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The Mafia State
http://www.truthdig.com/report/item/the_mafia_state_20161204/
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Posted on Dec 4, 2016
By Chris Hedges
Mr. Fish
Systems of governance that are seized by a tiny cabal become mafia states.
The early years-Ronald Reagan and Bill Clinton in the United States-are
marked by promises that the pillage will benefit everyone. The later
years-George W. Bush and Barack Obama-are marked by declarations that things
are getting better even though they are getting worse. The final
years-Donald Trump-see the lunatic trolls, hedge fund parasites, con
artists, conspiracy theorists and criminals drop all pretense and carry out
an orgy of looting and corruption.
The rich never have enough. The more they get, the more they want. It is a
disease. CEOs demand and receive pay that is 200 times what their workers
earn. And even when corporate executives commit massive fraud, such as the
billing of hundreds of thousands of Wells Fargo customers for accounts they
never opened, they elude punishment and personally profit. Disgraced CEO
John Stumpf left Wells Fargo with a pay package that averages nearly $15
million a year. Richard Fuld received nearly half a billion dollars from
1993 to 2007, a time in which he was bankrupting Lehman Brothers.
The list of financial titans, including Trump, who have profited from a
rigged financial system and fraud is endless. Many in the 1 percent make
money by using lobbyists and bought politicians to write self-serving laws
and rules and by forming unassailable monopolies. They push up prices on
products or services these monopolies provide. Or they lend money to the 99
percent and charge exorbitant interest. Or they use their control of
government and the courts to ship jobs to Mexico or China, where wages can
be as low as 22 cents an hour, and leave American workers destitute.
Neoliberalism (http://www.corpwatch.org/article.php?id=376 ;) is
state-sponsored extortion. It is a vast, nationally orchestrated Ponzi
scheme.
This fevered speculation and mounting inequality, made possible by the two
ruling political parties, corroded and destroyed the mechanisms and
institutions that permitted democratic participation and provided some
protection for workers. Politicians, from Reagan on, were handsomely
rewarded by their funders for delivering their credulous supporters to the
corporate guillotine. The corporate coup created a mafia capitalism. This
mafia capitalism, as economists such as Karl Polanyi
(http://www.anb.org/articles/14/14-01154.html) and Joseph Stiglitz
(https://www8.gsb.columbia.edu/faculty/jstiglitz/ ;) warned, gave birth to a
mafia political system. Financial and political power in the hands of
institutions such as Goldman Sachs and the Clinton Foundation becomes solely
about personal gain. The Obamas in a few weeks will begin to give us a
transparent lesson into how service to the corporate state translates into
personal enrichment.
Adam Smith (http://www.biography.com/people/adam-smith-9486480 ;) wrote
that profits are often highest in nations on the verge of economic collapse.
These profits are obtained, he wrote, by massively indebting the economy. A
rentier (https://www.google.com/?gws_rd=ssl#q=rentier) class, composed of
managers at hedge funds, banks, financial firms and other companies, makes
money not by manufacturing products but from the control of economic rents.
To increase profits, lenders, credit card companies and others charge higher
and higher interest rates. Or they use their monopolies to gouge the public.
The pharmaceutical company Mylan
(http://www.forbes.com/sites/emilywillingham/2016/08/21/why-did-mylan-hike-e
pipen-prices-400-because-they-could/#68dff6f3477a) , in a classic example,
raised the price of an epinephrine auto-injector used to treat allergy
reactions from $57 in 2007 to about $500.
These profits are counted as economic growth. But this is a fiction, a
sleight of hand, like unemployment statistics or the consumer price index,
used to mask the speculative shell game.
"The head of Goldman Sachs came out and said that Goldman Sachs workers are
the most productive in the world," the economist Michael Hudson
(http://michael-hudson.com/about/) told me. "That's why they're paid what
they are. The concept of productivity in America is income divided by labor.
So if you're Goldman Sachs and you pay yourself $20 million a year in salary
and bonuses, you're considered to have added $20 million to GDP, and that's
enormously productive.
"We're talking with tautology," said Hudson, the author of "Killing the
Host: How Financial Parasites and Debt Bondage Destroy the Global Economy."
"We're talking with circular reasoning here. So the issue is whether Goldman
Sachs, Wall Street and predatory pharmaceutical firms actually add product
or whether they're just exploiting other people. That's why I used the word
'parasites' in my book's title. People think of a parasite as simply taking
money, taking blood out of a host or taking money out of the economy. But in
nature it's much more complicated. The parasite can't simply come in and
take something. First of all, it needs to numb the host. It has an enzyme so
that the host doesn't realize the parasite's there. And then the parasites
have another enzyme that takes over the host's brain. It makes the host
imagine that the parasite is part of its own body, actually part of itself
and hence to be protected. That's basically what Wall Street has done. It
depicts itself as part of the economy. Not as a wrapping around it, not as
external to it, but actually the part that's helping the body grow, and that
actually is responsible for most of the growth. But in fact it's the
parasite that is taking over the growth.
