The Unholy Alliance between the rich (Wall St.) and the powerful (D.C.)

(This was also posted in the group "Left Wing Atheists")

 

I have come a long way in three years. I was so naive. I couldn't wait to vote the Republicans out of office, so I registered myself as a Democrat and woke up at 5am to go stand proudly in line to vote for Obama. Like many of us since then, I now realize what a sucker I was. I had high hopes that Obama was going to nationalize the banks when he took office and start loosening the hold the bankers have around our throats. Well, that didn't happen, and instead he went after health care. We all know what he has and has not done since, with the latter more than overwhelming the former. So I got frustrated, as most of us have, that nothing changed with Obama. I got determined to educate myself and find out what the real problems are, and what the real solutions are.

 

I started watching a lot of MSNBC. At first, I stuck with Hardball with Chris Matthews. While that kept me informed as to what the two political parties were up to, I was far from satisfied. Then one day I tuned in a little early and caught a little of Dylan Ratigan. His personality turned me off a little at first, but the next time I saw his show I was mesmerized. Hooked. Here was a guy who was finally speaking about the real issues, the fundamental structural problems underlying the mess we are in. If you know the show, much of what I am about to say will sound like repetition, but these are what I think the real problems in America are.

 

There are 6 industries which own the US government, the military-industrial complex (e.g. Lockheed Martin), health care (Big Pharma, health insurance), banking, energy (oil, Halliburton), agribusiness (think Monsanto), and telecommunications (e.g. the phone companies that rip us off). The heads of these industries use their spectacular wealth to buy politicians. In fact, 94% of our elections are now won by the candidate who raises the most money. Obama was no exception. Yes, he raised more money from small donations than anyone had before, but he also raised more money from LARGE donations than ever before. Goldman Sachs was his single biggest campaign contributor in 2008. We all know that if a candidate tries to go against any of these industries, they use their fabulous wealth to take out attack ads so that they don't stand a chance (think swiftboating). As long as our two political parties play by the rules, they can divide up the country in any other, meaningless way they want.

 

They have a very cozy relationship, these plutocrats. The politicians look the other way while the rich engage in insider trading. They even call up their friends on Wall St. and give them insider information as to policy changes which have financial ramifications (and then engage in a healthy amount of insider trading themselves). Then the rich spend huge amounts of money in lobbying efforts to convince the politicians as to how the laws should be written. They have managed to rig, to their vast benefit, the tax code, trade policies, and banking regulations to siphon money from the American people and into their pockets. They pay lower taxes (or none at all) than average American individuals and businesses. They trade with countries like China which can make products far cheaper than we can make it here, eliminating American jobs while flooding the markets with cheap goods (think Walmart). But the banking "industry" seems to have benefited to even more egregious levels.

 

Our US government has allowed a $700 trillion, completely invisible and unregulated swaps market to exist without requiring all of these transactions to take place on a visible (and regulatable) exchange. There are no capital requirements, which means they can trade without having anything of value to put up as collateral. And when their bets go bad, the Fed just sends them a check to the tune of $29.6 trillion of our tax-payer money so far since the crisis began. And I thought we had a deficit! Where are we getting all of this money from? Are we just printing it?

 

Meanwhile 1 in 15 Americans now live in poverty. 18% of us are unemployed (that's the "real" unemployment figures), and that's not even counting the underemployed. Incomes are falling, debt is mounting. People are left homeless while foreclosed homes sit empty. Income and wealth inequality are at their highest levels since the Great Depression. Meanwhile our elections are being put up for auction and neither political party will stand up to these powerful ruling interests. If this isn't a state of unjust affairs, then I don't know what is. These are issues that shouldn't even be restricted to the left, we are all being oppressed. But while we on the left are waking up, those on the right are drifting towards a libertarian philosophy which plays right into the hands of the rich. With no government around, who could possibly stand up to the rich?

