THE UNFULFILLED PROMISE - Wall Street Domination in Government Handling of the Home Foreclosure Crisis

Advertise on more than 70 progressive blogs!

THE UNFULFILLED PROMISE

Wall Street Domination in Government Handling of the Home Foreclosure Crisis

Posted by Time for change in General Discussion
Sat Oct 29th 2011, 09:03 PM

Our financial elites and their backers in the corporate media try to sell us on the idea that we need their services so badly that we can’t afford to penalize them when they commit crimes against us. If our financial system is so fragile that we have

The U.S. home foreclosure crisis is a social disaster, a moral blight on our nation, and is at the heart of our economic crisis. William Greider, writing in The Nation, begins his article by making those points in one short paragraph:

The rebellious citizens occupying Wall Street shock some people and inspire others with their denunciations of bankers, but everyone seems to know what they are talking about: it is the barbaric and suffocating behavior of the nation’s largest banks (yes, the same ones the government rescued with public money). Right now, these trillion-dollar institutions are methodically harvesting the last possible pound of flesh from millions of homeowners before kicking these failing debtors out of their homes (the story known as the “foreclosure crisis”). This is a tragedy, of course, for the people who are dispossessed. For the country, it is a generational calamity.

Consequences – The death spiral

Later in the article, Greider describes the consequences of this crisis in greater detail:

The housing picture is ugly. Among the 55 million families with mortgages, one in five is underwater – they owe more on their mortgage than their house is worth – or already delinquent. That’s 10.4 million families who are sliding toward failure and foreclosure… As a result, the housing market will remain depressed for years…

Economic recovery may have to wait until that (housing) surplus is gone, because the housing sector has always led the way out of recession. The more housing supply exceeds demand, the more prices fall. The more prices fall, the more families get sucked into the deep muddy. The vicious cycle is known in the industry as the death spiral. So far, there’s no end in sight.

A SOLUTION: DEBT FORGIVENESS – CRITICISMS AND RATIONALE

Greider proposes the core of a solution:

There is a solution, and it will appeal to the rebellious spirits occupying Wall Street because it combines a sense of social justice with old-fashioned common sense. It is Forgiveness – forgive the debtors. Write down the principal they owe on their mortgage to match the current market value of their home, so they will no longer be underwater. Refinance the loan with a reduced interest rate, so the monthly payment is at a level that the struggling homeowner can handle. This keeps families in their homes, with a renewed stake in the future. It gives homeowners incentive to keep up their payments, because once again they have some equity and the opportunity to accumulate much more.

Before providing the moral rationale for that solution, Greider notes the opinions of its detractors:

Some people are morally offended by the idea, and not just bankers… Letting failed borrowers off the hook encourages bad habits, they say, the so-called “moral hazard” of inviting others to skip their debt payments too. Forgiveness does require a measure of sympathy – a sentiment in scarce supply among governing elites. Policy wonks and politicians have been taught by a generation of hard-boiled titans and their business-school apologists to brush aside fellow feeling and focus only on the bottom line. The common good, conservatives claim, is best served by adhering to the unsentimental economics of “me first, never mind the losers.” That pernicious doctrine still reigns in the political culture…

Then Greider goes on to describe why some form of debt forgiveness is the right thing to, morally and economically:

Forgiving the debtors is the right thing to do, because the bankers have already been forgiven. The largest banks were in effect relieved of any guilt – for their crimes of systemic fraud or for causing the financial breakdown – when the government bailed them out, no questions asked. The Obama administration followed up with a very forgiving regulatory policy that basically looked the other way and ignored the fictional claims on bank balance sheets. Instead of forcing honest accounting and rigorous reform, the administration adopted a strategy of soft-hearted regulation…

The government’s rationale for rescuing bankers first was that the economy cannot recover until the financial system is healed. The premise did not prove out – banks revived, at least partially, but not the economy.

The same rationale applies, more logically, to failing homeowners. A heavy blanket of bad debt is smothering economic activity. Until the debt is lifted from the housing market… the economy is unlikely to regain its normal energies. So debt forgiveness is not just a moral imperative; it’s also an economic necessity.

