Dissecting some recent New York Time’s propagandist cheerleading on the fiscal cliff deal as “progressive taxation”, Yves Smith calls it as it is – ‘A Big Lie’. Her article appears in the NYT Examiner which is a site dedicated to analyzing the corporate spin of the New York Times.
When you have an economic system that rewards those who can most effectively exploit society and the environment, then psychopaths invariably rise to the top of the socio-economic heap. That’s why Obama has no hesitation in carrying out extrajudicial assassinations, or that former Countrywide CEO Angelo Mozilo lead the charge on profiteering from sub-prime mortgages, or that BP CEO Tony Hayward can set off an epic ecocide in the Gulf of Mexico and call it “tiny” and then complain that he “wants his life back.” The book ‘The Wisdom of Psychopaths: What Saints, Spies, and Serial Killers Can Teach Us About Success’ lists the top four jobs for psychopaths as:
1. CEO
2. Lawyer
3. Media (TV/radio)
4. Salesperson
I can’t believe that politicians didn’t even make it into the top ten.
Politicians are more likely than people in the general population to be sociopaths,” says clinical psychologist and author Dr. Martha Stout…”I think you would find no expert in the field of sociopathy/psychopathy/antisocial personality disorder who would dispute this,” Stout continued. “That a small minority of human beings literally have no conscience was and is a bitter pill for our society to swallow — but it does explain a great many things, shamelessly deceitful political behavior being one.” – link
But since America is a corporation or corporatocracy, essentially captured 100% by business interests, you can interchange the number one spot of CEO for the POTUS. Corporations write the legislation through bought-off politicians, control public opinion through mainstream media and policy institutions, degrade the education system into a conveyor belt of unthinking corporate drones for a life of corporate consumerism, and manipulate society through all other levers of power while crushing any uprisings with its panoptic security/surveillance apparatus.
In the video below, Chris Hedges talks about sacrifice zones like mountain top removal for coal in West Virginia, but knowing what we know about the state of the biosphere, in particular climate change and ocean acidification, we can say that the entire planet will soon be one big sacrifice zone. The “rapacious, immoral elites” are on track to take the entire planet down. What makes this oppressive system so immovable is that everyone is a participant, whether by choice or not.
Imagine a world where the elite’s professional frontmen, aka TV pundits and ‘talking heads’, framed the public debate and steered public opinion for a nation of 350 million people. In such a world, journalism became an infomercial formulated by such apparatuses as spin alley and fed to the masses as expert opinion and deep intellectual insight. Now imagine that virtually the entire nation voluntarily bought an electronic device for their home that would pipe all these fabricated talking points, along with the mind-numbing bread & circus entertainment, into their living space. We have, as Gore Vidal described, entered a digital fun house from which we cannot escape.
A novelty called television had begun to appear in household after household, it’s cold, grey distorting eye relentlessly projecting a fun house view of the world. Those who followed the ugly, new-minted word media began to note that often while watching television we kept fading in and out of the chamber of horrors… ~ Vidal
Occasionally an insightful article will be written which lifts, if only briefly, the veil of the American hologram and allows, for those brave enough to look, a glimpse of the conniving little man behind the curtain furiously working the levers to create the Great and Powerful Oz. Depending on how much you reveal of the dark truths lurking behind the curtain, you may eventually find yourself subject to unrelenting persecution and holed up in a dark solitary cell or some South American embassy situated in a vassal state. The long arm of Empire has a way of reaching those who cross her.
Lawyer and blogger Jonathan Turley is someone I frequently follow. Amongst his humorous work he also posts about serious subjects, one of which is the recently published The Pretense of Punditryby guest blogger Mike Spindell. In this post, Mr. Spindell sheds light on the inner workings behind the face of TV punditry that bombards you 24/7 and molds the conventional wisdom of the day.
What all of these shows have in common is that they are repeatedly populated by the same people, whether politicians, journalists, economists or political operators. This link gives the background of the truth of Sunday morning “journalism”. The casts rarely change and in all but the rarest of cases these guests make up what could be called our nation’s “Pundit Class”. They are seen as the “Serious People”, who lead America’s national debate on vital issues. I’ve been a “political junkie” since the age of ten. For many years I was misled into believing that these “Serious People” were really my intellectual betters when it came to public affairs and that political discussion must only exist within the ground rules of debate established by our “Pundit Class”. Beginning with the murder of JFK and in the ensuing disillusionment of the Sixties I’ve come to see that not only is this “Pundit Class” inherently corrupt, but only a rare few can barely be called intellectually informative. This group is in reality the paid propagandists of the elite 1% that rule this country and their main task is to limit the scope of our national debate.
