LIBOR and Super PACs: A Heck of a Way to Run Capitalist Democracy

karl rove cashEverybody seems to know (whether they’re willing to admit it or not) that the 2012 elections are going to be the most corrupted elections by corporate money than any held in this country since the Gilded Age. Unregulated, anonymous and laundered cash is being pumped into the system at an unprecedented rate. Meanwhile, the captains of finance secretly game the system to boost their own personal profits undermining trust in “free markets.” Such corruption breeds cynicism and lower voter turn-out. Respect for governing institutions and politicians nosedives. And the more the people come to hate their own government because of this shadowy corporate and financial dominance the better these same corporations and banks can rule unimpeded by an active citizenry.

This avalanche of secret money that is debasing our politics, when viewed alongside the unfolding LIBOR scandal in the United Kingdom (where bankers are jumping ship in disgrace for fraudulently screwing with the world’s most important interest rate), reveal that we live in an age where both our politics and our markets are being managed in a way where we never get a chance to see who is really pulling the strings.

The manipulation of 501(c)(4)s and Super PACs to hide who is buying our elections dovetails perfectly with the falsification of interest rates and credit default swaps to conceal who controls the economy. The opacity of our politics is being matched by the opacity of our markets. This sorry state of affairs cannot end well.

Here’s a simple question: Can “democracy” or “free markets” function without transparency? When the Soviet Union fell we used to hear claptrap from scholars like Francis Fukuyama about the solid and unbreakable nexus linking democracy and capitalism. But our politics and markets are today overflowing with nefarious conspiracies while those in power work to conceal their practices and motivations. Sounds to me like something the KGB might cook up.

The growing public opprobrium with the whole system is why the shadowy campaign cash is so sweet for power brokers like the Koch Brothers and their business elite brethren tied to the U.S. Chamber of Commerce: They can look over the horizon of the next few election cycles and see their total control of the levers of power in Washington. It’s so close they can taste it. (That’s why Karl Rove always looks so damn happy and Mitch McConnell can’t wipe that smirk off his face.)

What the Wall Street banks did to the United States between 2007 and 2009, if we had any sense of fairness as a people, should have been fiercely opposed at all levels of government, in the criminal courts, and in congressional investigative committees. Since it was the bankers’ greed, incentive structure, recklessness, and predations on the middle class that caused (and continues to cause) so much pain and suffering in our society, Wall Street’s attack on America should have been framed as a “national security” issue. Its culprits should have been met with the full wrath of the federal government. Instead, we saw a liberal Democratic president consistently reach out to Wall Street’s bagmen and women in Congress.

Innocent people lost their jobs. Small and large investors, shareholders, pension funds, and municipalities all got swindled and the Obama administration did next to nothing about it (who has even heard of the Angelides Commission?). This coddling of Wall Street now blunts even the most well crafted political ads favoring Democratic candidates in 2012 who wish to heed the impulse of Occupy Wall Street and offer some kind of alternative vision to the corrupting control of banking elites over our political system.

In 2008, then-Senator Obama campaigned on promising to fight for a new kind of unapologetic and muscular liberalism. But when in power he accepted the major tenets of the Bush-Republican status quo that included immunity for Wall Street and a bland, matter-of-fact acquiescence to de facto Republican minority control of the Senate. Had he dedicated a tiny fraction of his oratorical skills to explaining to the American people why we should not accept these outcomes he might have been able to move the needle in favor of bolder progressive change.

What we should be doing in the United States is what the people of Iceland demanded of their leaders: hold the bankers accountable and bailout ordinary people not the big banks who were responsible for this mess.

joseph palermo

The United Kingdom is showing signs of cracking down after the latest revelations that banks in the U.K. were manipulating the LIBOR to benefit their own personal fortunes. (In Britain at least there still exists a slight dose of shame unlike the U.S. where Jamie Dimon is received in Congress as a conquering hero.) Even now with the election campaigns in full swing and the Super PACs and the 501(c)(4)s churning out the cash to buy our politicians in 2012 we still need to demand action on bringing Wall Street to justice. There shouldn’t be a statute of limitations on the murdering of 8 million jobs.

Joseph Palermo
Joseph Palermo’s Blog

Posted: Monday, 9 July 2012

Published by the LA Progressive on July 9, 2012
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About Joseph Palermo

Joseph Palermo is Professor of History, California State University, Sacramento. Professor Palermo's most recent book is The Eighties (Pearson 2012). He has also written two other books: In His Own Right: The Political Odyssey of Senator Robert F. Kennedy (Columbia, 2001); and Robert F. Kennedy and the Death of American Idealism (Pearson, 2008). Before earning a Master's degree and Doctorate in History from Cornell University, Professor Palermo completed Bachelor's degrees in Sociology and Anthropology from the University of California, Santa Cruz, and a Master's degree in History from San Jose State University. His expertise includes the 1980s; political history; presidential politics and war powers; social movements of the 20th century; the 1960s; and the history of American foreign policy. Professor Palermo has also written articles for anthologies on the life of Father Daniel Berrigan, S.J. in The Human Tradition in America Since 1945 (Scholarly Resources Press, 2003); and on the Watergate scandal in Watergate and the Resignation of Richard Nixon (CQ Press, 2004).

Comments

  1. JoeWeinstein says:

    True democracy – ‘capitalist’ or otherwise – doesn’t need or use a special class of politicians, let alone politicians whose concentrated power makes them attractive and ready recipients of corruption. 

    As a result true democracy doesn’t need or allow highly corrupted elections (or even totally UN-corrupted elections). 

    Elections – especially non-deliberative but costly mass popularity-contest elections (in which no one voter has any power to determine the outcome) – serve our current republican oligarchic system as a pseudo-populist veneer, because millions of people ‘participate’ by casting votes.  A typical mass election does not deliberatively decide actual public policies but rather just which few will get to decide those policies:  just which few folk will be those special (and readily corruptible) oligarchs who get all the public-policy decision-making power for long terms. 

    Meanwhile the very point of true democracy is to share effective public-policy decision power as much as possible among many many ordinary citizens.  As was demonstrated (at least to crude approximation) already in ancient Athens, this aim of democracy can be realized workably well by dividing decision responsibilities among many short-term deliberating teams of ordinary citizens. 

    We can massively abate corruption and have the benefits of true democracy, but that will require disenthralling ourselves of the notion that it is correct to use the term ‘democracy’ for the now-dysfunctional republican oligarchy set up by the 1787 federal constitution, or that it suffices for citizens to be mere ‘voters’ in popularity contests.   

  2. Garry walsh says:

    Watched those whore/politicians “grill” Jamie Diamon and The Decline and Fall of the Roman Empire came to mind.  Those scum have no fear of consequences. What does that say about the american voter.

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