More Dangerous

 

Matt Taibbi calls the forces arrayed against Trump more dangerous than the Pro-Wrestler-Hall-of-Fame-in-Chief. “My discomfort in the last few years, first with Russiagate and now with Ukrainegate and impeachment, stems from the belief that the people pushing hardest for Trump’s early removal are more dangerous than Trump.”

I agree.

There’s nothing in the Constitution about allowing secret intelligence agencies to vet our chief executives. This state of affairs could hardly be considered a democratic republic and instead has all the hallmarks of an empire.

I’m not a Trump supporter and I find many of his policies and actions to be abhorrent. That being said, these are not the reasons that the establishment has opposed Trump. Instead they’ve attacked him for the reforms that he campaigned on. If you’ll recall from the way back machine, Trump campaigned as a populist and, crucially, to the left of Clinton on foreign policy, raging against the disastrous free trade and financial arrangements that have left millions of hard working Americans behind, while criticizing the disastrous regime-change wars and promising to improve relations with Russia. He also enraged the neocons and liberal-interventionists with a devastating take-down of the invasion of Iraq.

I believe that Trump’s apostasy is the reason for the elite hostility towards him. After all, these domestic and foreign policies are the means by which the deep state maintains the US empire. We only have to witness the reaction to Trump’s decision to leave Syria to see this dynamic in real time. Republicans, Democrats and the corporate media have united in decrying Trump’s actions, which really amounts to keeping a campaign pledge by exiting one of the many disastrous regime-change wars.

It’s not just Trump who’s taking flak. The media’s shameful attack on Tulsi Gabbard demonstrates the enormous costs of challenging the bipartisan, imperial consensus that regards war as the natural state of affairs. Indeed, one of the most pernicious outcomes of Russia-gate is that now any criticism of the imperial nature of US foreign policy which cannot be labeled false or misleading gets labeled a talking point of Russia or Putin by those who support and defend the status quo of US world hegemony. It’s now literally a Kremlin talking point to blame both parties for the disastrous US foreign polices of the last decades.

Looking back back at everything that’s happened since Hillary lost the election provides a good perspective to the non-stop insanity of it all. For starters, Russia-gate has resulted in a climate where every move to improve relations with Russia is proof of the devious Putin’s control over Trump. Even the New York Times, normally the bastion of political correctness, depicted Trump and Putin as icky-gay-lovers. Then there was the non-stop freak-out over the possibility that Russian hackers tampered with our precious democracy and overwhelmed Facebook with their devious bots.

For me the most disconcerting reaction has been liberals, after decades of mistrust and hostility, turning on a dime and embracing the FBI and CIA as saviors while demanding that the secret intelligence agencies carry out a coup for the good of the country. Losing their minds doesn’t even come close to describing this cosmic transformation. Then there’s been the corporate media, led by the New York Times, coordinating a non-stop propaganda campaign against Trump.

I’m convinced that the bipartisan freak-out over Trump’s foreign policies coupled with the impeachment drive is part a larger war against populism that’s being waged worldwide by an feral elite that’s responsible for so much suffering. The impeachment hearings and the mass hysteria surrounding them are an attempt by these same elite to demonstrate the cost of challenging the imperial consensus.

You do not honestly believe they are going to let Trump serve a second term, do you? 

Not that Donald Trump is a populist hero. Far from it. Trump is a narcissistic reality TV star and pro-wrestler MC. As a presidential candidate he was cunning enough to recognize that 2016 was an anti-establishment election and use the avalanche of populist anger that had been building since at least 2008 when the bankers were bailed out while everyone else was left to twist slowly in the wind.

Here the dirty little secret–getting rid of Trump will not put the paste back in the tube. The populist anger is not going away. Americans and the other citizens of the world are no more thrilled about their future today than when the voted for Brexit and Trump and other populist candidates and measures.

