The US corporate media demonizes foreign oligarchs without looking closer to home.
In a nutshell the US has devolved from a republic to an oligarchy. The US oligarchy is made up of people with the same accent, manners, values, and educational backgrounds from Boston to Austin and San Francisco to New York and Atlanta. America has always had regional elites. What is unique about the present is the consolidation of a single, national ruling class that crucially believes that only they can be allowed to lead the country. Even worse, the ruling class refuses to submit to the authority of anyone outside the group, whom they disqualify from eligibility by casting them as in some way illegitimate. In effect, any challenge to the authority of the ruling oligarchy is depicted as an existential threat to civilization.
Can you see how Trump posed a grave danger to this arrangement, and why they are still determined to get him by hook or by crook?
Our oligarchs are largely financial in nature, maintaining their power through debt. The US economy has devolved into a system in which financial claims on current and future production in the form of debt rise exponentially, outpacing any conceivable increases in physical production. Heterodox economist Michael Hudson lays the blame of oligarchy and the concomitant deindustrialization on the financial parasites who control the government. “The banks are responsible for de-industrializing the country by squeezing labor’s living standards while raising the price of everything that labor needs to buy. That’s why American companies have all moved abroad. They can’t afford to pay American labor when American labor’s living costs have to be paid to the financial sector and the real estate sector — which is part of the financial sector — that you’ve just been describing. That’s the real problem.”
I believe that Americans becoming wealthy through productive activities is good for the economy and society but when they become fabulously rich and powerful through extractive means it spells doom for our republic. To wit, the financial billionaires in the US are powerful enough to radically skew our political process. Private creditors translate their economic gains into political power, polarizing the distribution of wealth and income by deregulating and untaxing financial gains. The result is two Americas–the entitled Oligarchy and the Other America.
A couple of recent developments exemplify this dynamic:
First, Norfolk Southern, a billion dollar rail corporation, was allowed to burn the hazardous chemical contents of the railcars that derailed in East Palestine Ohio.“We basically nuked a town with chemicals so we could get a railroad open,” said hazardous materials expert and retired Youngstown, Ohio Fire Chief Sil Caggiano. With deregulation of the rail industry in the 1980s, which included Wall Street mergers and “short term profit imperatives,” trains have been getting longer and longer while the number of train workers gets smaller and smaller. Cost cutting by Norfolk Southern and other carriers has, according to Railroad Workers United, “eliminated many of the critical mechanical positions and locations necessary to guarantee protection against these kinds of failures.” Railroad corporations, meanwhile, continue to rake in piles of cash: In 2022, Norfolk Southern reported a record $4.8 billion in income. Compare that to the $3.4 million the company has offered to residents of East Palestine.
Then there is the way in which the government responded in the wake of the Silicon Valley Bank meltdown. After wealthy venture capitalists and their media buddies panicked, sparking a digital bank run, the US Treasury and Federal Reserve stepped in and bailed out these modern day robber barons. Indeed, anytime the banking sector experiences a major financial crisis, they’re among the first to receive taxpayer-funded bailouts at Middle America’s expense.
Crucially, there’s an unspoken impetus in bailing out SVB–war. Oligarchs and their venture capitalist hirelings invest in war. Today private equity has taken on an even wider role in the armaments industry than in the 1990s, responsible for thousands of investments in aerospace and defense firms. The Pentagon has even established an office dedicated to facilitating the linkages between start-ups with military potential and venture capitalists. Industry leaders thus unsurprisingly see private equity and venture capital as the future of military innovation. While SVB’s heavy concentration of VC-backed tech firms makes it a particularly clear example of these industries’ ties with the US military-industrial complex, it is not unique. Indeed, the US financial system writ large is intertwined with US war-making in the twenty-first century–creating a dangerous situation for the world.
Decades of endless war have dramatically increased the opportunities for militarized profit-making–making military industries an ideal investment for financial capital, and a growing number of financial firms are expanding their military sector investments. This draws the interests of financial capitalists together with those of military-industrial firms and hawkish officials.
As the cool kids say–ka-ching!
The problem with war as an enrichment process for our oligarchic welfare system is that the US is choosing to fight peer competitors like Russia and China, countries that have industrial means of warfare. Here’s the New York Times bemoaning the fact. “The US isn’t ready-if a war with China were to break out. Perhaps most worrisome: The US cannot manufacture enough precision missiles, a key weapon in any fight.”
The reason, that I’ve talked about in earlier posts, is that the US makes weapons for profit rather than for defense.
Endless war and austerity for ordinary citizens coupled with bank rescues for the affluent is a toxic mix. As oligarchs grow richer the general public becomes poorer. Poverty breeds crime and dangerous protest movements. Going further, a society ruled by wealthy criminals needs lots of cops, paramilitary organizations and death squads.
Our oligarch problem will continue until we the people take matters into our own hands, like the French are doing. France should be a model for more countries. When your oligarchs commit crimes with impunity, take to the streets.