The essay then goes into the recent plagiarism case of one of the “most esteemed members of the Pundit Class, Fareed Zakaria.” Zakaria, born in India and from the elite group of that country, is a courtier to the present Transnational Capitalism & Globalization that has been wreaking havoc on the working class and natural environment of every nation on earth.
“When Fareed Zakaria was suspended on Friday from Time and CNN, for plagiarism, this wasn’t merely justice, it was poetic justice: it rhymed. What it rhymed with was his own lifelong devotion to the global economic star system that he, as a born aristocrat in India, who has always been loyal to the aristocracy, inherited and has always helped to advance, at the expense of the public in every nation. He was suspended because, as a born aristocrat, who is a long-time member of the Council on Foreign Relations, the Trilateral Commission, the Bilderberg Group, and many other of the global aristocracy’s primary organizations, he is so well-connected that his writing-commissions are more than any one person can possibly handle, and he consequently cannot possibly actually write all that is attributed to him. He certainly cannot research it all.”
As a paid public relations person for the corporatocracy, Fareed Zakaria is armed with a cadre of writers who produce the carefully vetted, status quo viewpoints that he spoon feeds his millions of viewers. As Spindell points out, it was no surprise that a few days after the plagiarism accusations, an article appeared which exonerates Zakaria and brushes the case under the proverbial rug.
I think back to graduate schools papers I’ve written and wonder how I would have fared if I had “made a terrible mistake” in them through plagiarism. Would an investigation of my “isolated incident” and remorse have allowed me to continue in school? However, protecting Mr. Zakaria, one of the chosen, is not only important for his sake, but for the sake of these “News Entities” that rely so heavily on the “connected” pundit class to provide their“cogent” analysis of major issues.
How many other “Pundits” acting as the “serious” people are setting the parameters of the national debate through their appearances on Sunday Morning talk shows, News Channels, the PBS News Hour and it appears as paid guest speakers at supposedly meaningful conferences and conventions? The person who first came to mind as I read this article on Zakaria was Thomas Friedman. Friedman is a son of privilege who married into a billionaire family. He has been a champion of “Globalization”, which to me has always meant unbridled support for the multinational Corporatocracy…
…what is obvious and known about Friedman is that he is a pundit star, ranking with, or possibly above Zakaria in the firmament of “Serious People” who frame our national debate and dominate our national media. This is really nothing new in our country. In the past the “serious people” were the likes of Walter Lippman, and Scotty Reston. These past pundits and “cold warriors”, share a commonality with Zakaria and Friedman, in that they all serve(d) the interests of the Corporate and Monied Elite that run this country from behind the scenes. Indeed, I’m sure that you the reader could expand this very small list of those who are deemed acceptable to lead the “serious” discussion of our national/international issues.
I assert that the entire Liberal versus Conservative debate in this country is but a smokescreen that distracts us from the one most vital issue. Our nation and indeed the world is and has been controlled by an Elite representing those with most money and power. Their first allegiance is to themselves, their class and to the belief that they alone are fit to rule us all. Call it what you will, but to me it is the continuation of feudalism in modern guise. Just as in feudalism there were “Courtiers” who gladly did the bidding of their “Royal Masters”, in order to enrich their own lives. Most of the “Courtiers” were either born to, or became part of the elite, while maintaining the pretense of speaking for the benefit of all humanity…we are surrounded by experts, who in reality are propagandists purveying non-existent mythology to keep us in the thrall of the Elite…
Interestingly, Matt Taibbi has also written about the fraudster Thomas Friedman, hypnotist to the boob-tube worshipping consumers, here and here:
When some time ago a friend of mine told me that Thomas Friedman’s new book, Hot, Flat, and Crowded, was going to be a kind of environmentalist clarion call against American consumerism, I almost died laughing.
Beautiful, I thought. Just when you begin to lose faith in America’s ability to fall for absolutely anything—just when you begin to think we Americans as a race might finally outgrow the lovable credulousness that leads us to fork over our credit card numbers to every half-baked TV pitchman hawking a magic dick-enlarging pill, or a way to make millions on the Internet while sitting at home and pounding doughnuts— along comes Thomas Friedman, porn-stached resident of a positively obscene 11,400 square foot suburban Maryland mega-monstro-mansion and husband to the heir of one of the largest shopping-mall chains in the world, reinventing himself as an oracle of anti-consumerist conservationism.