THE ROLE OF INEQUALITY AND HISTORICAL PARALLELS

The role of inequality

Greider discusses the role of inequality in producing our current crisis:

Modern economists and their supposed “science” generally ignore the ancient wisdom… Gross concentrations of money at the top help explain why the system eventually stalls out. This is a basic insight that ought to inform the agenda for recovery. Inequality matters.

Economists Michael Kumhof and Romain Rancière wrote a breakthrough paper for the IMF that made the connection between inequality and financial crisis. “The crisis,” they wrote, “is the ultimate result, after a period of decades, of a shock to… two groups of households, investors who account for 5% of the population… and workers who account for 95% of the population.” The 5 percent, broadly speaking, lend to the 95 percent, and in so doing gain still greater wealth and power. The shock comes when the creditor class suddenly realizes that the borrowers are drowning in debt and cannot possibly absorb any more…

In the early 1980s the 95 percent had debts equal to about 65 percent of their income. By 2006 that figure had risen to 140 percent. They were devoting so much of their paychecks to making payments on old debt – credit cards, equity lines and mortgages – there was nothing left to make the payments on new debt. Defaults and bankruptcies were already swelling….

Parallels to ancient civilizations

Greider provides some very interesting parallels to ancient civilizations:

The American financial system seems ultramodern in its complexity, but it is actually ancient in the brutal ways wealth asserts power over others. The earliest societies were torn by conflicts between lenders and borrowers, the rich versus the poor. They were compelled to fashion hard rules and put restraints on lending to curb the cruelties and promote a moral minimum for social justice. Nearly every country and culture embedded these values in religious tenets that governments enforced…

The arguments typically began when kings or landowners lent some of their surplus wealth to peasant farmers, then took away the debtors’ property if they failed to repay the loans. In olden days, the creditor would seize the debtor’s livestock and vineyard, perhaps even his children to be enslaved as household servants, until the debts were repaid. If the failure of borrowers persisted, the wealthy lenders would wind up owning all the property, with the peasants reduced to tenant farmers on the land they had once owned. The negative cycle stopped when the peasants could no longer borrow because they had nothing left for lenders to claim in default.

Economic life at that point was frozen or depressed, no longer functioning. In a rough sense, this resembles what happened to our economy in the financial crisis. Debtors were tapped out, up to their eyes in debt, and creditors recognized that they could not lend to them anymore without losing their money. In modern economies, no one takes away their children, but they do seize homes and cars and other assets…

Here is what Americans can learn from the ancients: severe inequality of wealth and income is not just a question of morality. Inequality is the fundamental source of the disorder that leads to financial crisis and chokes off the economy. Ancient religious
principles like the limits on interest rates were a practical way of maintaining balance in economic life. Taking away those rules – as US politicians did when they repealed prudent regulations of banking and finance – in effect authorized the growing
inequality that eventually leads to chaos.

Parallels to the greatest economic crisis in U.S. history

Greider describes similar parallels with the Great Depression of the 1930s:

The same ominous combination – a run-up of debt accompanied by gaping inequality – preceded the crash of 1929… But why did ordinary debtors fall into this trap? The standard line is that they were… eager for consumer pleasures they couldn’t afford. This is true for some, but the explanation libels most working people. Wage stagnation started in the 1970s and spread widely in the Reagan era. Typically, as incomes faltered, families faced two bad choices – either go deeper into debt or surrender their middle-class standard of living. Naturally, most people tried to hang on to what they had.

The responses to this crisis are well-known. People worked more – women and teenagers entered the workforce, family members took two or three jobs. And they borrowed more, paying the bills with credit cards. In these terms, average families were making heroic efforts to maintain their standard of living… At some point the merry-go-round would have to stop. The retreat is now in full flight… Wages are stagnant or falling. Foreclosures are tearing through communities, and falling home prices are destroying family equity. Americans … are experiencing the reverse New Deal.

