The American Bear

› Transnational Capitalism | Robert Hunziker

[The] new global elite, according to Chrystia Freeland (Global Editor at Large, Reuters, who traveled with, and mingles with, the elites), The Rise of the New Global Elite, Atlantic Magazine, Jan./Feb. 2011: “Perhaps most noteworthy, they are becoming a transglobal community of peers who have more in common with one another than with their countrymen back home. Whether they maintain primary residences in New York or Hong Kong, Moscow or Mumbai, today’s super-rich are increasingly a nation unto themselves.”

This federation of convenience by the global elite is a lingering problem for the lower classes in America. The U.S.-based CEO of one of the world’s largest hedge funds told Chrystia Freeland that his firm’s investment committee often discusses the question of who wins and who loses in today’s economy. In a recent internal debate, he said, one of his senior colleagues argued that the hollowing-out of the American middle class didn’t really matter. “His point was that if the transformation of the world economy lifts four people in China and India out of poverty and into the middle class, and meanwhile means one American drops out of the middle class, that’s not such a bad trade.” Notice the CEO’s reference to “not such a bad trade” as representative of free market lingo, i.e., “trade.” Everything is measured in trade terms, like statistics… if you look in the mirror, you’ll see the reflection of a commodity.

This viewpoint is typical of how the global ruling class thinks, and proof positive of it is reflected in today’s politics in America. The right wing embodies this same viewpoint by striving to strip the federal government of public welfare services, privatizing governmental assets, and undercutting benefits to society at large, especially via manipulation of the federal tax code. This same occurrence is happening in real time right now in Greece, Spain, and Portugal as the cadre of elite technocrats out of Brussels, de facto capital of the EU, dictate nation-state policies to those three forlorn countries. The world’s elites love hard times/recessions because of the set up. It makes it easier for them to strip away government largess via austerity programs that they force upon governments, and it allows for undercutting the wages of average citizens as well as dismantling of governmental regulations. This, in turn, prompts protestors to congregate in the streets of capital cities, but over time, the capitalist class waits them out, temporarily residing in one of their homes elsewhere, away from danger, and with time on their side, the capitalists win. [++]

› A Rebellious World or a New Dark Age? | Noam Chomsky

Plutonomy and the Precariat:

For the general population, the 99% in the imagery of the Occupy movement, it’s been pretty harsh — and it could get worse. This could be a period of irreversible decline. For the 1% and even less — the .1% — it’s just fine. They are richer than ever, more powerful than ever, controlling the political system, disregarding the public. And if it can continue, as far as they’re concerned, sure, why not?

Take, for example, Citigroup. For decades, Citigroup has been one of the most corrupt of the major investment banking corporations, repeatedly bailed out by the taxpayer, starting in the early Reagan years and now once again. I won’t run through the corruption, but it’s pretty astonishing.

In 2005, Citigroup came out with a brochure for investors called “Plutonomy: Buying Luxury, Explaining Global Imbalances.” It urged investors to put money into a “plutonomy index.” The brochure says, “The World is dividing into two blocs — the Plutonomy and the rest.”

Plutonomy refers to the rich, those who buy luxury goods and so on, and that’s where the action is. They claimed that their plutonomy index was way outperforming the stock market. As for the rest, we set them adrift. We don’t really care about them. We don’t really need them. They have to be around to provide a powerful state, which will protect us and bail us out when we get into trouble, but other than that they essentially have no function. These days they’re sometimes called the “precariat” — people who live a precarious existence at the periphery of society. Only it’s not the periphery anymore. It’s becoming a very substantial part of society in the United States and indeed elsewhere. And this is considered a good thing.

So, for example, Fed Chairman Alan Greenspan, at the time when he was still “Saint Alan” — hailed by the economics profession as one of the greatest economists of all time (this was before the crash for which he was substantially responsible) — was testifying to Congress in the Clinton years, and he explained the wonders of the great economy that he was supervising. He said a lot of its success was based substantially on what he called “growing worker insecurity.” If working people are insecure, if they’re part of the precariat, living precarious existences, they’re not going to make demands, they’re not going to try to get better wages, they won’t get improved benefits. We can kick ’em out, if we don’t need ’em. And that’s what’s called a “healthy” economy, technically speaking. And he was highly praised for this, greatly admired.

So the world is now indeed splitting into a plutonomy and a precariat — in the imagery of the Occupy movement, the 1% and the 99%. Not literal numbers, but the right picture. Now, the plutonomy is where the action is and it could continue like this.

If it does, the historic reversal that began in the 1970s could become irreversible. That’s where we’re heading. And the Occupy movement is the first real, major, popular reaction that could avert this. But it’s going to be necessary to face the fact that it’s a long, hard struggle. You don’t win victories tomorrow. You have to form the structures that will be sustained, that will go on through hard times and can win major victories.

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› Mayor Bloomberg personally cheers up Goldman Sachs | Alex Pareene

On Wednesday, accomplished table tennis player Greg Smith announced in a New York Times Op-Ed that he was quitting his job at investment firm Goldman Sachs, because the firm’s “culture” has become, at some point in the last 12 years, “toxic.” Goldman Sachs responded with a spirited P.R. campaign in which it claimed that Smith was not actually a very important person to the firm, and a leaked memo from Lloyd Blankfein in which he argued that Goldman could not possibly be evil because a recent internal survey proved that Goldman employees enjoy working at Goldman.

Despite that very good spin, Goldman Sachs lost $2 billion worth of market value as its shares fell 3.4 in trading over the course of the day (“oh man, some guy says Goldman Sachs is evil? I HAD NO IDEA” — the market). Thankfully, one hero stands ready to defend Goldman Sachs from public scorn: New York City Mayor Michael Bloomberg.

