Tuesday, February 17, 2009

Oligarchy USA

Bill Moyers, after catching Simon Johnson’s post on The Baseline Scenario entitled High Noon: Geithner v. The American Oligarchs, invited him for an interview on his PBS television program, Bill Moyers Journal.

Moyers asks Johnson what he is signaling with the use of the term oligarchy. Johnson says America is in the grip of an oligarchy. Oligarchy, simply defined, is a form of government where political power rests with a small elite segment of society who control the state through economic means. Johnson points out that those who currently hold the high government positions and are crafting government policy that is supposed to right this ship are the very people that got us into this mess in the first place when they worked in the financial industry. Essentially, the powers-that-be in government are looking out for their own kind in the private sector. And they think they’ve won.

The video cuts to a clip of James Gorman, Co-President at Morgan Stanley. He is speaking to a group of Morgan Stanley executives and tells them bonuses will be coming, but don’t call them bonuses. Here’s a bit of the exchange that follows between Moyers and Johnson:
SIMON JOHNSON: What he’s basically saying is business as usual. Go about your daily lives. Get the bonuses. Re-brand them as awards. But it really shows you the arrogance, and I think these people think that they’ve won. They think it’s over. They think it’s won. They think that we’re going to pay out ten or 20 percent of GDP to basically make them whole. It’s astonishing.

BILL MOYERS:Why wouldn’t they believe that? I mean, when I watched the eight CEOs testify before Congress at the House Financial Services Committee earlier this week, I had just finished reading a report that almost every member of that Committee had received contributions from those banks last year. I mean in a way that’s like paying the cop on the beat not to arrest you, right?

SIMON JOHNSON: I called up one of my friends on Capitol Hill after that testimony, and that session. I said, “What happened? This was your moment. Why did they pull their punches like that?” And my friend said, “They, the Committee members, know the bankers too well.”

BILL MOYERS: Last year, the securities and investment industry made $146 million in campaign contributions. Commercial banks, another $34 million. I mean, American taxpayers don’t have a flea’s chance on a dog like that, do they?

SIMON JOHNSON: It’s a massive problem, obviously. And I do think, though, the good news there are people in the White House - I think the president himself, is aware of this broader issue. And, obviously, the campaign, the Obama campaign was very good at getting small contributions, and trying to minimize the impact of major donors like that. But, at the same time, these people are throughout the system of government. They are very much at the forefront of the Treasury. The Treasury is apparently calling the shots on their economic policies. This is a decisive moment. Either you break the power or we’re stuck for a long time with this arrangement.
After this, Moyers, shaking his head, simply asks, “Are we chumps?” Johnson says:
We’ll find out. Yes, we may be. Okay. It depends on how we play this politically. It depends on what our political system does. It depends, I think, on the level of reaction. The financial system is playing us for chumps, okay? The bankers think we’re chumps. We’ll find out. We have leadership that can handle this. We’ll find out what they do.
Leadership that can handle this? We have leaders who have received millions in campaign contributions from the banking industry. Did you catch what Johnson implies by his answer here? In response to the question of whether the American people are chumps, Johnson essentially says it depends on whether or not the American people will stand for this kind of hubris.

Well, will we? Consider what is happening in the attempt to make these companies whole:

HT: The Humane Economy.

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