GOVERNMENT FAILURE TO ACT

Given that home foreclosures were at the heart of our economic crisis, one would hope that government interventions would be targeted towards helping homeowners rather than relying on a trickle down sort of solution in which primarily banks were targeted for relief. But it didn’t work out like that. William Kuttner in his book, “A Presidency in Peril – The Inside Story of Obama’s Promise, Wall Street’s Power, and the Struggle to Control our Economic Future”, describes how this crisis was handled by both the Bush and Obama administrations:

The Bush administration made the fateful decision to give primary relief to banks, not to homeowners. Obama continued the basic policy… The collapse in housing prices had wiped out at least $7 trillion of net worth of American families…

Obama’s solution was a program called “Making Home Affordable”. Kuttner explains that this program had several fatal flaws. Perhaps the most fundamental flaw was that it was voluntary for the banks. Instead of mandating actions on the part of banks, they were given various “incentives”. But the incentives weren’t enough to make it worth the bank’s while to provide much help to homeowners. In fact, in many cases they had an incentive to foreclose rather than help the homeowner stay in the home. Consequently, the banks offered very little help for most homeowners.

There was one provision of Obama’s bill that had some teeth. That was the proposed authority of bankruptcy judges to compel banks to modify loans to prevent foreclosures. This provision was fiercely resisted by the financial industry, and therefore given very little support by the Obama administration. Kuttner explains:

In this key battle, the White House did not lift a finger to urge wavering legislators to support their president… Word was quickly passed on Capitol Hill that this was not a provision that mattered to the White House.

The only provision of the bill that was opposed by the financial industry therefore died in the Senate.

Ignored alternatives

As the Obama administration was attempting to come up with a plan to address the home foreclosure crisis, and it looked as if their primary intervention would be a bailout of banks, my daughter posed an idea to me: Why not give or loan the money directly from the government to the homeowners? Why go through the banks? How do we know that they will put the money to any useful purpose? I responded something like, “Well, that makes sense to me, and I’d like to see it happen. But I don’t hear anyone talking about it. I don’t know why not. Maybe it’s because the corporatocracy feels that if you give money to banks, that’s capitalism, and therefore good, but if you give money people who are in the bottom 99% on the wealth scale, that’s socialism, and therefore bad.”

I later learned that Kuttner (as well as former U.S. President Franklin Roosevelt) was thinking along very similar lines:

There is a straightforward alternative to the administration’s approach to foreclosure prevention, but it would require much more direct government involvement. And it would take a nervy battle rather than a friendly collusion with Wall Street. In the case of unaffordable mortgage loans still held by banks, a “public option” of direct government financing could reduce borrower costs without relying on largely futile incentive payments to bankers…

The comparison with the New Deal is instructive – and depressing, when one contrasts the boldness of Roosevelt with the timidity of Obama. Faced with an epidemic of mortgage foreclosures, the New Deal created four new institutions…

Maybe that’s why FDR’s first and third presidential terms demonstrated the two largest average annual increases in job growth of all presidential terms from 1921 (when records are first available) to the present.

The Obama administration’s ‘trickle down’ approach

Kuttner comments on the difference in government solicitude for banks, compared with the rest of us – the bottom 99%:

The contrast was all too vivid – several trillions in loans and loan guarantees for the banks, and a grudging $3 billion for the homeowners who had been the banks’ victims. As a consequence of the administration’s half measures and failure to move boldly, the mortgage foreclosure crisis is continuing to drive millions of Americans from their homes, depress housing prices… and retard the recovery… Refinancing underwater retail mortgages is comparatively easy. It just requires political will.

Greider also comments on the failure of the Obama administration to address the needs of ordinary people, while favoring powerful financial institutions:

The largest and most powerful banks are standing in the way of this solution. The Obama administration is standing with them, because bankers and other creditors would have to take a big hit if they were forced to write down the debt owed by borrowers… That risk presumably explains why the Treasury Department and various housing agencies try to dodge the growing demands for debt forgiveness. Fannie Mae and Freddie Mac, which guarantee roughly 70 percent of all mortgages and are now virtually owned by the government, have flatly rejected the idea, and so have the Federal Housing Administration and the Veterans Administration… President Obama seems to be playing a sly double game – protecting banks from sharing the pain while proclaiming sympathy for embattled homeowners…

Laurie Goodman, a housing-finance expert, made a similar point in testimony before the Senate Banking Committee, telling them that the government is making it more difficult for homeowners to get new mortgages, stating: “The Treasury has not let it happen… Almost every single proposed government action has been aimed at further tightening credit availability”.

