If you are rich and powerful, person or company, wouldn’t you at least allocate some of your wealth to make sure that neither your wealth nor your power were taken from you? Maybe even enhanced a little bit? If you are poor and powerless – or even if you are middle class and hanging on to what you have – wouldn’t you part with some of your wealth to make sure you got a bit more of the pie? Oh, you don’t have that wealth to get folks elected; you have to wait until people are so pissed off at the political system that money from special interests just plain doesn’t matter anymore.
In short, the system favors the special interests with the money to influence the system until things get so completely out of hand that someone has to come in and vacuum the whole mess. Kind of destroys that notion that free markets and laissez faire will always operate in the best interests of the country. Yet purists demand that the government let go… unless the government is granting business tax credits or oil depletion allowances… that we are becoming “socialist,” although I cannot think of something more socialist than “public schools.”
Just as millions of Americans are watching their life savings and pension benefits destroyed by reason of the economic malaise caused by a business-supported frenzy of over-borrowing, we learn that the fat cats at the top of the big companies are pulling down huge increases in their pensions. The November 3rd TheDeal.com: “Here are some startling statistics: The Wall Street Journal has found that pensions for top executives rose an average of 19% last year as companies' share prices tumbled on average 37%, according to an analysis of SEC filings. ..Consider, too, that the average corporate pension fund lost 24% or so of its total value last year, compelling some companies to freeze their pension funds and to stop matching employee contributions, and the news is that much more gut-wrenching.” We already know about the huge bonuses these folks have already taken, but this excess seems interminable.
The special interests seem almost impossible to contain, and the sheer size of the aggregation of corporate power appears to make the biggest of the big immune from any semblance of rational governance, from shareholders to government regulators. Bernie Madoff scoffs at the efforts of the SEC to regulate rogue traders (such as himself). The BBBs (bailed out big banks) must have been literally laughing all the way to themselves as the government gave them billions to restart the credit markets, but they took that money and used that capital to milk the system while leaving the small business and commercial credit market in worse shape than when they got the TARP payments in the first place!
The Brits are beginning to figure out that just allowing these financial institutions to become and remain as large as they have become is an evil within itself. The November 3rd Washington Post: “The British government announced Tuesday that it will break up parts of major financial institutions bailed out by taxpayers, highlighting a growing divide across the Atlantic over how to deal with the massive banks that were partially nationalized during the height of the financial crisis… The British government -- spurred on by European regulators -- is forcing the Royal Bank of Scotland, Lloyds Banking Group and Northern Rock to sell off parts of their operations. The Europeans are calling for more and smaller banks to increase competition and eliminate the threat posed by banks so large that they must be rescued by taxpayers, no matter how they conducted their business, in order to avoid damaging the global financial system.”
When you look at how many former “big bankers” are highly-placed officials in any U.S. administration, Republican or Democrat, it is little wonder that these big financial institutions have the clout to fight any such efforts in the United States. Let’s face it, the system of allowing big financial institutions to grow to whatever size they can achieve, by merger or acquisition, is an obvious complete and utter failure by any objective measure (look at how these institutions have fared in this meltdown when compared with small businesses and individual consumers!). “‘We still need to see exactly which parts the [British] banks will need to sell off to judge whether the goal of having smaller banks is really achieved,’ said Richard Portes, an economics professor at the London Business School. ‘But there are lessons here for the United States. The supposed economies of scale of massive financial institutions are outweighed by the difficulties in controlling risk inside them.’” The Post. Duh!
Compare the economic gains of these special interests to this report from the November issue of Archives of Pediatrics and Adolescent Medicine (as reported November 3rd on AOL news): “Nearly half of all U.S. children and 90 percent of black youngsters will be on food stamps at some point during childhood, and fallout from the current recession could push those numbers even higher, researchers say...The estimate comes from an analysis of 30 years of national data, and it bolsters other recent evidence on the pervasiveness of youngsters at economic risk… According to a [United States Department of Agriculture] report released last month, 28.4 million Americans received food stamps in an average month in 2008, and about half were younger than age 18. The average monthly benefit per household totaled $222.” Even if you think the numbers are a 100% exaggeration, the statistics are still staggering.
When crass pragmatists insist that it is political folly to think that the government can remotely impact the same kind of break-up in the U.S., because these special interests are way too powerful to contain, I would like to point out the most fundamental lesson of history: when special interests so overwhelm the best interests of the vast majority of the citizens of any nation, the political system that gave rise to the inequality will eventually fail – either through insurrection (France in 1789), conquest (the southern Soong Dynasty in 1279), separation of component states into new political units (Soviet Union in 1991) or simple collapse (Anasazi Indians of Arizona/New Mexico sometime around 1300, accelerated by climate change). It is, if I recall, how the United States came to exist in the first place in 1776.
Taking our freedoms for granted and ignoring the obvious failings of the system are nothing more than condoning the beginning of the end. And in that end, the special interests stand to lose more than anything they could possibly have gained in the interim… but who thinks that far ahead? We really must!
I’m Peter Dekom, and I reluctantly approve this message.
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