No 342 Posted by fw, November 18, 2011
In Part 9 of this 11-part series, Ferguson and Chomsky advanced the argument that, in America, “true” democracy poses a threat to the system of domination and control. America could learn something about “true” democracy from Haiti and Bolivia. In this post, Part 10, Ferguson provides examples of the banality of evil as exemplified by U.S. big business in buying elections at home and in making deals with Fascist tyrants abroad, namely Hitler and Franco. Referring to U.S. politics, Ferguson concludes that elections every four years are no substitute for a truly effective democracy.
Continuing with the format for this series, a complete 77-minute video of Shockley’s documentary film is embedded below followed by my time-indexed transcript comprising Part 4, including subheadings, and any external links and text highlighting. The time indexing facilitates switching from the text to its related place in the video. Of course, readers have the option of watching the complete 77-minute video at one sitting.
Golden Rule: The Investment Theory of Politics a documentary film by Jonathan Shockley
1:00:20 <On-screen text> “The impulse of democracy makes government less powerful and more active, to increase its functions and decrease its authority” —Samuel P. Huntington, Trilateral Commission report. [To put it more simply -- more democracy means less ability to govern, ergo, what we need is less democracy. See Oligarchy’s attack on Democracy, April 14, 2008].
1:00:34 <On-screen text> A few first world elections: 1992
“The investment bankers keep showing up . . . in the Democratic Party”
Tom Ferguson – When I’d walked through, in the case of the Clinton, the essay in 1992, I looked at industry significantly above the mean in support of Clinton — you know, oil and gas, capital intensive exporters, aircraft, computers, investment banking. The investment bankers keep showing up over and over in the Democratic Party going back to the New Deal.
1:00:58 <On-screen text> — 1996: Clinton losing ‘till the end
Bill Clinton – My fellow Americans after these four good, hard years I still believe in the place called Hope, a place called America.
Telecom industry “bought” the 1996 election for Clinton
1:01:17 Noam Chomsky – The 1996 election, Tom Ferguson pointed out that the election was to a large extent bought toward the end by the telecommunications industry, which poured a huge amount of money into it, enough to get Clinton elected, in fact.
1:01:32 <On-screen text> 2000 Election
In 2000, big business wanted Bush and they got him
Tom Ferguson – The ‘96 thing really does look rather like 2000. Something like three-quarters of the business community was strongly anti-Clinton. I don’t think that percentage changed that much. So you’re in a situation where I’m going to say, I’m going to stipulate, two-thirds to three-quarters of the business community wants Bush. The hullaballoo, if you elect Gore, would be quite a lot. Some of the labor guys thought maybe we should have some marches to sort of protest this [the Florida vote count debacle]. They clearly were advised don’t do this. If the situation had been reversed, and Gore had in fact won [the Supreme Court Florida vote decision] five to four, I think you would have seen almost chaotic scenes of the type where you had Republicans paying guys to go down into Florida and actually demonstrate. The consensus candidate, the business community, was winning. Throw the hand in and collect your tax cut due was, I think, the dominant sentiment. These guys weren’t trying that hard. You know, and Kerry clearly threw the hand in too fast on 2004. In the end, business folks won’t turn the place into a shambles. They’ll take a shot at it, try it, and if they lose, okay, we’ll take our tax cut and we’ll come back next year with more of the same.
1:02:40 — <Film clip from Trading Places with Eddie Murphy and Dan Aykroyd>
- Billy Ray (Murphy) – Oh, see, I made Louis (Aykroyd) a bet here. Louis bet me that we couldn’t both get rich and put you all in the poor house at the same time. He didn’t think we do it. I won.
- Louis – I lost. One dollar.
- Billy Ray – Thank you, Louis.
- Louis – After you.
- Billy Ray – Certainly. <Laughs. End of scene>
1:02:58 <On-screen text> Stock Prices & Political Power: A Close Correlation
Claim that politicians benefit from insider stock trading information
Tom Ferguson – Stock market prices actually reflect major investor knowledge of campaign contributions. We know that congressmen and senators earn the highest rates of return in recorded history on their portfolios, which means they’re being given insider information. And that doesn’t show on any campaign contribution. I had a colleague at the University of Texas, he did a paper called Death of a Congressman*. What he quickly discovers is that if they die unexpectedly, the stocks that the companies they’re close to crash that afternoon.
Political patronage in Malaysia
That theme was picked up by some folks on Indonesia and Malaysia where they looked at how the Asia crisis affected the stocks of – remember when Mahathir and his rival, Anwar, went down in Malaysia, at Mahathir’s hands, and it turned out the stocks of the companies that Anwar was close to crashed. They went down by something like – my memory is about 22-23 percent in the space of a week or two. But that was what political patronage was worth in Malaysia.
I looked at that paper and I said to my friend, <unintelligible>, you know, we could do — we could use this technique, which basically, what you do is you estimate what the stock market’s doing over about six months before. So you try to define a little event window, which is real tight, and the idea is track what stocks do on average and then see if the ones that are politically connected – or that you think might do better on average than that.