 

Update:  A lawsuit by Judicial Watch has produced damning proof that Rod Rosenstein, former Deputy Attorney General, was a key figure in enabling, at a minimum, the deep state’s coup. Specifically, the lawsuit forced the release of 145 pages of Rosenstein’s communications that include a one-line email from Rosenstein to Mueller stating, “The boss and his staff do not know about our discussions.” They also include “off the record” emails with major media outlets around the date of Mueller’s appointment.

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Second Chance

 

I always knew that the national security state and their corporate media handmaidens would keep Russia-gate alive if for no other reason than to hide their culpability in the attempted coup against the president. And with Trump’s reckless style it was only a matter of time until the opportunity presented itself. Now it seems that Trump’s clumsy and stupid attempts to link Joe Biden and son to corruption in Ukraine has given Democrats a chance to revive their discredited Russia-gate crusade.

And make no mistake, Ukraine-gate is a second chance for them to depose a president who they never wanted while demonstrating the cost to any future leader who might have his or her independent thoughts about US foreign policies and our worldwide empire.

In discussing the US empire with fellow Americans one topic crops up repeatedly: We have to maintain an American empire for the good of the country and the world so the bad guys don’t triumph.

But that’s not how it works. The people that control and implement the US empire service a trans-national oligarchy that owns the banks and corporations that control our world. There able to do that without resorting to brute force by being able to control public narratives using media ownership, lobbyists and think tanks, thereby manipulating entire governments and international affairs.

Furthermore, in case you haven’t noticed it, you, as an average American, are expendable. Over the last 30 plus years corporations have ruthlessly dismantled and destroyed our manufacturing base and impoverished our working class, leaving millions of Americans to die deaths of despair. Meanwhile since 9/11 the US empire has invaded Afghanistan and Iraq, while regime-changing Libya and attempting to overthrow the government of Syria. Since we invaded Afghanistan in 2001, we have spent more than $5 trillion and incurred liabilities for veterans’ disabilities and medical expenses of at least another trillion dollars, for a total of something over $6 trillion for military efforts alone.

This is money we didn’t spend on sustaining, still less improving, our own human and physical infrastructure or current and future well-being. We borrowed it, of course.  Estimates of the costs of servicing the resulting debt run to an additional $8 trillion over the next few decades.  Future generations of Americans will curse us for failing to invest in education, scientific research, and transportation. And for good measure, we’ll also leave them in hock for at least $14 trillion in war debt.

These forever wars and costs they incur expose an important reality. The agencies that make up the national security state or deep state are not there to protect and serve the American people. They are there to protect and serve the oligarchs, who profit from the forever wars and a continuation of the military/industrial/complex.

Meanwhile, the Ukraine-gate scandal has been driven by an account of a “heroic” CIA whistleblower, who felt obliged to report Trump’s phone call with the Ukraine president. However, we should always remember that when dealing in the world of deception and intrigue that defines intelligence operations, it is often difficult to determine whether any individual linked to an intelligence agency is telling the truth. Indeed, in the United States, there are examples of intelligence officials committing perjury and lying to Congress on several occasions with no consequences, and of intelligence officials feeding politically motivated and untrue information to agency assets in the media.

And this brings us to the other factor in the current scandal–the corporate media’s role in Russia-gate, and the fact that they colluded with the national security state to drive the narrative of treason. It should be obvious by now but the corporate media likewise does not exist to serve you but the service the powerful. Indeed, what we’re finding out is that the corporate media along with the new social media sites in Silicon Valley are there to serve the oligarchs that use the American empire to advance their agendas.

However, tribalism keeps Americans focused on their home-team media, with liberals glued to NPR and the New York Times, while conservatives believe every utterance from FOX News. Likewise, both liberals and conservatives are loyal to their teams turn at ruling the empire. Trump supporters fervently believe that their standard bearer is battling the deep state as he goes about pursuing the very same empire centric policies as Obama before him. And liberals, after decades of suspicion towards the CIA and FBI, immediately transform them into bastions of truth and integrity in their pursuit of Russia-gate. It would be funny if it wasn’t so tragic.

The only silver lining in the whole impeachment cluster-fuck is the potential to fatally discredit both of our corrupt oligarchic political parties while helping hasten the end of the American empire.

