Recent Items

Banks Win Big as Regulators Refuse to Rein in $700 Trillion Derivatives Market

Posted on by

Paul Jay of the Real News Network interviews William R. Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Originally published at Real News Network.


More at The Real News

Here are Black’s policy recommendations:

JAY: Okay. So you can’t get even measly regulation through. You can’t tame the scorpion. And the scorpion ain’t changing its nature. I guess most people know this little story by now. So you’re talking about let’s get rid of the scorpions. What does that mean?

BLACK: Yeah. So my thing is we’ve got to do three things. And the good news is economically it would make a better economy. The first of the three things is stop the entities that are systemically dangerous from growing. And many of them are growing very substantially.

The second thing is to order them to shrink over the next five years below $50 billion in assets, a point where they’ll no longer pose a systemic risk. And let them figure out how they’re going to do that.

And the third thing that we need to do–admittedly it assumes to some extent the answer–is to have hyperintensive regulation during that time period. Now, I do recognize that I just told you a story about how the Commodity Futures Trading Commission couldn’t even get fairly weak regulation, but that’s why I’m saying where our effort should be as progressives during that period is to be hypervigilant about the regulation.

JAY: So to get to what you’re talking about means a political transformation of the country, ’cause right now the scorpions control the politics.

BLACK: And that’s really my point is that the systemically dangerous institutions, first, they are so large that they are horribly inefficient and risky.

Second, they have this massive implicit federal subsidy that means that any of these, you know, odes you hear to free markets are completely fictional. And conservative scholars agree that there’s absolutely nothing free about the financial markets.

Then you have the fact that they do create these periodic crises that are getting worse. We simply cannot afford to have the next crisis.

And the final thing is the point you were raising. It is impossible to have a real democracy with these kind of systemically dangerous institutions. What you have instead is crony capitalism, and crony capitalism is the death of democracy.

OK. But how?

Print Friendly
Twitter34DiggReddit0StumbleUpon0Facebook44LinkedIn2Google+2bufferEmail

57 comments

  1. ArkansasAngie

    The rule of law.

    And by unelecting both democrats and republicans

    I’ve always been fascinated that unelect isn’t a word.

    You can elect. You can reelect. I want to unelect.

    Throw ALL the bums out

    1. Screwball

      While I agree, the voting population still has way too many who believe in the red team/blue team food fight.

      We’re just screwed.

      1. Banger

        Yes, we are screwed. No scenario exists for going in the direction Mr. Black would like us to go in. The political situation has been completely gamed and it is fairly robust in its structure. We simply have to make do with what we have and try to understand that the problem lies in the culture and thie mainstream media that guides the narrative. People want and need an overall narrative and whether it is true or not is not important to the vast majority of the people.

        The only solution I see is the same one I saw as a very young person and that is to create alternative institutions and decouple from mainstream society to provide an alternative path to the culture of narcissism that provides the underpinning of crony capitalism and eventual corporate feudalism. People cling to the current system even if they think it’s f!cked because they see no other choice.

        In the end most Americans rejected Occupy because it did not advocate building anything solid and orderly. Also, the left has to understand that most people no longer have faith in the federal government: 73 per cent have little confidence and 53 per cent believe the government is a threat to our rights and freedom. It’s not just propaganda for me. My own work as a contractor showed me that the system is broken and cannot be repaired without major surgery–it can certainly limp on for awhile this way but change in a progressive direction is impossible. The best we can count on is that things will just stay the same.

        1. Dave

          Well spake Banger. Decoupling is indeed the most likely path for success but it implies a couple of things. First that we as individuals overcome the myth of individuality as primary purpose (not individuation) and laregly forego what is touted as our right to material comfort and second, this presumed alternative needs must be local, or regional at best which begs questions about infrastructure. Quite a Sisyphean knot if I may mix my metaphors.

        2. Wat

          Mind what Black said about not being able to afford the next crisis. It’s gonna be a doozy. I can only think this is planned, because there are so many things that could be done to prevent it, the feral elite have to know what they are. Same with global warming. All they had to do is let Kyoto and Copenhagen happen the way they should’ve, and we would’ve been on the road toward salvation. Most of the world wants it, but the elite want the disaster. I think that’s their plan to kill us, let GW happen and precipitate war between US, Russia and China (http://www.nakedcapitalism.com/2013/05/russias-plan-for-the-brics-to-dismantle-the-dollar-system.html). They’ll sequester themselves on Mars or wherever with Richard Branson’s space program, and use the Earth and the remaining population as a slave colony for resources. I don’t think it’s going to work out the way they want, but I think that’s the plan. All we can do is prepare personal infrastructure and develop community relationships.