Greider makes a parallel between the failed Obama administration’s ‘trickle down’ approach and Japan’s handling of a similar problem in the 1990s:

The president is losing the policy bet he made at the outset of his administration. Government regulators, he decided, would give leading banks a pass on stern cleanup and rigorous reforms. With blanket forbearance… the assumption was that the largest financial institutions could earn their way back to solvency, gradually shedding all those “toxic assets” left over from the collapse of the housing bubble. Recovery of the broad economy was supposed to follow.

Obama’s bet looked very much like the one Japan made in the 1990s, after its spectacular housing bubble burst. Obama’s failed just as Japan’s did, and for some of the same reasons. Neither nation wished to take on the biggest banks or do something about the mountain of bad debts suppressing new economic activity… Obama hasn’t changed his failed strategy or relieved the advisers who sold it to him. But the original plan has come back to haunt him…

CAUSES

The corrupting influence of money in politics

The most obvious explanation for why the financial industry is so well treated by our government, compared to their treatment of ordinary people, is the corrupting influence of money in politics. This problem is so well known, and I’ve written about it so much that I won’t spend the time that it deserves here. Ari Berman describes the problem succinctly in an article titled “Occupy Wall Street Hits K Street”:

If you want to understand how the top 1 percent have accumulated such power in American politics, look no further than Washington’s K Street lobbying corridor. Wall Street has long been the dominant player in the capital. “The banks,” Senator Dick Durbin said in 2009, “are still the most powerful lobby on Capitol Hill. And they frankly own the place.” The financial sector has spent more money on campaign contributions and lobbying than any other sector of the economy – $4.6 billion on lobbying since 1998, according to Open Secrets. This year, commercial banks and securities and investment firms have spent over $82 million on lobbying, employing over 1,000 lobbyists.

Contributions to Barack Obama’s 2008 campaign for president perhaps provide an explanation for his favored treatment of the financial industry, with over $3 million received from Goldman Sachs, JP Morgan Chase, Citigroup, and Morgan Stanley combined.

Misplaced respect for and confidence in our financial elites

Another factor that enables the financial elites to grab so much power is that they are surrounded by a – vastly misplaced – mystique, awe and respect. No matter how many mistakes they make, or how much money the American taxpayers have to put out to bail them out of the trouble that they created, that mystique, awe and respect still remain, at least to some extent.

For example, it should have been obvious by the time that Barack Obama took office that Robert Rubin and Larry Summers – both who served as Treasury Secretary under Bill Clinton – played a major role in the financial disaster that then confronted our country. Rubin was a major advocate of financial sector deregulation, and he was the prime architect of the repeal of Glass-Steagall. Following his tenure as Treasury Secretary, his irresponsible risk taking at Citigroup drove it into the ground. Robert Kuttner comments on the absurdity of Obama’s reliance on Rubin’s financial advice:

Given the abject failure of the financial deregulation that Rubin championed as Clinton’s top economic adviser, followed by the collapse of the business model that he promoted as senior executive at Citigroup, it is remarkable that a consummate outsider like Barack Obama did not view Rubin (or his protégé Summers) as fatally damaged goods. On the contrary, Obama felt he needed men like Rubin and Summers for tutelage, access, and validation. That itself speaks volumes about where power reposes in America…

As a member of Ronald Reagan’s Council of Economic Advisors and as successor to Robert Rubin as Bill Clinton’s Treasury Secretary, Larry Summers was a big proponent of the kind of financial deregulation that led to our current crisis. He was ousted as president of Harvard University in 2006 for pursuing reckless financial policies. Yet Obama appointed him as his top economic advisor. Kuttner comments on that:

Summers’s checkered past was more than sufficient to persuade {Obama’s} political team and the official vetters that he was not an acceptable risk for Senate confirmation (for Treasury Secretary). But evidently it did not give much pause to the premise that Obama should put Summers in charge of America’s economic policy.

Obama’s re-appointment of Ben Bernanke as Chairman of the Federal Reserve and Rahm Emanuel as White House Chief of staff were also symptomatic of his misplaced respect for Wall Street insiders. Bernanke was so against transparency in government that he agreed to provide the Inspector General of the TARP program with certain information only on condition that it not be shared with Congress. His actions were characterized by an extreme anti-regulatory philosophy. In Emanuel’s three terms in the U.S. House of Representatives, he was the largest recipient of funds from the financial industry.