 

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Over there

 

My friends and loved ones grow weary of my focus on foreign policy. They’re much more concerned with the pressing domestic issues facing our country.

But what happens over there affects us over here. And what happens over there is largely the result of the US empire. Indeed, the US is the dominant hegemon with a worldwide empire of bases and client states.

This state of affairs seems to elude most Americans due to their ignorance of foreign affairs coupled with a sophisticated domestic propaganda narrative where the US is depicted ceaselessly as a selfless, indispensable nation upholding democracy and freedom.

Meanwhile, that whole empire thing will not stop intruding.

Yesterday Democratic Speaker of the House, Nancy Pelosi announced that impeachment proceedings against President Trump are underway due to a country–Ukraine –that most Americans couldn’t find on a map if their life depended on it.

With the Russia-gate hoax proving to be the “most fraudulent political scandal in American history,” as Princeton Professor Stephen Cohen puts it, now we have its twin–Ukraine-gate.

Both Russia-gate and Ukraine-gate concern the US empire and the national security state or deep state that’s metastasized under it’s malign influence. I firmly believe that both are the result of Donald Trump’s desire to deviate from the script of empire. If you’ll recall, Trump promised to end America’s regime-change-happy foreign policies and reset relations with Russia which had deteriorated drastically under his predecessor Barak Obama, who’d green-lighted the Ukrainian coup in 2014.

Going further, both of these manufactured scandals are attempted coups against a sitting president by the intelligence agencies that make up a key node of the national security state. And, of course, our vaunted “free press” is aiding and abetting this effort. It’s clear that the corporate media does not care about truth and they don’t care about justice. They do not care about holding power to account, because they exist only to serve power.

What’s humorous is that Ukraine-gate promises to imperil the DNC’s favorite candidate–former Vice-President Joe Biden. In fact it was Joe’s Biden big mouth that brought the issues back into light. In January 2018 he gave a talk at the Council of Foreign Relations and explained how he directly threatened (video) to withhold money to blackmail the Ukraine into firing a prosecutor general who was seen as corrupt:

“And I went over, I guess, the 12th, 13th time to Kiev. And I was supposed to announce that there was another billion-dollar loan guarantee. And I had gotten a commitment from Poroshenko and from Yatsenyuk that they would take action against the state prosecutor. And they didn’t.So they said they had—they were walking out to a press conference. I said, nah, I’m not going to—or, we’re not going to give you the billion dollars. They said, you have no authority. You’re not the president. The president said—I said, call him. (Laughter.) I said, I’m telling you, you’re not getting the billion dollars. I said, you’re not getting the billion. I’m going to be leaving here in, I think it was about six hours. I looked at them and said: I’m leaving in six hours. If the prosecutor is not fired, you’re not getting the money. Well, son of a bitch. (Laughter.) He got fired. And they put in place someone who was solid at the time.”

Biden did that at a time when his son lobbied for the Ukrainian company Burisma who the prosecutor he wanted fired investigated:

“U.S. banking records show Hunter Biden’s American-based firm, Rosemont Seneca Partners LLC, received regular transfers into one of its accounts — usually more than $166,000 a month — from Burisma from spring 2014 through fall 2015, during a period when Vice President Biden was the main U.S. official dealing with Ukraine and its tense relations with Russia.The general prosecutor’s official file for the Burisma probe — shared with me by senior Ukrainian officials — shows prosecutors identified Hunter Biden, business partner Devon Archer and their firm, Rosemont Seneca, as potential recipients of money.”

There is no direct evidence that Joe Biden told the Ukrainians to stop the investigation into Burisma. But it was not difficult for the Ukrainians to figure out that ending the investigation into the company that Joe Biden’s son worked for would help them with further requests to him.

How will the Democrats and corporate media explain that what Trump did was wrong or even criminal while insisting that what Joe Biden did was above board?

Instead of attacking Trump’s for the horrid things he’s actually doing the Democrats are conspiring with the intelligence agencies to defend the deep state while engaging in the worst kind of political theater knowing full well that the American public doesn’t have a clue.