          1. banger

            I’m not so sure about Mars. I don’t think there’ll be a big crisis–the reason for that is that, to put it simply, anything goes in a system based purely on fiat money if and only if there is a general international agreement on the basic parameters of value and I believe that agreement is there informally as I believe most international agreements will be in the future for political reasons. This informal set of arrangements stem from the plunge protection teams made up of sovereign funds, major houses, and international organizations like the WB and IMF who I believe has attacked precious metals and other instruments of value. I could be wrong but that’s the impression I get particularly from the way the Euro-crises was handled. Something is “funny” about the way it played out and how derivatives are being handled.

            At any rate, I think the fix is in and we’re in for a stable period of general austerity for the majority of the population in combination with increased power for the oligarchs/permanent world aristocracy. The “people” will not come even close to revolting since the world media insists that “there is no other option” and as yet alternate media has not taken hold in most of the developed world as the primary source of information–though I think that will change in the next decade at least among the young.

          2. castor

            banger said:

            We have the technology and expertise within the progressive and libertarian communities (it is politically essential that libertarians and progressive work together when they can) that can be an enormous force.

            +1000! Thank you!

        3. Hurm

          “[We need to] create alternative institutions and decouple from mainstream society[.]”

          Some questions from a newcomer: How would this come about, and how would is be successful? What would keep these institutions from playing the role of peasant subsistence farmer to neoliberal “market reforms” and being crushed under boot?

          1. banger

            I’ve outlined this before. The practical method is to form profit or non-profit corporations since those entities are at a competitive advantage in this society. That demands that people work together in some kind of community setting. It could be collectives, co-ops, co-housing communities or actual corporations producing good or acting as unions. For example, IT workers could form cooperatives and bid on jobs and encourage non-predatory businesses to go with them rather than the big consultancies. Or people could form less-formal networks as is gradually beginning to happen–but the thing is these companies and networks must operate from outside the mainstream banking and insurance industries who are nearly all criminal in intent and, often, practice.

            We have the technology and expertise within the progressive and libertarian communities (it is politically essential that libertarians and progressive work together when they can) that can be an enormous force. Rather than each live in separate communities we can start being neighbors and live nearby, share tools, meals, and lot’s of parties.

            We can also follow the lead of labor exchanges, alternative money systems and other somewhat strange ideas that are developing currently in Spain.

            I don’t believe the corporate oligarchs would block this sort of set up. Instead, I think many of them would quit their nasty little jobs and sign on to do something meaningful and much more fun. The left has for so many years been so glum and grim–we need to attract people not by being angry and complaining about the vultures feeding on the American body politic but encourage people to come together to enjoy life–to dance for joy. To those who have had the experience of solidarity that comes, sometimes in crises, it can be intensely joyful to work together with others without dominance/submission being involved. I believe we have the wisdom, at this time, to do something like that.

    2. Casteelk

      That is what they want. They want the voters fighting over the Red and the Blue pills. But unlike the matrix, they are the same color.

    3. Dan Kervick

      We need an organized, grown up progressive social movement that goes beyond the standard electoral processes and machines but does not consist mainly of street protests and “actions”.

      It needs an actual, articulated agenda.

    4. HS

      The answer is surprisingly simple: a Constitutional amendment banning all forms of consideration between federal employees (elected or otherwise) and any member of the private sector, including the revolving door job scam. Then, you equate violation of said amendment with treason. By entirely eliminating the instituion of legalized bribery, otherwise known as campaign contributions, federal representatives will have no choice but to worry about the issues of their constituents again.

  2. vlade

    If by “how?” you mean “how to shrink them”, I agree with Black – make them to figure out how. The regulation is simple – over 50bn in (consolidated) assets will attrack exponentially increasing, and punitive capital charges (without upper limit, starting with 100% for anything over 50bn).

    If you mean how to change the politics – well, first you need to get people to understand that it’s them who has the power, no the politicians. They the people can figure out whether they want a bloody revolution or just voting in someone else. Both had it’s drawbacks and is not guaranted to work, but unless people do believe there’s something they can do, they won’t do.

    1. Banger

      People need a clear vision and clear alternatives and until they see that they aren’t going to participate in advocating change. Here I mean something beyond band-aids. I think people need reformers to come from a deeply philosophical and spiritual place that addresses meaning not just “the economy, stupid.” People want to belong and want to be seen and right now the culture is offering them only the culture of narcissism.