It’s not just Obama. Robert Scheer, in his book “The Great American Stickup”, commented upon the fact that our government is filled with public officials who rely on advice from the financial elites and their lobbyists for just about everything:

I found that congressional representatives or their staffers would often respond to my questions by helpfully referring me to lobbyists who they conceded knew a great deal more about the subject than those actually paid by taxpayers to represent the public interest. That these staffers could do so without embarrassment speaks enormously to the incestuous arrangements of our political process. Not only are these lobbyists seen as “experts” on Capitol Hill, rather than simply corporate mercenaries using cash to buy laws and access, but they are treated with a palpable respect, as are the corporate executives who often accompany them… They are received as admired insiders, a resource to be milked for knowledge and campaign contributions. Their presence unchallenged and unquestioned, they tromp up and down the halls of power, writing laws, killing bills, and generally putting the lie to the fantasy of a government “of the people, by the people, for the people”.

Scheer also explains how this is translated into policy:

The word “dole” is usually applied pejoratively to welfare mothers sustained in their dire poverty by meager government handouts, not to top bankers ripping off the taxpayers. But as opposed to welfare mothers, who must survive stringent monitoring, the bankers would be largely self-monitoring. Under Obama as with Bush and Clinton before him, there was to be tough love for welfare mothers but never for bankers…

Matt Taibbi, in his book, “Griftopia – Bubble Machines, Vampire Squids, and the Long Con that Is Breaking America”, explains how that awe and respect that are automatically afforded to our financial elite is furthered by our corporate media in the rules they apply to what can and cannot be said:

You can talk abstractly about class economics using clinical terms like “income disparity”. But in our media you’re not allowed to just kick the rich in the balls and use class-warfare language. The taboo isn’t so much the subject matter, the taboo is the tone… You can’t call them crooks and imply that they haven’t earned their money by being better or smarter than everyone else, at least not until they’ve been indicted or gone bankrupt…

When Taibbi wrote a very critical article in Mother Jones about the misdeeds of our financial elite, and suggested that our bailout of them was too generous, he was lambasted by the corporate media. However, they did not contest his facts. Rather, their main point was that no matter how bad the financial elite are, we need them and they must be saved. Here is a typical criticism on this issue by David Brooks:

Political populists… can’t seem to grasp that a politics based on punishing the elites won’t produce a better-educated work force, more investment, more innovation or any of the other things required for progress and growth… The populists have an Us versus Them mentality. If they continue their random attacks on enterprise and capital, they will only increase the pervasive feeling of uncertainty, which is now the single biggest factor in holding back investment, job creation and growth.

What a bunch of baloney. Attacks on our financial elites are not usually “random”. There is no politics that is “based on punishing the elites” just for being elites. People like Matt Taibbi criticize them when they exert their considerable wealth and power to “influence” public officials to create laws or policies that allow them to rob the American people. Our financial elites and their backers in the corporate media try to sell us on the idea that we need their services so badly that we can’t afford to penalize them when they commit crimes against us. If our financial system is so fragile that we have to tolerate our money being stolen from us in order to prevent the system from collapsing, then it seems to me that the system needs a complete overhaul.

PROSPECTS

Despite the massive corruption of our political system, and the massive amounts of money and power arrayed against ordinary people today, Greider sees some reason for optimism that our economic crisis will eventually be constructively dealt with – though it may get a lot worse before it gets better.

The issue of forgiveness has little traction in mainstream debate, but prospects for action are far more promising than cynics assume. I am convinced that the debt-forgiveness question will eventually move to center stage… If it is not dealt with, the problem will become larger and more destructive. The politics will change when the public realizes that the economy will remain stagnant until banks are forced to a reckoning and the huge overhang of bad debt is eliminated.

My evidence for optimism is a sampling of authorities from the financial system – banking and housing experts, financial economists, even a few investment bankers – who are already calling for debt reduction. Moral sentiment aside, people who know how the financial system works understand the ugly consequences of doing nothing. The industry advocates of dramatic write-downs are not radicals, but the logic of their position has so far been largely ignored by the major media.

