So, obviously, the richest are getting much, much richer and luxuriating in a modern Gilded Age. With a cesspool of corruption as its core, a cartel of western financial institutions and the much documented military industrial complex—especially in the United States, United Kingdom and France—have formed a “black hole” alliance, out of which nothing seems to escape. Think “bailout.” Passed under the guise of stimulating a zombie economy, it seems we’ve been left with zombie banks and bankers, preying on the blood of its victim, humanity. Unemployment in the U.S. remains over 22 percent, and an economy dissembled by outsourcing—by way of agreements such as NAFTA and GATT—still wavers due to a grave lack of industrial export capacity and uncertainty surrounding the Federal Reserve Note as the world’s reserve currency. In the interim, a global market correction leaves domesticated populations—dependent upon the most voluminous investments made, typically, by demise-of-the-state globalists—fearful of the precarious present and future. For the global brain, the fear is cognitively and physically paralyzing.
As the economic union that, ultimately, became known as the European Union passes into its second phase—continental austerity—the world watches as guinea pig economies such as Iceland and Greece are forced to restructure their economies based on the new model, a lower and less-free standard of living. Iceland, God bless them, is putting up a fight against their banking masters. Resistance in Greece is mounting. Many other countries, such as the U.S. and Britain, are “putty in the hands of the police state,” as former assistant secretary to the treasury under Ronald Regan, Paul Craig Roberts, put it. Alongside a burgeoning multinational, coordinated police state apparatus, global institutions—such as the International Monetary Fund—take the reign of sovereign nations in the newfangled post-democratic era, directing their futures while anticipating dissent and riots.
While the “unwashed masses” bemoan a coincidental and inevitable banking collapse and depression, more astute minds understand the true nature of the ominous and indicative era-defining downturn. Last week, it was announced, the investment bank Goldman Sachs is to face civil charges for fraud. This is but one case among many against financial institutions around the world. As the Guardian UK reports, “Big Finance in the 21st century turns out to have been Big Fraud.” The paper reports, also, that Britain—the epicenter of the world financial system at present—has, as of yet, not brought a single bank up on charges. “We have to live with the fiction that our banks and bankers are whiter than white, and any attempt to investigate them and their institutions will lead to a mass exodus to the mountains of Switzerland. The politicians of the Labour and Tory party alike are Bambis amid the wolves.” (1)
In Ireland, Sean FitzPatrick, the ex-chair of the Anglo Irish bank was arrested last month and interrogated over—more likely nicely requested to provide some fuzzy details—alleged fraud. Last week, the parliament of Iceland handed a dossier on the Icelandic banks to its public prosecution service. Lehman, a court-appointed examiner discovered, consciously manipulated its balance sheets to appear stronger than it was. UBS, in Switzerland, has had to defend itself from the U.S.’s Internal Revenue Service for allegedly running 17,000 offshore accounts to evade tax.
Deception by banks and bankers, says the Guardian, is the root of the charges. According to the Securities and Exchange Commission, Goldman Sachs created financial instruments that were designed to transfer wealth to one favored client from other, less favored ones. The charge indicts Goldman’s vice-president, Fabrice Tourre, as having designed financial instruments composed of valueless sub-prime mortgages at the instruction of a hedge fund client. The exotic instrument, known by the higher echelons of Goldman Sachs to be valueless, was sold to ignorant investors. Goldman says the buyers were “among the most sophisticated investors” in the world. Goldman Sachs was the top campaign contributor to Brand Obama.
Hope and Change, Hope and Change, Hope and Change, Hope and Change.
Mark Twain’s Gilded Age doesn’t compare to todays, although many of the elite players remain the same. Robert Frank dubbed the world of this rising superclass “Richistan.” In Richistan Rolex watches are junk, akin to cheap watches worn by patrons of Wal Mart. Instead, Richistanians wear proudly $736,000 Franck Muller timepieces, and write with $700,000 Mont Blank jewel-encrusted pens, while their bodyguards carry $42,000 Louis Vuitton handbags for wives and mistresses. Their social lives take place at clubs open only to those with $100 million and more, they play golf on $650,000 gold club memberships, eat $50 hamburgers and $1,000 dollar omelettes, drink $90 bottle Bling mineral water and drink $10,000 “martinis on a rock.” Not sure what that last delicacy is? Oh, nothing other than gin or vodka poured over a diamond at New York’s Algonquin Hotel.(2)
The Richistanians are the CEOs who have outsourced their companies and exchanged American wages for $100 million bonuses for none other than themselves. They are investment bankers and hedge fund managers, the creators of subprime mortgage derivatives that threaten to collapse the economic foundation of western civilization. These proprietors—the self-proclaimed fittest, the elitists, illuminists, masters of the universe, slave owners; whatever you wish to call them—are the owners of wealth unimaginable to the average person; and their values and morals equally unimaginable to most, the inverse of the honest person.
