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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First of all I am not an economist, and I have really only very recently made any kind of effort at learning economics.

I think economics is one of the worst psuedosciences in the world. I tried to make sense of it when I was younger, but gave up. It is like a religion because it starts with assumptions about human nature and then makes formulas to back up what it wants to say. It never reflects the true costs of production and relies on externalities to justify costs.

I think you mean that it ignores externalities to justify cost.


Assuming that this is true, and I am not putting words into your mouth, I would say that you are both right and wrong. It is true that economics relies on a made-up principle of the rational actor and makes assumptions based on this initial assumption, and for that reason plus the reason that externalities are largely not factored in or taken into account, economics is missing a great deal of the picture. I think that it is also the case, however, that economics does see a great deal of the picture as well. The market, costs, trends, etc. are all accurately represented as far as the half-picture goes. There are a number of analogies I would make.


The first one is to the religious, which you pointed out already. I think that religion is also an exercise in half-truths. It is true that there is something bigger than ourselves, and that our motivations are not wholly wrapped up (if you are actually a good person) in the selfish pursuit of power and hedonistic pleasure. What they are missing is a realistic explanation for those things, all of which are quite possible to provide.


Politics is perhaps an even better example. Free-market capitalists see the virtues of the market (rightly I think), but think that it is the ONLY good, and that government is evil. Communists see the virtues of government (also rightly) as providing the path to the workers paradise, but see the market as wholly evil. But what is really necessary is an optimal balance between both, not a favoring of one to its extreme and to the absolute omission of the other. And here is an excellent pic which illustrates another analogy to politics:


I think you mean that it ignores externalities to justify cost.

Ignoring externalities would mean pretending they don't exist. However, the companies use them specifically as a way to lower cost to the consumer. It is a very deliberate action on the part of the companies.

O I C what you mean now. But of course the companies only acknowledge the externalities that help their case, while ignoring the ones that would hurt them?

Wanderer, Yes, this picture describes the tension and stressors involved in any relationship. I like your choice of words, "half truths". This reminds me of a three legged stool, one long leg representing corporatons, another long leg is government, and the third leg representing labor and it is shorter than the other two. 

I like that Joan. Or closer to my OP, the rich, the powerful, and the people.

Dee, in case you haven't seen this video, Keen talks about the errors of neoclassical economic theory.

Haha! About halfway through this video, just had to come back here and post a quote Keen relates. It goes something like, "don't overestimate sincerity. One of the worst things there is is the maniac chasing you down the street with an ax trying to chop your head off in the sincere belief that it'll be good for you." He's talking about the Neo-Classical economists who sincerely believe that they are right, but can't help notice the similarities to religion, right? That is really I think the scariest thing about religions, or any really bad philosophical position, because people get so overconfident in the belief that they are right that they become capable of some of the most dangerous things. Whew... :-(

Hey, and Max Keiser mentions Dylan Ratigan in there too, yay! Man I wish I could just study economics these days and learn how to invest, these guys know what they're talking about when most everyone else is still stuck with bad ideas, should be lots of money to be made out there... ah well, alas I don't really have the time to learn this new language.

You don't need to study economics to know that plenty of hard working people end up dirt poor.

Well that is true enough, but isn't it the case that we do need to study economics to demonstrate why they are poor, that it isn't their own fault, or that it is the fault of the failings of the system in which they are poor?

I was agreeing with you: What is more reasonable to believe, that the poor are capable of realizing their interests if only they would work harder,

I guess I will work harder on my comments.




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