No 367 Posted by fw, December 15, 2011
“Economic power need not translate automatically into political power. But if you don’t control it, it will. At the moment, the financial sector exerts great control over those institutions which are intended to regulate it.” —John Weeks
In a Real News video interview, Professor Emeritus John Weeks of the University of London, explains how the economic power of Wall Street, if not restrained will lead to political dictatorship. My abridged transcript, including subheadings, follows the video.
ABRIDGED TRANSCRIPT (with added subheadings)
Economic power need not translate automatically into political power. But if you don’t control it, it will. At the moment, the financial sector exerts great control over those institutions which are intended to regulate it, and this is the Securities Exchange Commission, for example; in an indirect way, the Federal Reserve System, which plays a very important role in regulation, and many others that are less well known. So that’s the first step. You take over those institutions that seek to regulate you.
The second step, not necessarily in this order, but it has been more or less in this order, you begin to control politicians who have the key positions in deciding the laws that are going to regulate your industry. So if you look at the economic advisers to the President of the United States, they are people directly or indirectly linked to Wall Street. Larry Summers was left advising the president to go back to financial dealings, because I guess he can’t go back to Harvard. And you can name many others. They come from a stable of young economists run by the former Secretary of the Treasury, [Robert] Rubin.
You control the legislators, you control the advisors. Then the question of redistribution becomes much easier for you. You get the taxes down. Taxes in the United States are quite low. How is the financial sector going to further redistribute to itself when wages are flat, the public sector is quite small, taxes are quite small. I think it’s fairly clear that one strategy is to eliminate those vestiges of social welfare, what optimistically one might call elements of the welfare state. Eliminate those as much as possible. Shorten the amount of time you control unemployment compensation. Privatize or reorganize social security payments. Reduce the size of state and local governments. These many important steps being taken at the state level to restrict the right to vote.
I grew up in Texas. When I grew up in Texas there was something called the poll tax. It wasn’t very much but you had to pay it before you could vote for your government. We’re getting back to something like the poll tax. You have to prove that you are an American citizen in order to vote. And then when there are drives to try to get more people to vote – as in anticipation of the election of 2008 – those organizations that do it – the famous ACORN is attacked for fraud and putting ghost voters on the rolls – these are attacks against basic democratic principles. There are other examples at the state level. Probably some of the viewers may know about. I know – though I don’t live in Texas, I return to Texas frequently – Governor Perry introduced a number of measures which restrict local governments to zone – a tremendously important power for a local authority because it determines whether or not people can be dispossessed of their land and many, many other things. What all of these things have in common is the restriction of the democratic process.
I want to add one thing I was saying at the beginning of the first part of the interview. Why is it that people are – so many Americans have faith in markets when it is contrary to their experience? I think part of it is the fostering, the selling of — the systematic selling of certain big lies. And among these are a citizen is smart enough to be able to choose in the market. A lot of places that you can buy your healthcare, you’re clever enough to figure out how long you’re going to live and what diseases you’re likely to get so you can choose this healthcare program over that healthcare program, but you aren’t smart enough to understand how the economy works. That has to be left to the experts. You aren’t smart enough to figure out monetary policy. That should be left to the Federal Reserve System. And if, in fact, anybody in Congress starts complaining about what the Federal Reserve System is doing then they’re just trying to politicize economic policy and that would be a terrible thing because then the experts won’t be able to do what is appropriate for the economy. An amazing number of people believe that; believe that the management of the economy is much too complicated for the person in the street. And so I think there’s systematic selling of the idea that the big things in life are beyond your capacity to understand is the underlying rationale for an authoritarian system.
I think Wall Street plays on that. It plays on that and is a depoliticizing process. So people come to the – or what is desired by the masters in Wall Street – is that people will say well politics is a dirty business. I don’t want to have anything to do with it. The economy’s too complicated; we’ll let the experts run that. Don’t tax me. Leave me alone and let me try to struggle on. In short the end of community. I would say the end of citizenship. We aren’t in this together. Each person for himself.
I think fostering that idea — [that] there’s no collective route to improvement — is an essential part of the authoritarian program.