The real wages and salaries of American workers are plummeting. Their debts are at all time highs, while the prices of their main asset—the home—falls due to overbuilding and fraud-based financed. For investment bankers, life is good. These persons let their “invisible trade” do their work for them. They collect fees for creating financing packages for debt. Many officials across the board have outright admitted that, in fact, the real values of repackaged debt instruments are unbeknownst to both buyer and seller. Most derivatives are never priced by the market. Never before in the history of the United States has an elite exercised such control over the state and, therefore, people. Without millions of dollars, ones hope of even running for public office is decimated early on.
The Gilded Age of old does offer us some perspective. Those thirty five-years, from the Civil War’s end until the end of the First World War, saw the United States race from a war torn nation to a global power broker. Not only was the U.S. recovering from a bloody war, but, also, from the loss of a divisive, but respected President in Abraham Lincoln. Lincoln had foreseen what the future had in store: (3)
“I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. . . . corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed.”
The hyper-industrialization that took place after the war emphasized the development of railroads, steel mills, and oil fields. In fact, at the turn of the twentieth century, Los Angeles was a huge oil producing region—a la Saudi Arabia—and would give rise to “car culture” at the turn of the twentieth century, in which we all drive by feel, usually solo, to our offices in the sky—or the unemployment office. (4)
Like today, the period from 1865-1900 was one of very rapid change. Efforts to circumvent the rights gained for blacks during the preceding decades were quite successful, and the country was to be segregated for another one-hundred years. Further, the Fourteenth Amendment, originally drafted to give blacks more rights, was eventually used by a paid-off Supreme Court to imbue corporations with personhood and, therefore, rights under the Constitution. This period represents the time when corporations began expanding their activities across state lines—and eventually across national borders—with the help of robber barons such as John D. Rockefeller and J.P Morgan.
As United States society figured how what to do with newly freed slaves, big business was on the rise. To many of these corporations, the Fourteenth Amendment—drafted to free slaves—offered an opportunity to expand their power. Of the 150 cases regarding the Fourteenth Amendment leading up to the end of the nineteenth century, 15 involved blacks and 135 involved firms. Blacks won only one case of those 15. Corporations, on the other hand, succeeded in utilizing the Fourteenth Amendment to shield them from governmental regulation. (5) In an 1886 tax dispute between the Southern Pacific Railroad and the state of California, Chief Justice Morrison Waite evidently advised attorneys to skip testimony regarding whether the Fourteenth Amendment’s equal-protection clause included corporations, for “we are all of the opinion that it does.” (6)
It was The Gilded Age: a booming exterior only covered the devastated undertow. The industrial and political elites in both the north and south had organized the largest streak of economic growth in human history, albeit amidst a familiar and fantastic culture of corruption. Extraordinary wealth laid in the hands of very few individuals, who drove, not only the policy of major industries and finance, but, also, politics itself. The laborers of these men came from a number of different backgrounds: black, white, Chinese, European immigrants, as well as women. Despite a laboring “masses,” no longer was human muscle the keystone of production. Rather, steam and electricity dominated, as iron replaced wood, and steel replaced iron. Between 1870 and 1910, due to new farming techniques and agricultural mechanization, the number of Americans who farmed fell by a third. Cities grew and grew up on through to the present day, when 75% of men live in the overcrowded “human habitats.” In the years between 1860 and 1914, New York’s population boomed from 850,000 to 4 million; Chicago’s from 110,000 to 2 million; Philadelphia’s from 650,000 to 1.5 million. (7)
Clearly, despite the unparalleled wealth creation, it was a costly time for workers. For each mile of railroad built, each ton of coal or iron ore mined, thousands of them died, like so many laboring ants at the mercy of child’s play. Abundant were the tricks up the sleeves of the entrenched oligarchy. The Interstate Commerce Act of 1877 was intended to regulate the railroads on behalf of consumers. But, “from a railroad point of view,” one lawyer explained, “the [Act]…is or can be made of great use to the railroads. It satisfies the popular clamor for a government supervision of railroads, at the same time that supervision is almost entirely nominal…” It is this sort of dark brilliance for which Wall Street is known.
