this most recent disturbed outcry from modern civilization’s youth? I see it as a reflection of the perverse and twisted culture which this young person was faced with, an atomized society which commodifies everything in its site and turns all it can into a financial transaction of some sort. What is worth preserving of a society which destroys the future of its offspring with mountains of social debt in the form of exorbitant college loans, a degraded and polluted environment, no option for meaningful work, a two-tier class system of haves and have-nots, a rising Security and Surveillance State, and a world at war for the last of the earth’s resources? Of course this is all normal for a country that glorifies sociopathic behavior:

…Sociopathic behavior becomes normalized and even glorified in business culture, and the businessmen who are less sociopathic get eaten alive by the more sociopathic ones.

The entirety of business sociopathy is glorified by the nation’s culture, in art, media, etc. as tens of millions of Americans long to be the next Bill Gates, who is nothing more than a White Crips/Bloods gang member with glasses and a high IQ.

Less sociopathic businessmen who try to act decent are destroyed and then, for their decency, are attacked in common culture as losers, failures and even scum. Women avoid them and their families look at the ground when someone brings up their name. At the individual level, people who try to play fair and be nice are told that they are displaying loser attitudes and ordered to harden up and act more sociopathic.

Capitalism is really the normalization, rationalization, glorification and even deification of sociopathy across society.

My only surprise is that we don’t see more of these meltdowns taking place in this bankrupt and systemically corrupt system of ours. If you read medical journalist Robert Whitaker, America’s rise in mental illness has gone up in lockstep with “our society’s increased use of psychiatric medications.”

Another factor for America’s escalating random violence is the entrenched gun culture. America was awarded the dubious honor of being the ‘most armed country in the world’ by Reuters back in 2007. And lest we forget, America is the largest arms dealer in the world.

 
Surely the lack of effective gun laws that would prevent such massacres also is worth mentioning, thanks to the legendary lobbying power of the NRA whose motto was best exemplified by their now deceased spokesman Charlton Heston who said you can pry the gun “from my cold, dead hands.” America just loves its guns:

 
If there was a fast and sudden collapse of the economy and industrial civilization, America might be one of the last places you’d want to find yourself due to the above reasons I have described.

Dancing ‘Round the Issues Till the Circus Tent Collapses

19 Thursday Jul 2012

Posted by in Climate Change, Corporate State, Inequality, Military Industrial Complex, Neo-Colonialism, Wall Street Fraud

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I’m politically agnostic so I don’t really pay too much attention to the machinations of our faux democracy, best described as a “kabuki theater of empty formalisms that disguise the offstage conspiracies of corporate/state elites.” Politics has become like the fake professional wrestling of the WWF: a rigged and meaningless spectacle for the apathetic masses.

The latest titillating maneuver comes from the DNC in the form of a video illustrating King Romney waffling over if/when he’ll disclose his income tax returns. It features Romney’s Olympic-qualified dressage horse named Rafalca and was to be Volume 1 of a series of videos:


 
But apparently the video cut too close to the bone for the Romney Royalty, and since late Wednesday the DNC has decided to pull the plug on the series:

…At the time, the DNC was billing the video as “the first in a series of digital products highlighting Rafalca.”

But by late Wednesday, the DNC had done a complete 180 and decided it “will longer use the Romney’s Olympic-bound dressage horse to portray Mitt Romney as ‘dancing around the issues’ because it could be seen as offensive to the (Mitt Romney’s) wife Ann,” CNN’s Political Ticker blog reported….

…The catalyst for the DNC’s about-face on the wisdom of “highlighting Rafalca” was an interview, scheduled to air Thursday, in which Ann Romney told Good Morning America’s Robin Roberts, “It makes me laugh. It’s like ‘Really?’ You know, there’s so many people out of work right now, and there’s this guy right here that has the answers for fixing the economy, and all these attacks are going to be — they’re going to try everything. They’re going to throw spaghetti at the wall.”

What’s even more offensive and alarming is that the masses can’t readily see that, for all practical purposes, there is no difference between the two candidates we are being offered when it comes to reality-based issues such as the collapsing middles class, institutionalized criminal behavior on Wall Street, enthrallment to the banks and military industrial complex, and myopic vision on dire environmental issues like climate change which threatens to take us all down, rendering every other issue moot. But let’s humor the idea that humanity will still be here in any sizable numbers by mid-century and take a look at the financial viability of the 99%:

So we have the poverty-stricken plebs choosing between a wealthy elite and an exorbitantly wealthy elite. And many still think that’s a choice they need to make. To what end I don’t know. As some like to say, “Jesus wept!”
Cartoonist Ted Rall sums it up nicely:

Class War is Hell

America: The Mafia State (It’s no exaggeration)

25 Monday Jun 2012

Posted by in Corporate State, Inequality, Wall Street Fraud

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This is a stellar interview with Matt Taibbi and Yves Smith worth watching from start to finish. They cover a lot of ground in a short time including the shredding of the social fabric by Wall Street malfeasance and the fact that your grandmother’s life is more endangered by a high-finance businessman in a suit and tie rather than the local purse snatcher on the street corner. Remember when Lloyd Blankfein admitted that some of their financial instruments were of no benefit to society?


 
Excerpt on the comparisons with Wall Street and the Mafia Dons:

BILL MOYERS: You’re describing a corrupt financial and political system. And both of you in recent writings, your current article in “Rolling Stone,” which is devastating on the scam that the “Wall Street learned from the Mafia,” and a recent column you wrote about the mafia state, you’re both using that metaphor to apply to our financial and political system. When I read your pieces, you’re not playing with words there. You mean it.

