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Paul B. Farrell
March 23, 2010, 5:11 a.m. EDT · Recommend (12) · Post:
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By Paul B. Farrell, MarketWatch
ARROYO GRANDE, Calif. (MarketWatch) -- Anarchy? Yes, America is descending into anarchy. No leadership in anarchy, just endless battles, warring fiefdoms competing for power -- shifting power.
That's our new America. Democracy's dead. Texans rebranded us a "constitutional republic" for their textbooks. But either way, voting's irrelevant.
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So what are we? What label fits? Some historians call America an oligarchy or plutocracy, a nation ruled by a small elite whose power comes from wealth, family or the military. Some call us a cryptocracy, where politicians merely front for a shadow government. The recent Supreme Court decision giving corporations the same rights as real humans certainly reinforces that idea of shadow government.
But there is no one single elite running America in secret. Rather, America is run by many fragmented elites, many divergent special interests with huge cash war chests. These special interests daily battle each other like vultures over a carcass stuffed with two tasty jewels: A bigger piece of the $1.5 trillion federal budget pie and, far more important, favorable laws protecting, vesting and increasing the power and wealth of their special interests. That's anarchy in action.
America's economic anarchists compete on a zero-sum battlefield where the rules are simple: "I win, you lose" and "every man for himself." But no one fights for the public interest. No one. The "common good" is irrelevant; only "greed is good." Terms like democracy, republic, plutocracy, oligarchy and cryptocracy no longer apply. This is war.
But what about "capitalism?" Also dead. Greed killed what Adam Smith said was the "soul" of capitalism. Capitalism now has no moral compass. Former Fed vice-chair Alan Blinder hit the nail on the head: "When economists first heard Gekko's now-famous dictum, 'Greed is good,' they thought it a crude expression of Adam Smith's 'Invisible Hand' ... But in Smith's vision, greed is socially beneficial only when properly harnessed and channeled'... when these conditions fail to hold, greed is not good."
Wall Street failed: Their insatiable greed destroyed capitalism from within, turning the American economy into a soulless zombie. The "invisible hand" Adam Smith saw as essential to capitalism in his "Theory of Moral Sentiments" died on a battlefield historians will call the new American Capitalist Anarchy or Capitalist Anarchy.
America's competing elites use huge cash war chests to hire armies of lobbyists to fight their battles. So Corporate Anarchy and Lobbyist Anarchy also fit to describe the huge army of mercenaries-for-hire lobbyists that's running our government for their corporate bosses.
Lobbyists are everywhere: There are 13,740 registered in Washington, a total of 42,000 de facto lobbyists, and one expert estimates 261,000 in the "influence-lobbying complex" throughout America. Here are seven examples of how this new Capitalist Anarchy is killing the moral fiber of America:
From Kevin Drum's "Capital City" in Mother Jones: "A year after the biggest bailout in U.S. history, Wall Street lobbyists don't just have influence in Washington. They own it lock, stock and barrel ... Congress, the president and the Fed were persuaded to let all this happen in the first place." Sen. Richard Durbin, D.-Ill.: "Even after nearly destroying the world banks are still the most powerful lobby on Capitol Hill. And they frankly own the place."
Lobbyists killed Glass-Steagall and deregulated derivatives in 1999: "Wall Street was officially turned into a casino. Banks could literally bet on anything." Banks lobbied through the '80s and '90s, spent $209 million in 1998 alone, "got what they wanted," and "were free to gamble customers' funds in any way they wanted ... they became the world's biggest hedge funds."
Politicians turned puppets: The Center for Responsive Politics says in 2009 alone Sen. Charles Schumer, D-N.Y., got $1.7 million in donations from "Big Finance," Sen. Harry Reid, D-Nev., got $1 million, Sen. Christopher Dodd, D-Conn., $745,000. Hundreds of millions.
Drum calls lobbying "the world's second-oldest profession." In the voting booth it's one man, one vote. In the world of Lobbyist Anarchy money buys votes. Big spenders? See OpenSecrets.org. Last election cycle? Defense lobby: $24 million. Farm lobby: $65 million. Health care was No. 2 at $167 million. The finance lobby was No. 1 with "an astonishing $475 million during the 2008 election cycle. That's up from $60 million almost two decades ago."
"How could all this happen so soon after the financial industry's reckless behavior nearly caused a global meltdown? Ironically, it's probably because the bailout was so successful." So today "without a sense of crisis to drive things, the political will to take on the industry has largely dissipated. Even after nearly destroying the world economy, the finance lobby is, still, simply too big to fight."
Paul Farrell writes the column on behavioral economics. He's the author of nine books on personal finance, economics and psychology, including "The Millionaire Code," "The Winning Portfolio," "The Lazy Person's Guide to Investing." Farrell was an investment banker with Morgan Stanley; executive vice president of the Financial News Network; executive vice president of Mercury Entertainment Corp; and associate editor of the Los Angeles Herald Examiner. He has a Juris Doctor and a Doctorate in Psychology.
Time Warner wants to help put MGM out of its misery.
12:38 p.m. Today12:38 p.m. March 23, 2010
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