Personally, I think the Democrats need a big distraction because former CIA chief John Brennan is becoming the focus of the investigation into how Russia-gate began and proceeded. And if Brennan is indicted then the whole corrupt Russia-gate fabrication would come to light, including the treasonous Democratic role.

This is a clear cut case where knowledge of foreign policy would help make sense of an important topic and to see the impeachment proceedings for what they truly are–kayfabe.

The impeachment proceedings may not involve fellatio and a blue dress this time but they promise to be every bit as stupid.

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All about the Benjamins

 

I’ve talked about the deep state at length but the whole Epstein affair casts this dynamic in a much darker hue.

For instance, there’s no way that a serial pedophile blackmailer like Epstein went unnoticed by the vaunted intelligence agencies that make up a key node in our deep state. Or the corporate media, where proposed stories about him were killed at the behest of nervous editors.

And, what exactly does that say about the morality of the elite that govern us?

Personally, I think these despicable actions by Epstein and his enablers are emblematic of the decline of the US empire and that our elite are so desperate that they will do anything to stay in power. These are not the actions of a confident group.

What’s been fascinating about the Epstein affair is that it contains three overlapping themes–intelligence, finance and sordid criminality–that would seem to provide prima facia evidence of an American deep state. This deep state or national security complex or whatever you want to call it that directs the US empire ultimately represents the true power center–Wall Street and the too-big-to-fail banks that we bailed out in 2008.

Going further, the US maintains its empire largely through financial means where Wall Street is a major player. As Mike Lofgren describes in Anatomy of the Deep State–“It is not too much to say that Wall Street may be the ultimate owner of the Deep State and its strategies, if for no other reason than that it has the money to reward government operatives with a second career that is lucrative beyond the dreams of avarice — certainly beyond the dreams of a salaried government employee.”

And these bankers are desperate because the financial system is now sitting atop a $800 trillion derivatives bubble. Indeed, when objectively assessing the psychological state of our feral elite at this particular moment in history, it’s hard to not conclude that certain forces operating on behalf of the financial industry would go to any length– not excluding nuclear war- in defense of their failing system.

The enormous risk that these financial elite are taking in their quest to maintain global hegemony is not much different from a preemptive nuclear attack, (think an economic first strike). By attacking the price of oil to damage foes like Russia, Iran and Venezuela the deep state risks the shale gas industry in the US, where the whole edifice is propped up by massive loans that have to be repaid to the US banks. These loans would go up in smoke and with them, potentially, all the derivatives. A useful comparison to fully realize what numbers we’re talking about: the US public debt amounts to 18 trillion dollars. The derivatives markets, only of the six largest banks in America, amounts to almost 16 times the US debt!

The use of economic sanctions against enemies of the empire: the deliberate targeting of revenues from crude oil, freezing financial assets, rising inflation due to central bank money printing, and so on are the weapon with which the national security state is convinced that it can continue its role as a hegemon in the world.

Recent events in the Middle-East, with Iran shooting down an American spy drone and now the attack on a Saudi oil processing complex only add layers of intrigue while exposing the schism between the neocons and the financial operators of the deep state.

Neocon, Mike Pompeo, speaking to reporters on Wednesday about an attack on a Saudi Aramco oil refinery last weekend, proclaimed that not only was the attack definitely perpetrated by Iran, but that it was an “act of war” and a threat to American lives. “This was an Iranian attack,” Pompeo claimed without evidence. “We were blessed there were no Americans killed in this attack, but anytime you have an act of war of this nature, there’s always a risk that could happen.”

However, it’s obvious that Trump is listening to other counsel because so far he’s not taken the bait and ordered an attack on Iran. This was similar to when he was pushed to the edge of war over the downing of the spy drone in June and blinked.

I believe that the president is clever enough to understand that an attack on Iran would not only tank the financial system but also end his reelection chances. Indeed, if Trump ever strikes Iran he will be blamed for the disaster by the neocons, who despise him. And Bolton’s dismissal could be one of those Trump signals to the deep state stating that he does not intend to sabotage his re-election hopes in 2020 by starting a new war.