YVES SMITH: Yeah.

BILL MOYERS: Why do you mean it?

YVES SMITH: Well, the mafia, when it gets to be big enough, first thing it has services that people feel they need if they’re in a difficult situation. So, for example, loan sharking. If you really need money, they do have the money. And people enter into these loan shark deals even though they know it’s going to be very difficult to pay 20 percent or more interest and they’ll have their legs broken if they don’t pay back.

And the banks actually behave very much in that manner when they find people who really need money. So you see this with credit cards, you know, that, or, and with mortgages. That if you hit– it’s not this if you hit any tripwire, that, you know, become in arrears, the banks basically act in this very extortionate manner and don’t cut any breaks.

MATT TAIBBI: And I think that there’s also this, they are the mafia because of their vast criminality in Wall Street now is that it’s bribery, theft, fraud, bid rigging, price fixing, gambling, loan sharking. All of these things, it’s all organized.

I mean, the story I just wrote about, which was about the systematic rigging of municipal bond auctions, which affected every community in every state in the country and all of the major banks were involved, including Chase.

They were rigging the auctions that were designed to create a fair rate of return on the investments that towns were getting on their– the money they borrowed for municipal bonds. And this is not like something that the mafia does. This is what the mafia does. The mafia has historically, it’s one of their staple businesses, is bid rigging for construction or garbage or, you know, street cleaning services, whatever it is.

They’re doing exactly the same thing. The only thing that’s different is there’s no violence involved. But what their method of control is that they’re ubiquitous. They have this incredible political power that the mafia never had.

YVES SMITH: And they also have what amounts to an oligopoly. I mean, for many of these services, you have a great deal of difficulty going beyond the five biggest banks, you know? This is– it’s the consequence of too big to fail is that when, you know, some of the smaller players, again, you know, like– JPMorgan buying Bear Stearns.

In the crisis, when the smaller players got sick, they were merged into the bigger players. So now if you want– for a lot of these services, there aren’t that many players for you to go to. You really have no choice in– other than to deal with the big banks.

BILL MOYERS: Congress is paid to be informed and to hold these guys accountable. Why don’t they ask the kind of questions you’re dealing with here?

MATT TAIBBI: People refuse to look at these banks and think of them as organized crime organizations.

They in their eyes, organized crime is always either the Italian mafia or the Irish mafia. This isn’t what it looks like. But that is who they are. And I think that they’re treated with a kind of deference and respect, because traditionally that’s not who they were. They were these icons of finance who helped build this country.

But that’s not who they are anymore. And I think, it’s hard for people to wrap their heads around that and treat them the way they should be treated.

YVES SMITH: Well, I think people don’t want to think that there’s something wrong with leaders. And CEOs are leaders of the business community. If you really believe that CEOs of businesses that are really fundamental to the economy are corrupt, you have to think of a very serious restructuring of the business and financial system.

And even if people kind of intellectually might be willing to contemplate that, they don’t really want to go to what the implications are. So it’s much easier for them to block out that thought.

Critical to remember is that the key cause of the short-term, predatory behavior discussed above is what is called the ‘financialization’ of capitalism over the last several decades. In other words, the productive aspect of the economy, such as manufacturing and research and development, were replaced by manipulation of the economy with financial instruments and creating wealth-extracting bubbles. An example of a corporation becoming financialized is GE:

Since over half of GE’s revenue is derived from financial services, it is arguably a financial company with a manufacturing arm.

Examples of financial bubbles in our economy are the dot-com bubble, the commodities bubble, the housing bubble, the student loan debt bubble, the credit card debt bubble, or even more recently the gas fracking bubble:

…Chesapeake and its lesser competitors resemble a Ponzi scheme, overhyping the promise of shale gas in an effort to recoup their huge investments in leases and drilling. When the wells don’t pay off, the firms wind up scrambling to mask their financial troubles with convoluted off-book accounting methods. “This is an industry that is caught in the grip of magical thinking,” Berman says. “In fact, when you look at the level of debt some of these companies are carrying, and the questionable value of their gas reserves, there is a lot in common with the subprime mortgage market just before it melted down.” Like generations of energy kingpins before him, it would seem, McClendon’s primary goal is not to solve America’s energy problems, but to build a pipeline directly from your wallet into his.

The numbers vary slightly on the internet as to the finance industry’s take of the total profits of the economy, but the overall trend has been an ever-increasing slice of the economic pie. Just before the financial meltdown of 2008, finance accounted for more than a third of total profit in the economy and it has come roaring back since then. The Free Market Economy has evolved from a supposed model of efficient use of capital for the benefit of production to the efficient funneling upwards of capital to the elite 1%. And of course there is the revolving door between the government and finance industry. The graph below shows the growth of the finance industry as a percentage of the total corporate profits since 1948:

American companies are now run by money men who have different priorities than those business leaders of the past. David Bollier explains:

We all know the story of enclosure as it applies to the commons. The lesser-known story is that businesses are enclosing themselves – aggressively cannibalizing their own internal productive capacities in order to maximize short-term profits.

Harvard business guru Clayton Christensen argues in Forbes magazine that business executives are so habituated to seeing the world through a scrim of financial abstractions that they are blindly undercutting their own long-term productive capacities. The problem is so pervasive, says Christensen, that “whole sectors of the economy are dying…”

Financialization could be called the degenerate, end-stage of capitalism where making money from money is the be-all and end-all of corporate decision-making.

Professor Wolff discusses with William Tabb this financialization of the economy in more detail here. Our economy has become a giant Ponzi scheme. This won’t end well.