Active citizens are spreading the word, however. While Lower Manhattan was being occupied, the New Bottom Line, a coalition of community groups, church folks and other networks, was staging daily clashes with big banks around the country. George Goehl of National People’s Action sees the level of direct action and nonviolent civil disobedience rising rapidly among frustrated people of conscience.

Discuss (14 comments) | Recommend (+25 votes)

The Unfulfilled Promise

The Unfulfilled Promise of the American Dream: The Widening Gap between the Reality of the United States and its Highest Ideals

Time for change

Notwithstanding the lofty sentiments and purpose of the U.S. Declaration of Independence, the reality of the United States of America did not then – and never has – lived up to its ideal. Our nation remains today a long way from fulfilling the promise implied by those ideals. Yet, our Declaration was a great start, and it has long shone as a beacon of hope for people all over the world.

Throughout our history, while many have striven to close the gap between our highest ideals and the reality of our nation, others have focused on the accumulation of private wealth and power, at the expense of everyone else. In recent decades the latter have gained much ground, leading to increasing imperialism abroad and deteriorating democracy at home, characterized by routine (and legal) bribery of our public officials, the fusion of government and private corporate interests (corporatocracy), a corrupt election system largely in the hands of private corporations, a corporate controlled communications media, and the widespread acceptance of Executive Branch secrecy, routinely justified with little if any questioning, by the magic words “national security”. All of this is rapidly turning our country from the democracy proclaimed at our founding into a plutocracy (government by the wealthy and for the wealthy). The result is the most obscene wealth gap our country has ever known, the highest imprisonment rate in the world, rampant militarism, routine flaunting of international law, the least efficient health care system in the developed world, a pending environmental catastrophe that threatens to destroy the life sustaining forces of our planet, and myriad other problems that threaten to destroy our nation and tyrannize our people.

My new book, The Unfulfilled Promise of the American Dream – The Widening Gap between the Reality of the United States and its Highest Ideals, explores the roots and consequences of the demise of our democracy, and why most Americans have been unable to understand this process or even become aware of it. A good understanding of why and how we have deviated so greatly from the ideals of our nation is the first and necessary step towards getting back on the right track and revitalizing our society.

The book is currently being sold in electronic PDF format and can be purchased at http://www.unfulfilledpromise.com/Buy-the-... for $3.99. It will also soon be available in Amazon Kindle format. DU members who cannot afford to buy the book but would like to read it can pm me with your e-mail address, and I will send you a free PDF copy.

I’ve previously posted on DU a slightly earlier version of the introduction to the book, which is also posted at my site. Here is the Table of Contents, followed by a brief description of the three parts of the book:

TABLE OF CONTENTS

Introduction
Acknowledgements
Prologue – What is Wrong with the United States of America?

Part I – Root Causes of the Impending Demise of American Democracy
Chapter 1 – Legalized Bribery
Chapter 2 – Human Psychological Factors
Chapter 3 – Corporatocracy
Chapter 4 – Corporate Control of Media
Chapter 5 – Corrupt Election System
Chapter 6 – Government Secrecy
Chapter 7 – American Exceptionalism

Part II – A Sampling of Imperialist Actions
Chapter 8 – Slavery and its Legacy
Chapter 9 – Early U.S. Imperialism
Chapter 10 – U.S. Imperialism in Cold War
Chapter 11 – Iraq War and Occupation
Chapter 12 – Afghanistan War

Part III – Consequences
Chapter 13 – Election of George W. Bush
Chapter 14 – War and Imperialism
Chapter 15 – Class Warfare
Chapter 16 – Predator Financial Class
Chapter 17 – Shock Therapy
Chapter 18 – Contempt for Int. Law
Chapter 19 – The “War on Drugs”
Chapter 20 – Climate Change
Chapter 21 – “War on Terror”
Chapter 22 – Health Care
Chapter 23 – Unaccountable government
Chapter 24 – Response to 9/11 Attacks
Epilogue

PART I – Root Causes of the Impending Demise of American Democracy

It is somewhat difficult to separate the causes of our problems from their consequences, since they combine to form a long chain of cause leading to consequence, leading to more consequences, etcetera. Nevertheless, it seems worth while to identify the root causes of our problems, those that occur early in the chain and lead to so many of the tragic consequences we see today. The only chance we have of reversing the demise of our democracy is through addressing and attacking its root causes.