 

We need to retake our government, not break it down into uselessness. And we need large-scale structural solutions to address these mounting problems. We need systematic and system-wide changes to our democracy and our government. We need to weed out waste and abuse of power at all levels. We need to eliminate subsidies for oil companies and stop sending money without strings attached to the bankers. We need to break up the banking cartels so that never again will an institution be "too big to fail". We need real regulations on the banking industry, and that begins with having capital requirements and putting the swaps market on a visible exchange. If we change the way Wall St. does business, they will make money honestly and contribute real value to America rather than being fueled by the need to create more and more debt. We need to restructure debt to help out students and homeowners. And to that end I would suggest literally bailing out the American people. If we are going to print money, why not give it directly to Americans so that they can use it to pay off their debts to the banks?

 

We need to eliminate superpacs and overturn the Citizens United ruling by the Supreme Court that makes corporations people and money into protected free speech so that the rich can't talk more loudly than everyone else. We need a real energy plan, and we need to improve our energy efficiency so that we can approach a % in the 90's like other modern industrialized nations have rather than the 34% efficiency we are now sitting at. We need real environmental regulations, and we need to completely restructure our educational system so that we can keep up with the rest of the world. And we need to end privatized profit but socialized risk for the wealthy, and incentivize investment in America and it's people.

 

The political discussion has been framed by our politicians as being about ballooning debt. While certainly this is a huge problem, I am quite certain that if we address the real problems in America, our national debt problem will also be solved. If we stop war-mongering and being the arms-dealers to the world, we won't have huge costly wars to pay off. With an economy that puts people to work, our social programs will have plenty of funding to continue operations, keeping Americans healthy and financially supported throughout old age.

 

We are really running out of time. The changing environment is going to make all humanity come together, one way or another. We can come together now and make the necessary changes to our lifestyle and our society so that we can all live on this earth in peace, or the catastrophe to come will be marked by the most violence, starvation, and suffering the world has ever known. And the US needs to lead the way. When the catastrophe comes, humanity will largely blame Americans for it, and rightly so. There will be enough blame to go around, but the American people can do something about it now, while we still have time. If we do not raise our heads up out of the herd and take our country back from the oligarchs who hold us as slaves and hostages, the lion's share of the moral responsibility for the future of humanity will be ours to bear.

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Oh! No not your fault, my comment was on a previous page so i didn't see what you were responding to.

Ever heard of the saying - don't work harder - work smarter!

That is true, if you are one trying to climb up a ladder to success while the rungs keep falling out from under your feet, and the rungs are greased so hands can't keep a grasp, there develops a natural widening of the gap between rich and poor. 

This problem of class-gap is a systems problem, all parties participate to keep the system going.

*Banks offer loans to people that can't afford them,

*people buy on credit things they can't afford,

*government takes away restrictions that try to prevent dysfunction,

*and in the meantime our careless greed damages the planet.

We are moving out of the Age of Petroleum toward an Age of Renewable, Sustainable Energy and nothing will be the same again. The Age of Petroleum started when oil was discovered, whenever that was, it replaced the Age of  Whale Oil; nothing was ever been the same after that event. 

Of course I exaggerate with "nothing" and "ever" but they are used to make my point. 

 

Burning petroleum for fuel was preceded by burning coal, which was preceded by burning wood. When we cut down all the trees, we discovered coal. When we used up all the coal, we discovered oil. Hopefully we will turn to green energy before all the oil runs out.

Wanderer

Hopefully is corrrect. The solar energy can be biggest source of energy but unfortunately, the efficiency of it's conversion in to electricity is very low and any means to see it improve substantially are not in sight.It is for this reason that there is greater tendency to look at nuclear power plants as the next alternative. If we can use the same nuclear reaction that takes place in a hydrogen bomb to generate electricty, then we could have a cheap and ample source energy, but the safety of such a method of power generation is still not clearly known. 

Although in a perfect world I would be completely against nuclear power as its waste is the most dangerous of all, not to mention the security issues and safety issues, because of our dependence on oil and its contribution to global warming, and the inability of green energy to meet our current and projected energy needs, I'm afraid I have to agree that the option to use nuclear energy has to be considered.