But, Trump being Trump is hastening the end of the American empire through his foreign policy decisions, where there is no longer even a pretense that the US might adhere to international norms, let alone laws or treaties. It is almost like a black political comedy.

That Chinese curse about living in interesting times sure seems to be coming true.

 

 

 

 

 

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Hack the narrative

 

A new report challenges the conventional narrative of 9/11.

Although you probably didn’t see it or hear about it on corporate media, a research team at the University of Alaska’s Department of Civil and Environmental Engineering, led by Dr. Leroy Hulsey, Dr. Zhili Quan, and Professor Feng Xiao, Department of Civil Engineering, Nanjing University of Science and Technology, released yesterday for public comment their findings from a four-year study of the collapse of World Trade Center Building 7 on September 11, 2001.  This is the first scientific investigation of the collapse of the building.   

The study, currently available as a draft, concluded that “uncontrolled building fires” did not lead the building to fall into its footprint — tumbling more than 100 feet at the rate of gravity free-fall for 2.5 seconds of its seven-second collapse — as has officially been claimed. Instead, the study — authored by Dr. J. Leroy Hulsey, Dr. Feng Xiao and Dr. Zhili Quan — found that “fire did not cause the collapse of WTC 7 on 9/11, contrary to the conclusions of NIST [National Institute of Standards and Technology] and private engineering firms that studied the collapse,” while also concluding “that the collapse of WTC 7 was a global [i.e., comprehensive] failure involving the near-simultaneous failure of every column in the building.”

Amazing. 18 years after the fateful day and we still don’t know what happened. All we have to go on is the official narrative. You know–Sunni terrorists armed with boxcutters managed to highjack jetliners then fly them through the most heavily guarded airspace on the planet and into the World Trade Center and Pentagon. Within hours of the attack, Osama bin Laden and his al-Qaeda network were blamed for conceiving, planning, financing and coordinating the attacks.

Coincidentally, the attacks on 9/11 provided a casus belli for the Project for the New American Century (PNAC), a neoconservative think-tank directed by William Kristol and Robert Kagan. PNAC recommended taking advantage of the defeat of communism to reinforce American hegemony by preventing the emergence of any rival. In its September 2000 report entitled Rebuilding America’s Defenses, PNAC anticipated that US forces must become “able to rapidly deploy and win multiple simultaneous large-scale wars.” Unfortunately, according to the authors of the report, “the process of transformation […] is likely to be a long one, absent some catastrophic and catalyzing event—like a new Pearl Harbor.”

What an amazing coincidence. Since the attacks on 9/11, the neoconservatives have been able to wage multiple, simultaneous wars across the Middle-East, turning the region into a caldron of failed states. It’s almost like they were following the Yinon Plan, or something. Which brings us to the elephant in the room–Israel. The neocons are a small group of ideologues. Most are allied with Israel. Some are dual-citizens. Since the late 1970’s the neocons have  created an ideology of American world hegemony, specifying that the chief goal of US foreign policy is to prevent the rise of any other power that could check US unilateralism. A key strategic objective of this policy is to fracture and balkanize the Middle-East.

Mission Accomplished.

Of course to maintain this ongoing narrative of the endless war-on-terror mandated by the attacks of 9/11 requires the aid of the corporate media but with all the investigative reporters holding our elite accountable that would prove impossible, right?

Oh, wait.

The corporate media has already told so many whoppers that anyone who believes them at this point is an idiot.

Still, the propaganda and censorship have only increased since Trump’s surprise election, with the corporate media labeling anything that deviates from their official narrative as “fake news.”

However, as evidence continues to mount that the official narrative is irrational, it becomes ever more clear that the reason for this media campaign is to prevent legitimate questions about 9/11 from receiving the scrutiny they deserve, even smearing victims’ families and ailing first responders to do so. “Never Forget” has become nearly synonymous with “Never question the official narrative.”