At the top of the list is the systematic bribery of public officials by the powerful corporations (Chapter 1) whom our government is charged with regulating in the public interest. Instead of calling it bribery, we call it “campaign contributions”, but what we call it isn’t as important as what it is. It is hard to fathom how democracy can survive when such a practice is legal and condoned.

Working in tandem with our system of legalized bribery is the nature of the people who inhabit our country. That is not to say that Americans are inherently substantially different than any other people. Human beings are imperfect, and that is probably a major reason why in a world where civilization began more than five millennia ago, the oldest written national framework of government in the world today – the Constitution of the United States of America – is only a little more than two and a quarter centuries old. Chapter 2 explores the roles of basic human needs, authoritarianism, psychological defense mechanisms used to prevent us from perceiving reality as it is rather than as we’d like it to be, and corrupted ideologies in causing us to passively accept the accumulation of power in the hands of ambitious and ruthless individuals who care about little else than expanding their own wealth and power.

When bribery of public officials is tolerated as an inevitable aspect of public life, government inevitably grows close to the wealthy interests that shower it with money in return for legislative and other favors. A malevolent symbiosis grows between the state and corporate power, resulting in rule by an oligarchy that is highly detrimental to the lives of ordinary people (Chapter 3). Using their accumulated wealth and power to manipulate our legislative process, the oligarchy grabs for more and more control of the communications media (Chapter 4) that are used to control the information available to and shape the attitudes of our nation’s people, in pursuit of their own narrow interests.

Since the 1980s an orchestrated campaign has been underway to demonize “big government”, thereby paving the way for private corporate control over more and more functions that were previously deemed intrinsic functions of government. Among those functions is the running of public elections (Chapter 5) – the function that symbolizes democracy perhaps more than any other single function. Consequently, the purging of selected registered voters from our computerized voter rolls has become a routine recurring event throughout much of our country, and without a doubt determined the results of the 2000 – and probably 2004 as well – presidential election. Just as bad, more and more of the counting of votes in our public elections have been turned over to private corporations, which count our votes using electronic machines using secret software to produce vote counts that cannot be verified by anyone.

Bribery, the fusion of government and private interest, fake and biased news, and corrupt elections are not things that government and its corporate allies want us to know about. Consequently, they construct walls of secrecy (Chapter 6) to keep us from obtaining information that sheds light on their activities. The perfect phrase for facilitating this is “national security”. When our government tells us that the “national security” requires that certain things be kept secret from us, the understanding is that to question such a pronouncement is unpatriotic, and to actually attempt to obtain the “secret” information may be treasonous.

But indefinitely maintaining secrets from the American people can be very difficult, because at least some people want to know what their government is up to. So in addition to the formal mechanisms of secrecy, informal mechanisms are constructed (Chapter 7) to keep vital information away from us. One of the primary methods for doing this is to make certain sensitive subjects taboo – that is, to create the widespread belief that discussion of these topics is so outside the bounds of acceptable human discourse that anyone who discusses them should be shunned by society, or worse. The most common issue that falls into this category is any discussion that sheds light on the disparity between American ideals and the reality of life in our country today.

PART II – A Sampling of Imperialist Actions in U.S. History

Notwithstanding the fact that our founding document says that “all men are created equal” and speaks of the inalienable rights of humankind, the United States has throughout its history partaken of massive exploitation of other peoples.

It is estimated that at the time of our birth, 18% of our population was black slaves. In our expansion westwards during the late 18th and 19th centuries, we decimated the original inhabitants of our continent, and often treated them with great cruelty. In 1846 we manufactured an excuse for war with our neighbor Mexico, in which we continued to expand our country westwards and southwards. In 1893 we began our overseas imperialism with the conquest of Hawaii. Our overseas expansion was greatly accelerated in 1898 with our participation in the Spanish-American War, which led to our conquest of Cuba, Puerto Rico, and the Philippines. With our arrival at world superpower status at the end of World War II, we began the Cold War, which led to and served as a rationalization for covert and/or direct military actions against myriad foreign nations over the next 46 years. With the September 11, 2001 attacks on our country, we declared a perpetual “War on Terror”, which served and continues to serve as an excuse to invade and occupy Iraq and Afghanistan, nations that posed no threat to us. We do not know when or if this perpetual war will ever end. We don’t know how many additional imperial conquests it will lead to.