The Central Pacific railroad started on the West Coast headed east. $200,000 dollars in bribes to Washington were needed to acquire the nine million acres of free land and $24 million in government bonds. The construction was carried out, over four years, by three thousand Irish and ten thousand Chinese. The wages were one to two dollars a day. The Union Pacific had received, for free, 12 million acres and $27 million in bonds. Both railroads were built along longer, impractical routes, in order to gain subsidies from the towns through which they passed.
The fraud of the railroads meant more control of the railroad finances by bankers. By the 1890’s, the lion’s share of the railroad was concentrated into six large organizations. Four of these were under the partial or full control of the House of Morgan, and two other by the bankers Kuhn, Loeb, and Company. J.P Morgan linked railroads to railroads, the railroads to banks, and the banks to insurance companies, creating an intertwined network under his influence as a distributor of credit. By 1900, he held 100,000 miles of railroad; that is, half of the country’s mileage.
Another baron is John D. Rockefeller. Having started as a bookkeeper in Cleveland, John D. Rockefeller accumulated money while being a merchant, and then bought his first oil refinery in 1862. By 1870, he had started Standard Oil Company of Ohio. His secret agreements with railroads allowed him to ship his oil with rebates and discounts, thusly driving competitors out of business. By 1899, The Standard Oil Company, acting as a holding company, controlled the stock of many firms, with $110 million in capital, and $45 million in profit a year. John D. Rockefeller’s fortune was estimated at $200 million.
It was not and is not an unusual tale, the one in which clever businessmen builds empires by mercilessly defeating competition, keeping prices high and wages low, and using government subsidies. At the turn of the century, American Telephone and Telegraph had a monopoly over the nation’s telephone system, and International harvester made 85 percent of all farm machinery. The banks had interests tied up in many of these monopolies. This created an interwoven network with overlapping, and powerful, corporate directors, each of whom sat on the boards of many corporations other than their own. A Senate report in the early twentieth century revealed that Morgan, at his peak of power, sat on the board of forty-eight different corporations, and Rockefeller thirty-seven corporations.
While the government attempted to appear neutral, its policies greatly benefited the rich, whether it was passing legislation to enable corporations to exist in multiple states at once or in the form of massive land subsidies to few corporations for the railroad. The irrelevance of the fallacious two-party system was made obvious when, in 1877, the Democrats and Republicans arranged to elect Rutherford Hayes. No matter which party was elected, national policy would not change in any significant way.
In 1844, when Grover Cleveland was elected president, he assured industrialists: “No harm shall come to any business interest as the result of administrative policy so long as I am President…a transfer of executive control from one party to another does not mean any serious disturbance in existing conditions.” Despite past subsidies to corporations, Cleveland refused to provide relief to Texas farmers to help them purchase grain during a drought. In the same year, Cleveland used his surplus of gold to pay wealthy bondholders at $28 dollars above the $100 value of each bond, representing a gift of $45 million.
In the United States, political debate of the eighteenth and nineteenth centuries were largely defined by the tariff. Historically, protectionism and free trade have been central to the ways in which we scrutinize possible trade policies. At present, this remains similar, as controversies over NAFTA and GATT have proven. Following the Civil War, the single most lucid issue delineating the Democratic from the Republican Party was the tariff. “The controversy was a maze of rhetoric, greed, and statecraft befogged by myth,” one historian reflects. When we examine the jugular of the issue, the tariff debate turns out to be a clever deterrent from the real issues in the economic nation. Economic nationalism functioned as a smoke screen for divergent class interests, just as it had during the American Revolution.