Where does a man who needs his own offshore drilling platform just to keep the east wing of his house heated get the balls to write a book chiding America for driving energy inefficient automobiles? Where does a guy whose family bulldozed 2.1 million square feet of pristine Hawaiian wilderness to put a Gap, an Old Navy, a Sears, an Abercrombie and even a motherfucking Foot Locker in paradise get off preaching to the rest of us about the need for a “Green Revolution”? Well, he’ll explain it all to you in 438 crisply written pages for just $27.95, $30.95 if you have the misfortune to be Canadian.
I’ve been unhealthily obsessed with Thomas Friedman for more than a decade now. For most of that time, I just thought he was funny. And admittedly, what I thought was funniest about him was the kind of stuff that only another writer would really care about—in particular his tortured use of the English language. Like George W. Bush with his Bushisms, Friedman came up with lines so hilarious you couldn’t make them up even if you were trying—and when you tried to actually picture the “illustrative” figures of speech he offered to explain himself, what you often ended up with was pure physical comedy of the Buster Keaton/Three Stooges school, with whole nations and peoples slipping and falling on the misplaced banana peels of his literary endeavors…
Matt has also written about the master propagandist Fareed Zakaria here:
From a distance I’ve always vaguely admired the skills of Newsweek’s Fareed Zakaria, who is maybe this country’s preeminent propagandist. Any writer who doesn’t admire what this guy does is probably not being honest with himself, because being the public face of conventional wisdom is an extremely difficult job — and as a man of letters Zakaria routinely succeeds, or pseudo-succeeds, at the most seemingly impossible literary tasks, making the sensational seem dull, the outrageous commonplace, and rendering horrifying absolutes ambigious and full of gray areas.
Wheras most writers grow up dreaming of using their talents to stir up the passions, to inflame and amuse and inspire, Zakaria shoots for the opposite effect, taking controversial and explosive topics and trying to help rattled readers somehow navigate their way through them to yawns, lower heart rates, and states of benign unconcern. He’s back at it again with a new piece about the financial crisis called “The Capitalist Manifesto,” which is one of the first serious attempts at restoring the battered image of global capitalism in the mainstream press.
This writer has done work like this before, using a big canvas to rework an uncooperative chunk of history in the wake of a crisis. Zakaria is probably best known for his post 9/11 “Why Do They Hate Us?” article, a sort of masterpiece of milquetoast propaganda that laid the intellectual foundation for a wide array of important War on Terror popular misconceptions, not the least of which being the whole “They hate us for our freedom” idea. One of Zakaria’s central arguments in that piece was that poor struggling Arabs were driven to envious violence by the endless pop-culture reminders of American affluence and progress. It was just too much to take, seeing all those cool blue jeans and all that great satellite TV.
In one exchange in that piece Zakaria talks with an elderly Arab intellectual who scoffs at Zakaria’s suggestion that Arab cities should try to be more like globalization-friendly capitals like Singapore, Seoul and Hong Kong. The old Arab protests that those cities are just cheap imitations of Houston and Dallas, and what great and ancient civilization would want that?
I thought the old Arab’s comment was funny, but Zakaria imbued it with serious significance. “This disillusionment with the West,” he wrote, “is at the heart of the Arab problem.” And while witty Arab potshots at tacky southern strip-mall meccas like Houston were significant enough to put high up in Newsweek’s seminal piece about the root causes of 9/11, things like America’s habitual toppling of sovereign Arab governments and installation of ruthless dictators like the Shah of Iran were left out more or less entirely (Zakaria managed to write a whole section on the Iranian revolution without even mentioning that the Shah come to power thanks to a CIA-backed overthrow of democratically-elected Mohammed Mosaddeq, whose crime was ejecting Western oil companies from Iran)…
Just as American journalism has become a paid spokesman for the exploitive economic system controlling the world, so too has the entire economic profession been bought off: How The Federal Reserve Bought The Economics Profession…
The Federal Reserve, through its extensive network of consultants, visiting scholars, alumni and staff economists, so thoroughly dominates the field of economics that real criticism of the central bank has become a career liability for members of the profession, an investigation by the Huffington Post has found.
And for one more example, the Great Wall of Propaganda extends to our system’s need for perpetual war as well…
…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.
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.