Bloomberg actually visited Goldman Sachs headquarters todayto personally cheer up very sad bankers. Bloomberg met with Goldman head Blankfein and various other members of the 1 percent, in order to reassure them that they are good people who do good work, even though that is a ridiculous delusion that only fellow members of that class still believe.

“The mayor stopped by to make clear that the company is a vital part of the city’s economy, and the kind of unfair attacks that we’re seeing can eventually hurt all New Yorkers,” Bloomberg’s spokesman said. Bloomberg is a billionaire mogul who owns a financial information company, so Goldman Sachs and other major financial institutions are a vital part of his economy.

After his visit, Bloomberg continued his “stop piling on Goldman Sachs” tour on the radio:

“I don’t know whoever said what,” Bloomberg said on WOR Radio’s John Gambling Show.

“But even if it was said, it’s a few people and, you know, Goldman Sachs is a firm that’s been around for well over a hundred years and it’s a great firm.”

“It’s my job to stand up and support companies that are here in the city that bring us a tax base that employ our people and I’m going to do that.”

He called news coverage of the letter “ridiculous” and “not something we should do.”

We mustn’t cover bad things about Goldman Sachs, because if we do they might get mad and leave us, and then we will have no more Goldman Sachs!

And take note! As Mike says, “it’s a few people” or a couple of bad apples, rogues, etc. NOT SYSTEMIC. ROGUES ACTING ROGUE-ISHLY.

› Understanding Economic Suicide | Robin Hahnel

“The nest they are fouling is still our nest, but no longer theirs.”

Thanks to three decades of corporate sponsored globalization – supported by both center right and center left parties — giant corporations are now free to (1) locate production wherever wages, labor standards, environmental standards, and corporate taxes are lowest, (2) sell products produced elsewhere in the high income markets of the North Atlantic region, (3) collect royalties on “intellectual properties” from every corner of the globe, (4) leverage their global lending business through the roof with a guaranteed taxpayer bailout in their back pocket whenever a financial crisis threatens, and last, but not least, (5) rely on an overwhelming military force paid for by the American taxpayer to squash any who dare to threaten to take any of these “freedoms” away from them. So what if the North Atlantic region declines in relative economic power? So what if the middle classes in Europe and North America shrink to the size of middle classes in the rest of the world? So what if the dream that one’s children will have better economic lives dies for the 99%?

The future for the 1% and their children looks very bright indeed. They pay less in taxes than ever before. Because their fortunes no longer depend on one region alone, their income and wealth continue to rise spectacularly even while the North American region stagnates. The educational and healthcare systems that are falling apart are not services they and their children use. The jobs that are no longer there for many in the 99% are of no concern to those whose only “work” is to manage their own assets. The 1% now enjoys the loyal political services not only of right wing and center-right political parties, but of formerly center-left parties as well. With military drafts a distant memory, they need not fear that any hostility that proves “necessary” might inadvertently claim the life of one of their own children. In short, they are not fouling their own nest at all. Their nest never looked better.

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› Wall Street Fixer Rodge Cohen – Big Banks Key to American Global Dominance | Matt Stoller

Sometimes finance executives let slip the way they really feel: that they hold the world in the palm of their hands.

It’s not often that the people in charge admit what is really going on: a global game for political dominance. I just saw an interview with Wall Street superlawyer Rodgin (“Rodge”) Cohen of Sullivan & Cromwell, the secret force behind (among other things) the expanded emergency lending power of the Federal Reserve through section 13(3). You know, that’s the law allowing the Fed to lend unlimited sums based on whatever it wants to lend, a section amended in 1991 at Cohen’s behest. He was involved in “more than 17 deals” during the crisis in 2008, including the bankruptcy of Lehman Brothers, the $85 billion AIG bailout deal, and the takeover of Fannie Mae by the federal government. He is, as Bill Black said, the fixer of Wall Street. Here’s his quote, at minute 3:39 of this Bloomberg interview:

Hopefully we will not see the major financial institutions in this country disappear because if we do we will also see a loss of ability to influence events not only financially but also politically throughout the world.

That’s pretty clear. […]

There are always conspiracy theories out there about a global linkage between large financial institutions and American empire. They don’t, however, usually come from the people running the place.

› What Oligarchy Means: Small Groups of Multi-Millionaires Funding Almost All SuperPACs | David Dayen

Forget the five people you meet in heaven, here are the five people running the US election system these days.

We know how the super PACs have come to dominate the presidential campaign, but a closer look at financial-disclosure numbers shows how just a tiny handful of billionaires are dominating those super PACs. An analysis of January’s campaign-disclosure filings reveals that 25 percent of all the money raised for the presidential race that month came from just five donors. That select group gave $19 million to various super PACs, often in support of more than one Republican candidate. Those numbers come from both The Washington Post and USA Today, though neither gives a complete list of those five top donors of 2012.

Ari Berman has us covered. The list includes Harold Simmons, who has given to Perry, Romney and Gingrich this year; Sheldon Adelson and his wife, who are keeping Gingrich on life support; and Santorum pals Foster Freiss and William Dore. Also in the mix is billionaire investor Peter Thiel, a Romney angel.

If you want to extend the circle out to, say, 200 people, a report from Demos shows that about that many have contributed 80% of all SuperPAC money. These are the SuperPACs that have been a major determining factor in the GOP primary, and which swung many Congressional elections in 2010. This equals .000063 of the electorate.

I respect the arguments that Citizens United didn’t cause this all by itself. We had a messed-up election system before that Supreme Court ruling. But there has unquestionably been a cultural shift in recent years, with far more outright purchases of elections, using massive numbers. I would argue that the rise follows the rise in political economy of a select few. As the 1% spends to write the laws, they gain more power and a certain invincibility. So they can use that power on elections with relative impunity. One hand washes the other.