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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wanderer - thanks for the feedback....  it is more balanced than my ranting... :)

Alice, from what I can gather, an individual goes into finance instead of engineering or medicine or science or liberal arts because there is more money in money markets.  As an educator, the conferences and journals of education often discuss the rush of high school students into colleges of finance for that specific reason.  Engineering and science are very vulnerable fields because they depend on political influences, i.e. life is to make and protect money or life is to develop one's full potential and interests while protect those who need help.

After the Great Depression and WWII there was a sharp turn to the left, politically because of all the hardships people, the common people experienced through those tough times.  Sacrifices made by wage earning families represent a tremendous blossoming of talents of many people who had no wealth but had great ideas.  Engineering flourished and with the influences of the Cold War, space research took off in a big way.  I don't know your age, but I remember very clearly when the Soviet Union put Sputnik into space before USA could get rockets to work. That set a lot of fires and those smarty-pant men and women who survived the Great Depression and flourished after WWII took up the challenge in a big way. 

A Personal note, During the Great Depression, my grandfather, father and uncles all lost their small businesses, including their buildings, equipment, trucks, homes and cars.  I have told before of the families moving into my grandparents home and I can remember the deepest part of the poverty.

Before WWII started, the government started building roads and railroads across the southern tier of the USA in order to move men and material from coast to coast.  My dad and all my uncles left to work on those project and mom and I joined dad and we lived in a 12 foot trailer in migrant worker camps. Without a doubt those years traveling and living with many races and religions made a profound impact on my world view and I am eternally grateful for that experience. 

During the war, all my family's men went on construction teams all over the world building air, army and navy facilities. Their wages were relatively low but they formed unions for better wages and working conditions. There were those who resisted the power of the working class, but in the end had to acquiesce because workers refused to be slave labor and the nation needed labor. All the family's women worked in war industries, my mom at Kaiser Aluminum driving trucks at the rolling mill. She earned really good money for women and was so good at people management was able to rise in position. During the war, child care became available to working women. 

After the war all the women came home giving up their jobs to returning soldiers, all the men straggled home at a slower pace as transports became available. Most child care support for working families ended. 

Then, something very strange happened. My parents, aunts and uncles and other wage earners refused to go back to pre-war conditions and wages. Massive riots occurred, legislation passed making 40 hour work weeks, paid vacations, health care through employment, retirement plans, grievance committees.  Even the women joined in this effort. 

Prosperity took off like skyrockets, cheap merchandise came from Japan and China, there were lots of new homemaking tools, i.e. washing machines, dryers, dish washers, easy to drive cars, and stuff like that. Pent up demand for products exploded and families went on a spending spree.  

Corporations and banks started issuing credit for homes and cars, and all the other stuff that made it possible for women to join the paid labor force. If we couldn't get something because we lacked cash, we CHARGED IT. Big time.  Individual, private debt began to grow and wages flattened out in relation to GDP. 

In 1980s, early, I bought my first computer and a statistical analysis program and started tracking wages, debt, GDP, and stuff like that.  

THERE, RIGHT BEFORE MY EYES I saw a bubble beginning to form.  Wages were flat, GDP began to rise exponentially. I began to read voraciously and discovered Kondratieff who said communism would fail because it did not reward individual effort. Socialism would fail because not all people contribute equally to production. Capitalism would fail because of the boom and bust nature of its structure with owners of capital becoming richer on the boom and bust sides and wage earners becoming poorer on both the boom and bust sides. 

I end my story here, not because I have run out of story, but because your eyes must be worn out and my fingers are tired. 

Joan - LOL - interesting what more time can give you in experience and predictive ability - what do you see happening from now on?

I wrote, but apparently failed to send a last paragraph to the above piece, but I was too tired.  I will rewrite it tomorrow, because I bring all the parts together to make sense of the whole of Wall Street Washington DC and religious dogma.  I am really interested in what comments come back because I am obviously writing from a bias.  