Underneath the apparent difference of opinion regarding the tariff, their indeed existed a deep consensus: despite the quarreling, both sides by the 1870’s agreed the nation’s economy should be an economy beneficial to elite capital interests. Both sides, moreover, agreed in hyper-industrialization—no matter the cost to workers at that time. Reviewing the debate in the Journal of American History, James L. Huston stated: (8)
“Protectionists lauded property rights as the basis of civilization, urged the lower classes to climb the ladder of success,…and deprecated any attempt of laborers to form unions….The free trade position…was not different from that of the protectionists. They too were stout supporters of capitalism, and they envisaged greater wages for the employee arising from the expansion of business.”
Muckraker journalist Mathew Josephson exposed in a 1938 expose, called The Politicos, “There were coal and iron industrialists on both sides….In the case of Henry Havemeyer of the Sugar Trust, and the Standard Oil men, the practice of making contributions to both parties was…openly reported.”
The spread of education during this period meant the proliferation of literate workers, both skilled and semiskilled. In the middle and late nineteenth century, high schools aided the industrial system. History, for example, was used to encourage patriotism. The educational and political demeanor of the teachers was controlled by loyalty oaths, teacher certification, and the requirement of citizenship. School officials, furthermore, controlled what textbooks were used— not the teachers. It is during this period when the factory like nature of the classroom revealed itself fully. Many commentators of the time noticed how unenthusiastic were the schoolchildren, and stern were the teachers. By 1939, the students would be shepherded in school buses decorated in yellow jackets and black stripes, as if an allegory for their preparation's to be obedient future worker bees.
In U.S history classes—then and now—students learn “consensus history.” We are taught of a “them vs. us” paradigm in which the Democratic and Republican parties have always been, and by assumption always will be, at odds. The role of a relatively few men in the hyper-industrialization of the United States, hailing from finance and industry, demonstrates the deferential nature of historical change and innovation systems development.
Despite the rise of education system designed to stabilize the industrial system as it evolved, large workers movements, which typically interrupted the industrial system, swept the country in the 1880’s and 1890’s, at a time when European immigrants were coming to the country at rates higher than ever. A severe depression, in 1893, caused elites to look overseas to battle the problem of under-consumption at home. A populist movement at the time tried to forge a new and independent culture for the nation's farmers.
The Farmer is a man
The farmer is the man
lives on credit till the fall
with the interest rates so high
it is a wonder he don't die
and the mortgage man's the one who gets it all.
At the height of the 1877 depression, a "farmers alliance" began on a farm in Texas. It took only a few years for it to spread across the state, and by 1886, 100,000 farmers had joined in two thousand suiballiances. They had alternatives to the old way of doing things: join the alliance and form cooperatives; buy things together and get lower prices. In order to keep up with the pace of change, farmers had to borrow money, with the hope the prices of their harvest would stay high.
What they found was rising prices in transporation, for grain, and the price of their produce going down. A poor working-man in Philadelphia wrote a book about the times. A sampling: “It is true that wealth has been greatly increased, and that the average of comfort, leisure and refinement has been raised; but these gains are not general: In them the lowest class do not share.”
Farmers were up against more than the weather, as eastern banks controlled credit; manufacturing monopolies controlled the price of machines; eastern railroad trusts picked freight prices; depression destroyed asset values. But, farmers and city workers alike reached out to one another as a means of forming new political alliances. “We meet in the midst of a nation bourght to the verge of moral, poltical, and material ruin. Corruption dominates the ballot-box, the Legislatures, the Congress, and touches even the ermine of the bench. The people are demoralized and the newspapers largely subsidized or muzzled, public opinion silenced.”
