What’s fucked is that after the Wall Street crash of 2008, (an event that should have discredited our all-American brand of financial capitalism for a generation), the bi-partisan Washington Consensus sabotaged any effort to re-leash our financial oligarchy.
The obscene inequality that plagues our country is a political problem as well as an economic one. Having a class of billionaire plutocrats comes with a heavy cost because policies that benefit us are antithetical to them. Since Aristotle the great thinkers have been concerned with how concentrated wealth deforms politics. Supreme Court Justice Louis Brandeis warned: “We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can’t have both.”
Our class of oligarchs has spent decades burnishing their reputation through massive propaganda and public relations efforts, portraying themselves as “job creators” and “masters of the universe.” Unfortunately, after the 2008 crash all their effort was in tatters.
If only there had been an intrepid, newly elected president who could utilize an investigative committee, (like maybe a Pecora Commission? ), to uncover the causes of the financial collapse, expose the criminal actions of leading financiers and galvanize broad public revulsion at Wall Street.
Alas, newly elected President Barack Obama proved to be no FDR, who famously welcomed the hatred of the oligarchs. The Crash of 1929 discredited Wall Street, and capitalism more generally and FDR was able to take advantage, while Obama, because of his closeness to the financial oligarchs, did not.
The New Deal, FDR’s response to the Great Depression, ushered in 50 years of prosperity for the lower and middle-classes. Moreover, the New Deal strengthened socialistic characteristics of the capitalist economy, and of course, Wall Street despises this because they think any strengthening of those characteristics points to the advantages of it, which means people may say, well, we don’t just want public health care, we maybe we should have public banking too.
As I’ve stated before, the ultimate political question is who gets to plan the economy. There is no such thing as “free market.” It’s a propaganda construct. Every economy is planned, the crucial part is who gets to do the planning, the government that represents we the people, or Wall Street?
Personally I believe that there needs to be a balance. Markets work great for some things but other aspects of the economy, like utilities and infrastructure requires public ownership.
But these are political questions that need to be decided through our representative democratic process. And with a dominant oligarchy, this has proved impossible, as we have witnessed.
This quote by Thomas Jefferson well describes the essential conflict. “If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered…“
I’ve come to believe that we weren’t able to bring the oligarchs to heel after the 2008 Wall Street Crash because they’ve spent every waking minute since the New Deal lobbying, rigging elections, making campaign contributions, compromising research and public discourse, while laundering their reputation with philanthropy and public relations. They’ve also proved more than adapt at manufacturing discontent. Stoked for decades by an extremist capitalist oligarchy which has slowly and methodically disabled the levers of democracy to achieve its interests by pitting American against American to divide and rule.
Historically, the Wall Street Crash of 1929 and onset of the Great Depression provided space for progressive, democratic reforms. It was a close thing, however. Instead of the New Deal, many American industrialists wanted to install a system of fascism, similar to the ones in Italy and Germany, as the response to the economic collapse. After FDR was inaugurated they even went so far as to organize a coup against him. Luckily, because of FDR’s fortitude and superlative political skills, the “malefactors of great wealth” were defeated and the New Deal reforms ensured a 50 year period of prosperity.
Unfortunately for us, the missed opportunity in 2008 has ensured a rolling series of catastrophes, culminating in our botched response to Covid-19. Think how much better we could have handled the health crisis if we had used the 2008 crash to create space for progressive reforms, such as a single-payer health care system rather than the corporate boondoggle that is Obama-Care?
If you’ll remember from the way back machine, privately, Obama told Wall Street executives that he would protect them instead of demonizing or prosecuting them. On 27 March 2009, Obama assembled the top executives of the bailed-out financial firms in a secret meeting at the White House and he assured them that he would cover their backs; he promised “My administration is the only thing between you and the pitchforks”. Meanwhile, the outrage Americans felt towards Wall Street was channeled by the Tea Party, stymieing any chance of progressive reforms.
I started blogging in the aftermath of this debacle, outraged at the duplicity of our bi-partisan elite and determined to probe the dark underbelly of the American political/economy. The knowledge I’ve gained is why I was hardly surprised at Trump’s election.
Like so much else, it all comes back to this missed opportunity.
Update: It is a misnomer to call our speculative financial system “capitalism.” It should be seen as a cancer. It exists inside of our economic system, but it destroys capital, just as cancer feeds off of the body but ultimately destroys the body.
This is the extractive system that dominates our political/economy. It takes money and resources from the productive economy and destroys it by investing in paper (nothing). This is how it thrives. All governments, laws, academia, social mores, mass media, culture and, of course, economics and finance are shaped by this system. It cannot change.
Unless we force it to.