 

There is a kind of nuclear reaction using thorium which has been proposed, it would be much cleaner, much more efficient, much cheaper - in short, it would be waaay better than using uranium or plutonium, but right now we haven't developed the technology or the expertise to use it. China however is reportedly investing heavily in creating thorium-powered nuclear plants. We are far behind... :-(

Wanderer, you are right, and look at all the lands that were cleared of forests leaving behind a whole new set of problems. 

Easter Island : A Case Study in the Response to Resource Depletion

http://energybulletin.net/node/52370

Man and the Mediterranean Forest: A History of Resource Depletion

http://www.worldcat.org/title/man-and-the-mediterranean-forest-a-hi...

Protect Forests

http://www.greenpeace.org/eastasia/campaigns/forests/

Forest depletion in Madagascar 

https://www.google.com/search?q=forest+depletion+Madagascar&hl=...

 

The trees, the trees! Won't somebody think of the trees! :-)

Well Joan, I did finally get through the Keen article. Good stuff. I didn't manage to figure out where this second link was pointing me towards. I'm keen on Keen, though. This first article was about how the Neo-Classical economists (whom I've already been convinced have gotten the classical economists wrong) under-appreciate the role private debt has in the macro-economic sphere. I'm learning a lot. One thing he didn't mention was that the idea that reductions in private debt, not being merely the absence of a transfer of wealth from one person to another, also contributes to a clotting of capital at the top, which starves the rest of the organism. Unless you buy into trickle-down economics, the most essential role that capital plays is to provide liquidity throughout the organism, so lending is a vital service which is withheld when credit dries up. I don't know how the Neo-Classicists overlook these facts, but it seems clear that permitting the wealthy to just sit on their wealth (ill-gotten or not!) while the rest of the country flounders is a recipe for making a bad situation worse, which is exactly Keen's conclusion. Thanks Joan, on to the next links!

Wanderer, I agree with you and wonder why there hasn't been a link between debt and interest payments that at one time were usurious and that is how the working class pay far more for money than it is worth. The attraction of things, with the help of mass advertising, encourages wage earners to buy on credit, pay interests rates that sky rocket if late for even one payment. 
Those who use debt to build capital, and then live within their means come out farther ahead at the end of their lives than those who pay for money.

An interesting twist is the money if fiat money, which means it isn't based on anything but promises. More money in circulation, more products to purchase on credit and the consumer gets caught in that awful web.

 

As far as straight economics is concerned, I don't think anyone has yet drawn any distinctions between debt taken on to put into an investment, whether that be a house or education or to start a business, etc., something that will increase the borrowers chance of increasing their wages and so get something of greater value than the loan itself, and debt taken on frivolously. I would of course be all for a government-backed effort to make two classes of loans, one which goes towards something that is widely agreed to be a worthwhile investment (let's call that class A), and one which covers those things which have not been determined to be aimed at investment (class B). Class A should be given all manner of protection, such as being subsidized by the government and with maximum interest % being set low. Class B loans, on the other hand, should be highly regulated, the poor should be prevented from taking them, etc. The aim should be the "rising tide raises all boats" philosophy, so that everyone does better and the economy as a whole is healthy, which benefits the rich in creating a much larger consumer base as an offset to the lower interest rates they charge. The former has the good of everyone in mind, while the latter is the quick and easy way for the rich to make money off the backs of others and ultimately has no one's long-term interests at heart.

Wanderer, your Class A & B loans makes sense. And the banks should qualify the borrower instead of luring borrowers into a mortgage or contract they can't maintain. Also, I would like to see the usury laws reinstated. Back 35 years ago, it was legal to charge higher than usury rates for speculative loans, and that implies higher risk requires higher interest; that makes sense to me. 
Alice asked quite a while ago if there were a legal way to make a fortune, and I think legally it is possible, but a lot of moral and ethical limits have to be jumped. Remember the lad that was featured by President Reagan in one of his State of the Union speeches? ... she was an owner of a taco restaurant and made a fortune. He spotlighted her to prove that USA is a great place to make money. He didn't say anything about working conditions in her place, wages of workers, hours, or safety. He focused on what was important to him ... wealth. 

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