"The result is an inversion of classical economics," Hudson said. "It turns
Adam Smith upside down. It says what the classical economists said was
unproductive parasitism actually is the real economy. And that the parasites
are labor and industry that get in the way of what the parasite wants, which
is to reproduce itself, not help the host, that is, labor and capital."
The established elites dislike Trump because he is gauche, vulgar and
boorish. He is not part of the refined group of mandarins trained to become
plutocrats in Ivy League universities and business schools. He never
mastered the cloying patina of refinement and carefully calibrated rhetoric
of our courtier class.
Trump and his coterie of half-wits, criminals, racists and deviants play the
role of the Snopes clan in William Faulkner's novels "The Hamlet," "The
Town" and "The Mansion." The Snopeses rose up out of the power vacuum of the
decayed South and ruthlessly seized control from the degenerated
aristocratic elites. Flem Snopes and his extended family-which includes a
killer, a pedophile, a bigamist, an arsonist, a mentally disabled man who
copulates with a cow, and a relative who sells tickets to witness the
bestiality-are fictional representations of the scum we have elevated to the
highest level of the federal government. They embody the ethos of modern
capitalism Faulkner warned us against.
"The usual reference to 'amorality,' while accurate, is not sufficiently
distinctive and by itself does not allow us to place them, as they should be
placed, in a historical moment," the critic Irving Howe wrote of the
Snopeses. "Perhaps the most important thing to be said is that they are what
comes afterwards: the creatures that emerge from the devastation, with the
slime still upon their lips.
"Let a world collapse, in the South or Russia, and there appear figures of
coarse ambition driving their way up from beneath the social bottom, men to
whom moral claims are not so much absurd as incomprehensible, sons of
bushwhackers or muzhiks (https://www.google.com/?gws_rd=ssl#q=muzhiks)
drifting in from nowhere and taking over through the sheer outrageousness of
their monolithic force," Howe wrote. "They become presidents of local banks
and chairmen of party regional committees, and later, a trifle slicked up,
they muscle their way into Congress or the Politburo. Scavengers without
inhibition, they need not believe in the crumbling official code of their
society; they need only learn to mimic its sounds."
The Snopes-like mentality of our president-elect is portrayed in a
documentary movie, "The Queen of Versailles," about another sleazy
developer. The film, by Lauren Greenfield, chronicles the tawdry and
insatiable greed of David Siegel and his ditzy trophy wife, Jackie
(http://www.realtor.com/news/trends/queen-of-versailles-q-and-a/ ;) , who is
three decades younger, and their quest to build one of the largest private
residences in the United States, a 90,000-square-foot mansion modeled after
Versailles. Siegel and his wife, who once dated Trump, are fervent Trump
supporters. Siegel, like Trump, is a barely literate philistine. He, like
the president-elect, sponsored beauty pageants, was accused of sexual
assault, made his money through high-pressure sales tactics and had access
to hundreds of millions in bank loans. And he, like Trump, uses bankruptcy
or the threat of bankruptcy to protect his wealth. And like our next
president he has a volatile and vicious temper.
"The great Roman historians Livy and Plutarch blamed the decline of the
Roman Empire on the creditor class being predatory, and the latifundia
(https://www.google.com/?gws_rd=ssl#q=latifundia ;) ," Hudson said. "The
creditors took all the money, and would just buy more and more land,
displacing the other people. The result in Rome was a dark age, and that can
last a very long time. The dark age is what happens when the rentiers take
over.
"If you look back in the 1930s, Leon Trotsky
(http://www.biography.com/people/leon-trotsky-9510793) said that fascism
was the inability of the socialist parties to come forth with an
alternative," Hudson said. "If the socialist parties and media don't come
forth with an alternative to this neofeudalism, you're going to have a
rollback to feudalism. But instead of the military taking over the land, as
occurred with the Norman Conquest, you take over the land financially.
Finance has become the new mode of warfare.
"You can achieve the takeover of land and the takeover of companies by
corporate raids," he said. "The Wall Street vocabulary is one of conquest
and wiping out. You're having a replay in the financial sphere of what
feudalism was in the military sphere."
What comes next, history has shown, will not be pleasant. A cruel and
morally bankrupt elite, backed by the organs of state security and law
enforcement, will, as the Eupatridae
(https://en.wikipedia.org/wiki/Eupatridae ;) did in sixth-century-B.C.
Athens, bankrupt the citizenry through state-sponsored theft, war, austerity
and debt peonage. They will reduce workers to the status of serfs or slaves.
The most benign dissent will be criminalized and crushed. America's
Snopes-like elites have no external or internal constraints. They are
barbarians. We will remove them from power or enter a new dark age.
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