Many of the same dynamics are at work today. On 21 January 2009, the United States Supreme Court ruled in a 5-to-4 split decision “that labor unions and corporations can spend unlimited amounts to influence federal elections, throwing out a ban that had been in effect for 63 years and adding an explosive new element to this year’s midterm elections.” The courts current majority, therefore, sees corporations as “associations of citizens,” and therefore reserves for them the same free-speech rights as individuals. The line of reasoning sees all disseminated information as beneficial to the national debate. The ruling, Citizens United v. Federal Election Commission, No. 08-205, “dismayed lawmakers and public interest groups that fought for decades to limit the influence of wealth special interests in politics.” Those who favored the decision argued that the ban in stood in contraposition to the First Amendment, for it controlled free speech in election campaigns. The decision is destined to have wide scale political and practical consequences on American political ideology, as well as refashioning the way elections are carried out. (9)
According to David Million, a law professor at Washington and Lee University, “a positive way to put [constitutional rights for corporations] is that the economy is booming, American productions is leading the world and the courts want to promote that;” less apologetically, “it’s all about protecting corporate wealth” from taxes and other governmental initiatives. Later opinions worked to expand the rights of corporations, such as a 1928 court decision by which a Pennsylvania tax on transportation corporations was rejected because taxicab drivers were exempt. Corporations are afforded “the same protection and equal laws [as] natural persons.”
Anticipated popular movements and rioting have started. Legal measures have been taken to prosecute the appropriate players: those individuals with the wealth volume and information enough to crash global markets so as to enrich themselves and their cronies. These persons and their corporate associations influence a high enough percentage of the global economy that, in fact, they benefit on the way and way down. They influence the direction of economic society based on an agenda. History is a planned affair. Oftentimes, just as Rockefeller and Morgan of old, they sit on the Board of Director’s of multiple corporations, and intimately work with public servants to forward their agenda. Concerned police chiefs across the United States have recommended citizens arm themselves, for, due to cuts in public services (as a means of reallocated that wealth to private financial institutions), they do not have the resources enough to properly keep the public safe.
The pace of global change today far outpaces anything humanity has seen for the last few centuries, and the direction of this change is only minutely influenced by Democratic or Republican (based in law) traditions. Among the central motifs in the evolution of society, at present, is globalization: that complex of intertwining economic, political, cultural and social processes. It is this tool by which western leaders—the alpha males of the Uber Class—are able to influence the political and social climates in diverse nations across the globe. Influence upon the vector of globalization is, first and foremost, exercised in a top-down manner, whereby elite interests are pursued with scant public input.
When the public does go along with the agenda of technocrats and policy planners—valuable citizens in Richistan—public consensus is contrived through technology, where people tune into fictitious predictive “programming” on the television, false axiomatically newspaper reports, and movies. With the viewer’s guard down, a lifestyle insinuates itself into synaptic connections, priming them for future action in accordance with the desires of the self-declared “masters of the universe.” Despite psychological warfare campaigns on the public, according to a recent poll, four out of five American’s do not trust their government. Still, the program remains the same: crony capitalism is the rule, the power to manage a significantly decreased world population, packed into “human habitats”—overcrowded cities—the goal.
Nothing new here under the sun, and so the consensus history with which we are all indoctrinated implores us to resign: this is the way it’s always been, and, therefore, always will be. We have no agency, for we are objects—human capital—happy with a walk-on part of a background shot from a script we, in the near future, aren’t envisaged to be in.
1.Hutton, Will. Now we know the truth. The financial meltdown wasn’t a mistake—it was a con. Guardian UK, 18 April 2010.
Accessible at: http://www.guardian.co.uk/business/2010/apr/18/goldman-sachs-regulators-civil-charges
2. Robert, Craig Paul. “In Richistan: Fantastic wealth for a few; steady decline for many: The Return of the Robber Barons.” CounterPunch, 2 August 2007.
Accessible at: http://www.counterpunch.org/roberts08022007.html
3. Renehan, Edward. (2005) The Dark Genius of Wall Street. New York: Basic Books
4. Davis, Mike. (1991) City of Quartz
5. Hammerstrom, Doug. (2002) The Hijacking of the Fourteenth Amendment, Reclaim Democracy. Online
6. Bravin, Jess. Sotomayor Issues Challenge to a Century of Corporate Law. Wall Street Journal, 17 September 2009.
Accessed at: http://online.wsj.com/article/SB125314088285517643.html
7. Zinn, Howard. (1980) A People’s History of the United States. London: HarperCollins
8. Frank, Dana. (2003) “Buy American: The Untold Story of Economic Nationalism.” Boston: Beacon Press
9. Kirkpatrick, David. Lobbyists Get Potent Weapon in Campaign Ruling, New York Times, 21 January 2010.
Accessed at: http://www.nytimes.com/2010/01/22/us/politics/22donate.html?fta=y