The infamous case of U.S. businesses funding the Hitler regime
And so we took that method over on probably the most famous argument about political money ever, which is the coming to power of Adolf Hitler. We worked this through – it took something like 3 or 4 years – and what we showed was like the last 25 years of American history and German history on this was all wrong. That, in fact, yeah, big business, in fact, did fund Hitler**, a big chunk of it, sort of somewhat loosely. The classical Nuremberg hypothesis*** was really right. They owned steel companies, I.G. Farben, Siemens things like that. Yeah, they were all into this. And there, stocks do move hugely, excessively, “excess returns” as they say.
- (*Note 1 – After extensive searching, I was unable to find any reference to this title by a professor at the University of Texas. However, I did find a reference to the title, Death of a Congressman: Estimating the Economic Value of Campaign Contributions by a professor at Stanford University, but this study appears unrelated to Ferguson’s point.)
- (**Note 2 – For more information, see Ferguson’s paper, Betting on Hitler: The Value of Political Connections in Nazi Germany. See also, Wall Street and the Rise of Hitler by Antony C. Sutton.)
- (***Note 3 – Nuremberg hypothesis is the process whereby ugly, degrading, murderous, and unspeakable acts become routine and are accepted as ‘the way things are done.’)
1:04:59 <On-screen series of questions with photos implying American business links with Hitler> — Where did they get the trucks? —GM; Where did they get the ideas? —Ford; Where did they get the names? —IBM; Who in America helped Hitler? —Rockefeller
1:05:24 <On-screen text> — Fascism can be useful — <On-screen text> — 1939: Democratically elected Spanish government overthrown. Fascist dictatorship installed. Strong labor movement wiped out.
Post-war Spain gives America military bases in exchange for military weapons
1:05:37 <Film of news footage> Announcer — Spain celebrates the 18th anniversary of the termination of the Spanish revolution and victory over communism. The nation’s military might, much of it of American manufacture acquired in return for bases is on display for the occasion. [La Señora] Franco and her daughter are among the distinguished guests, as is the generalissimo himself. One of the colorful contingents is made up from the Moorish guards. As a crack unit of paratroopers passes in review, the Caudillo [Franco] looks on in pride. Eighteen years of peace and rebuilding.
Orwell’s failed literary attempt to rally the workers of the world
1:06:18 <Photo of George Orwell with title Spanish Civil War: Homage to Catalonia> Reader – “In the barber shops were anarchists. The barbers were mostly anarchists, solemnly explaining that barbers were no longer slaves. In the streets were colored posters appealing to prostitutes to stop being prostitutes. The anarchists were still in virtual control of Catalonia and the revolution was still in full swing. It was the first time that I had ever been in a town where the working class was in the saddle. Every shop and café had an inscription saying that it had been collectivized. Even the bootblacks had been collectivized. Waiters and shop workers looked you in the face and treated you as an equal. Servile and even ceremonial forms of speech had temporarily disappeared. Nobody said “Señor” or “Don” or even “usted”. Everyone called everyone else “comrade” and “thou” and said “salud” instead of “buenos dias”. You saw very few destitute people and no beggars except the gypsies. Above all, there was a belief in the revolution and the future, a feeling of having suddenly emerged into an era of equality and freedom. Human beings were trying to behave as human beings and not as cogs in the capitalist machine.”
1:07:54 <On-screen text> — Weak labor means “swivel chair” democracy
Tom Ferguson – You basically have two situations – One in which the population is quite well organized and mobilized, and then you’re likely to see the whole of the business community retreat to one party. But otherwise, not. And you know, just an awful lot of European history deals with situations in which you have fairly mobilized workers and often farmers, and so the business community may or may not be formally organized in one party but they’re pretty tight, cohesive and operate together.
Thatcherism’s death blow to the National Union of Mineworkers
1:08:28 Margaret Thatcher – The greatest divisions this nation has ever seen, were the conflicts of trade unions towards the end of a labor government. Terrible! They were acting as they were later in the coal strike before my whole trade union laws were through this government. They were out to use their power to hold the nation to ransom, to stop power from getting to the whole of manufacturing industry. You want division. You want conflict. You want hatred. There it was. It was that, which Thatcherism, if you call it that, tried to stop.
1:09:06 — <Clip from an unidentified movie>
- Man — Why?
- Sean Connery Character – You know why as much as me. You worked down there. Could you see yourself not lifting a finger?
- Man – I wouldn’t stay down there. I’d get out.
- Connery – And where would you find it different? There’s them on top and them below. Push up or push down. Who’s got more push? That’s all that counts.
- Man – They always had more.
- Connery – Well, we did a bit. Not enough but a bit. Enough to push the bastards a little.
Elections every four years is no substitute for a truly effective democracy
1:09:34 Tom Ferguson – As long as you have elections there’s a kind of negative check built in. You could just keep – I mean it’s not much of a constraint, but it is a constraint. The constraint is basically this – You could just vote them out. I don’t think that’s at all equivalent to effective democracy. All you do is – you can put a swivel chair in the Oval Office but you can’t make the guy or the lady who’s sitting in that chair do any policy for you.