Yet, this 9/11 anniversary — with a new study demolishing the official narrative on WTC 7, with a new poll showing that more than half of Americans doubt the government narrative on WTC 7, and with firefighters who responded to 9/11 calling for a new investigation — is it still “crazy” to be skeptical of the official story?

Remember that everything we think we know is simply narrative.

Hack the narrative.

Update: No matter how hard the deep state tries to resurrect Russia-gate with a bullshit story about a spy in Putin’s inner retinue, the reality is that no country meddles more in our affairs that our erstwhile ally–Israel. Going further, there is much evidence that Israel was deeply involved in 9/11. See herehere and here.

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IBDYBD

 

The looming threat of global weirding has made it apparent that both our political parties are death cults and, despite all the rhetoric to the contrary, money is their only true value.

I’d be remiss if I failed to mention ideology, where the Republicans have gone so far down the path of government is the problem and never the solution while the Democrats have embraced neoliberal privatization, but it’s still mostly money with GOP receiving the bulk of their campaign funding from fossil fuel interests and the DNC disallowing debate on the real national security issue so as to not upset their financial backers.

“The DNC Doesn’t Want a Climate Debate for a Reason” [Jacobin]. “While tech money is important, the biggest donors to the DNC in the 2020 cycle are overwhelmingly financial companies, whether hedge funds, private equity, or more traditional investment management. Obviously, most of these firms want to be able to continue to invest in fossil fuels as well as in companies looting the Amazon. Such companies are run by — and depend on the continued existence of — the very rich, our planet’s biggest liability. (Not only do they create immense pollution through private jets and multiple homes, the rich also support such lifestyles through immensely planet-ravaging investments.) The finance class does not want to hear plain talk about solutions to climate change; in many cases, they are getting rich from destroying the planet and do not wish to stop doing this. That’s probably why DNC head Tom Perez called the idea of a climate debate ‘dangerous.’ The DNC also seems to be trying to avoid two likely outcomes of a climate debate: Joe Biden looking bad and Bernie Sanders looking good.”

Last week Bernie Sanders released his version of the Green New Deal—a $16.3 trillion 10-year plan to get down to zero carbon in the power industry and in transportation. Immediately, the Democratic neoliberal establishment and corporate media decried it as “too expensive,” not “realistic” and not “prudent.” Just as they had with other proposals that would have averted the certain physical and fiscal disaster that climate change will cause.

In a sense, these groups are even more dangerous than the deniers in the Republican Party’s camp. As evidence that climate change is happening now piles up, the deniers are increasingly like Ike Turner who says, “Who you gonna believe? Your lying eyes or me?”

Unfortunately, it really is “all about the Benjamins”, with both parties trying to hold onto a system that is literally killing us, even as they and their billionaire backers prosper.

But why do we have to resort to such radical action? Why not a more “realistic” or “prudent” one?

The reason is because “realists” have been aiding and abetting climate deniers with appeals to slow walk the implementation of solutions for decades now. And every year the danger grows while the costs have skyrocketed. What’s become apparent is that most of these “realists”—including the DNC, House Speaker Nancy Pelosi, and the rest of the neoliberal Democrats—seem more concerned with campaign contributions than they are with the safety of the American people.

This brings us face to face with the real problem in our society–the moderates. Since the demise of Russia-gate the corporate media has been replete with scary stories of right-wing extremists threatening our precious democracy, but it’s the moderates of both parties that we should fear. Of course, this is nothing new. During the first Cold War, C. Wright Mills wrote of a “crackpot realism”, where bi-partisan US foreign policy mandarins evoked national security to continue policies that posed the real danger of ending life on earth.

Sound familiar?

Indeed, both parties are set up to divert anger while pursuing the very same policies that have gotten us to this point.

Meanwhile, neoliberal policymakers and other elites in the US have developed a language and ideology to justify doing everything and anything possible to avoid any responsibility for the coming collapse and the global chaos it will cause. Among the more jaded of the financial profession they have a saying that really encapsulates this morality. “I’ll be dead, you’ll be dead” (IBDYBD), so don’t worry.