Alice, your fellow Australian, Steve Keen, can give you so much insight that it will knock your socks off. I have trouble listening and understanding Australian accent and you may find him easier to understand. His strong point is he has an outline on the screen as he speaks and slowly I have been able to understand him without the printed words. I haven't read his books yet because Spokane Public Library does not have his materials.  They have taken my requests for inter library loan. Here are a few videos you definitely want to watch:

Keen, Steve Debunking Economics

Best quality, there are many versions of this speech but I found this one to be easy to understand:

Keen Debunking Economics Oxford 2011 Monbiot Seminar

(1 of 3) Steve Keen on debt and the economy: How do we pay for all this? Oct 09.


(2 of 3) Steve Keen on debt and the economy: How do we pay for all this? Oct 09.


(3 of 3) Steve Keen on debt and the economy: How do we pay for all this? Oct 09.


Steve Keen’s Debtwatch


Oh cool Joan, thanks for these! I'll have a look at them hopefully over this week.

Joan - thanks for the links - nice to know he's about and on line too.....

I'll keep an eye on him...

Joan, I'd really like to see the research you did. Maybe you can rub some of your wisdom off on me?

Wanderer, I have found some people who make sense to me. When I took economics in college I could make no sense out of it and failed many courses.  I changed strategy and memorized lectures and books and did just fine. 

I started reading and listening to Steve Keen and he made absolute sense and it turns out the neoclassic economics makes no sense because it is based on assumptions that do not stand up to analysis.  I am not smart enough to have figured that out myself; I just assumed I was too dumb to understand financial markets. Keen helped me shed those thoughts. (see sites in previous comment. 

In reading Wolff, Stiglitz, and Keen; I agreed with their problem statements but had trouble with some of their remedies ... still need some thinking and discussing before I am able to confidently take a stand.  

Capitalism Hits the Fan - Richard Wolff

Joseph Stiglitz, Freefall (available on internet video


Awesome Joan. Maybe we can help each other figure this stuff out? I'll watch the videos, and I really should be doing some more reading as well, and if you tell me what directions you are heading in, and I tell you the same, maybe we'll chart a course through this stuff.

Wanderer, economics is too complex to understand if it were based on scientific principles, but it is not.  I like Keen because he has a background in math and engineering so he looks at conditions differently than I do. My most complex problems in life are how to keep egg yoke from turn black when I made hard cooked eggs. 

For me, it started with Wolff, the first Marxist material I ever read or watched. He made perfect sense until he offered his remedy which was to have everyone assume part ownership of their work. I don't see how that would work because some are ambitious and others are lazy, some are leaders and others are followers, some are exploiters and manipulators and others are altruistic and some are gullible. So, merit must come in there somewhere. 

We had a mom and pop grocery store in town. When they died the employes took ownership of the company and shared the profits. That didn't work because of the problems I cited. Now it is owned by URM and the employees have profit sharing rights. That seems to be working. 

Oh yes! by all means, let us put our heads together and see what we can discover. It is impossible to decipher economic systems when they hide important information (Stiglitz calls that unequal access to information) and manipulate markets by buying their own stock causing the price to go up, then sell their stocks and take the money elsewhere. The price then goes down and the no-nothing investors lose their shirts. 

Wanderer, I just ran across and article about Kondratieff.  I first heard of him in about 1977 that started me thinking serious about capitalism, its strengths and weaknesses. He was a Russian economist under Stalin and was to advise Stalin on development plans after WWII. 

Kondratieff predicted communism would fail because from each according to need, to each according to ability fails to take into account individual differences in ambition and sloth.  

He wrote that socialism would fail because it failed to consider differences in natural leadership and follower personalities. 

He wrote capitalism would fail because it had built into it's design boom and bust.  The owners of capital would become rich on both the boom and bust side and the owners of labor would become poorer on both boom and bust cycles. 

Stalin didn't like what Kondratieff said about communism and had him killed. There are very many articles, just Google Kondratieff. 

Kondratieff Wave

Marxism and the theory of "Long Waves"
Written by Alan Woods Tuesday, 14 November 2000




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