Most Americans don’t think much about all this. Many of these actions are done in secrecy, and the American people don’t find out about them until many years later – or we never find out about them at all. Those that we do know about are spun into the most favorable light, to make them seem benign or even noble.

But these actions come at great costs: in the lives of our soldiers; in the ruined lives of the peoples of the victim countries; in trillions of dollars cost to our people and their future generations; in our international reputation; in anti-American hatred leading to terrorism; and, to our democracy itself. For how can a nation claim to believe in the inalienable rights of humankind specified in its founding document, while making a mockery of that belief in the way it treats other peoples? For that reason alone it is worth while to take a brief look at our long history of imperialist actions.

PART III – Consequences

In the Prologue I give a brief account of what I see as some of the worst and tragic consequences of the root causes that I discuss in Part I – to enable the reader to see where this book is heading. When elections of our public officials are for sale to the highest bidder… when our public officials are so addicted to the “campaign contributions” of their wealthiest constituents that they develop a symbiotic relationship with them… when our communications media are owned and controlled by an oligarchy of wealthy elites… when our citizenry lack the ability to differentiate propaganda from reality… when we allow machines provided by private corporations to count our votes using secret electronic software… then we should expect that the consequences will not be pretty or comfortable for the vast majority of our citizens.

In Part III, I explore those consequences in much greater detail, in the hope that the reader will agree with me that these are very serious problems, and that they must be successfully addressed if our country is ever to fulfill the promise of its ideals, or even make progress in that direction. When enough Americans recognize our problems as problems, stripped of the gloss and spin put on them by our oligarchy, they will rise up and do something about them. Until then there will be no progress, and we are very likely to head in the direction of all the former empires of our planet, ending in chaos, widespread catastrophe, suffering, and ignominy.

Profile Information

Time for change

Not a DU Donor

12582 posts

Member since Thu Dec 2nd 2004

Silver Spring, MD, US

Male

Visit Homepage

Visitor Tools

Use the tools below to keep track of updates to this Journal.

	Track this Journal
	Blogroll this Journal
	RSS/XML

The Usual Suspects

	The Top 10 Conservative Idiots Mondays
	The Crisis Papers Tuesdays
	Ask Auntie Pinko Thursdays
	Blog Box Fridays
	Hate Mailbag Whenever

Greatest Threads

The ten most recommended threads posted on the Democratic Underground Discussion Forums in the last 24 hours.

More Greatest Threads

My Forums

Democratic Underground forums and groups from my "My Forums" list.

	Activist HQ
	Election Reform

Random Journal

Discussion Forums

Enter Discussion Forums

Big Forums

	Latest Breaking News
	Editorials & Other Articles
	Political Videos
	General Discussion
	General Discussion: Presidency
	The DU Lounge
	Ask the Administrators

More Forums

	Topic Forums (35)
	State & Country Forums (56)
	DU Groups (136)

Today's Featured Forums

	September 11
	Iowa
	Ancient Wisdom and Pagan Spirituality Group
	Deaf/Hard of Hearing Group

Latest Threads

The ten most recent threads posted on the Democratic Underground Discussion Forums.

MadFloridian...
By formercia

FL GOP tries to close state pension system to new workers, yet take THEIR pension at 2X accrual rate
By seafan

FL Gov Rick Scott: Allen West would be a "great" pick as his Lieutenant Governor
By seafan

FL GOP denies $51 billion federal Medicaid to poor, yet order cheap health care for themselves
By seafan

Happy Mother's Day
By formercia

I love DU2!
By Enthusiast

Florida Senate President Don Gaetz (R) ran company now accused of Medicaid fraud (Rick Scott redux)
By seafan

Mediterranean diet cuts risk of heart dis-ease
By No Elephants

Reps DeFazio and Coffman trying to abolish selective service system.
By No Elephants

Looking good for a Naomi Judd Senate run? If so, can she win in Kentucky?
By No Elephants

More Latest Threads