 

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Shameless

 

I’ve said it before but it bears repeating: Mitt Romney, Mittens as I like to call him, represents everything that’s wrong with our modern day financialized economy.

However, Mittens, who recently spoke out against the “socialist agenda” of the Democratic presidential candidates while touting himself as a different kind of Republican, appears shameless about his contributions.

Mitten’s, as you might remember, made his fortune in the Private Equity (PE) business working for Bain Capital.

PE harkens back to the robber baron days, where financiers deploy unregulated dark-pools of money to make fortunes buying, restructuring and selling companies. They typically seek to recoup gains through dividend pay-outs or later sales of the companies to strategic acquirers or back to the public markets through initial public offerings.

What’s become apparent is that private equity is also a neoliberal-economic/political movement whose goal has been to financialize the American economy to the detriment of the vast majority of Americans who work for a living. In the process private equity has transformed corporations from institutions that utilize workers and capital for the purpose of production into extractive institutions designed solely to shift cash to owners and abandon the rest. Like much of our political economy, the ideas behind it were developed in the early 1970s, blueprinted presciently by the Powell Memo. The key takeaway from this transformation is that it encouraged the wholesale looting of our economy for the benefit of PE firms and ultimately Wall Street.

The takeover of Toys “R” Us offers a good example of how PE goes about looting a company that it has acquired. Bain Capital, KKR, and Vornado Realty Trust bought the public company in 2005, loading it up with debt. By 2007, though Toys “R” Us was still an immensely popular toy store, the company was spending 97% of its operating profit on debt service. Bain, KKR, and Vornado were technically the ‘owners’ of Toys “R” Us, but they were not liable for any of the debts of the company, or the pensions. Periodically, Toys “R” Us would pay fees to Bain and company, roughly $500 million in total. The toy store stopped innovating, stopped taking care of its stores, and cut costs as aggressively as possible so it could continue the payout. In 2017, the company finally went under, liquidating its stores and firing all of its workers without severance. A lot of people assume Amazon or Walmart killed Toys “R” Us, but it was selling massive numbers of toys until the very end. What destroyed the company was private equity, and public policies that allowed the divorcing of ownership from responsibility.

The ownership of corporations by private equity also creates perverse incentives across industries. For instance, if a certain kind of price gouging strategy works in a pharmaceutical company, a PE firm can replicate the strategy, buying up other companies and engaging in monopoly pricing. We can observe this phenomenon in the Military/Industrial/Complex, where Transdigm embodies this role, buying up aerospace spare parts makers with pricing power and jacking up prices, in effect spreading corrupt contracting arbitrage against the Pentagon much more rapidly than it would have spread otherwise.

Indeed, PE firms appear to be the living, breathing embodiment of Gresham’s law, where “bad money drives out good.”

Yet, this is the value we celebrate in America, where financial looters are feted on TV and elected to national positions of power. It’s hardly an accident that we find ourselves in a bad place.

Every economy is a planned one. Our choice going forward is between an extractive economy managed by private equity and Wall Street looters or a productive economy managed by we-the-people through our elected officials.

Update: Both parties are beholden to finance.

“The DNC Doesn’t Want a Climate Debate for a Reason” [Jacobin]. “While tech money is important, the biggest donors to the DNC in the 2020 cycle are overwhelmingly financial companies, whether hedge funds, private equity, or more traditional investment management. Obviously, most of these firms want to be able to continue to invest in fossil fuels as well as in companies looting the Amazon. Such companies are run by — and depend on the continued existence of — the very rich, our planet’s biggest liability. (Not only do they create immense pollution through private jets and multiple homes, the rich also support such lifestyles through immensely planet-ravaging investments.) The finance class does not want to hear plain talk about solutions to climate change; in many cases, they are getting rich from destroying the planet and do not wish to stop doing this. That’s probably why DNC head Tom Perez called the idea of a climate debate ‘dangerous.’ The DNC also seems to be trying to avoid two likely outcomes of a climate debate: Joe Biden looking bad and Bernie Sanders looking good.”

 

 

 

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