      1. NotTimothyGeithner

        “People need a clear vision and clear alternatives…”

        In 2006, Rahm and Dean were having fights over candidates and money, but without bothering to check, I believe Connecticut, North Carolina, Kentucky, and Indiana provide the perfect example of this. In each of those states, there adjacent Congressional districts with one being Bush +5 and Gore/Kerry +5. Rahm managed to get his DLC henchmen on the ballot in the Gore/Kerry districts, and they all lost in a night where anything with a D next to its name was winning. Dean’s anti-war, pro-choice, and anti-gun candidates won the districts Bush carried in ’00 and ’04. They may not be perfect candidates (they are still Democrats), but when they drew a distinction, people bothered to vote for them.

        Harry Truman’s point about Republicans and Republican-lite will forever ring true.

        1. banger

          That’s the Democratic Party which is ruled by sharks funded by Wall Street and supported by the national security state–this should be obvious. There is no reason to support that party or the two-party system which will ALWAYS work against progressive politics. The great tragedy is that progressive hitched their star to Obama and the Democrats despite the fact they despise progressive goals. This lack of sophistication on the part of the American left has destroyed what little credibility it had.

          We need new political forms.

          1. liberal

            But you can’t really have more than two parties in a first-past-the-post system.

            It sucks, but that’s the way it goes.

            Of course, one can do a lot of _organizing_ outside the party system, but for electoral politics itself, there’s little choice.

          2. NotTimothyGeithner

            We don’t have two political parties. We have two competing teams.

            http://fdlaction.firedoglake.com/2013/05/21/obama-gives-civil-liberty-abuse-a-bipartisan-seal-of-approval/

            The Democrats are the only group which approves of the government spying on the AP. If Bush had done this (he did I’m sure), Democratic followers would be foaming at the mouth. Their motivation is tribal just like the Republicans.

            Although you are right about two parties being the limit in a country with a first past the post system, I don’t think removing that alone would lead to a multiparty state. The primary process and the absence of a deep rift such as Walloon and Flemish doesn’t provide a demand for a third/multi party-system. Even then, there are multiparty states which are multiparty in name only such as France.

          3. dolleymadison

            AMEN. It’s like that book “He’s Just Not That Into You” – the Dems keep answering Obama’s booty call while the banks are the only ones he will get down on one knee for. He will NEVER “put a ring on it” – he will only screw us over and over and then laugh about to his buddies, the banksters.

          4. Wat

            I had a Petition for Election Decorporatization online for a while, which essentially called for publicly funded elections only, no private donations whatsoever, personal, corporate or union. (http://www.change.org/petitions/petition-to-decorporatize-federal-elections). Chomsky, Blum, N. Klein, Greenwald wouldn’t sign; Coleen Rowley signed, that was about it for prominent progressives. I got 460 signatures in several months and then Change.org discontinued it and wouldn’t reopen it. Avaaz, CREDO, none of the others will take it either. All they want to do is harass the banks and corporations on behalf of individual victims to seem like they’re taking action, to provide low risk outlets for their constituencies and suck up the data.

  3. Rebellion

    Which idiom? The traffic cop at the Indy 500. Fox guarding the hen house. Privatization and Democracy. Covington & Burling LLP and Justice.

  4. Banger

    How? By offering people an alternative way to live. Everything about popular culture extols the buccaneer culture of Wall Street. We see that the highest thing we can do is accumulate mass quantities of money, stuff and power. So why are we surprised when we are dominated by psychopaths and sociopaths? First we need to understand that values count for something and ask ourselves if those values the media pushes are the ones we want to live by–from that position we can start building something.

    1. Susan the other

      It’s like capitalists out-marxed Marx when they decided to create “consumer” economies and call it capitalism. There still is common sense somewhere in this pile. The genesis of the Great Depression was war debt; the US government paying down its deficit in the 20s while 3 presidents deregulated to stimulate the economy. It turned into a credit bubble. Nobody ever knows what to do with all that money. And then when this laissez faire wisdom fell flat in 1929 the industrialists took the position that the only way to get out of the depression was to have a high level of consumption. Which did not happen easily and took a war and then a few decades to accomplish. We don’t know what to do with money. We might as well empty our pockets into the trash can. It’s tidier than accumulating all those dollars or buying all that crap in the advertisements. Yes, theoretically demand makes an economy work. But demand for what? We need to make two lists. What we want and what we don’t want. Funny when you go to make a list of the things you want they all have to do with the well being of the people you love.

      1. banger

        Hey, I like your attitude: “well being of the ones you love.”

        I think we are hard-wired for love, for connection. So why do we do what we do? That’s the question we ought to be asking (among others) and look in the mirror while we do that. I think the problem is deeply ideological, as you imply, and has to do with our real values and why we violate those values consistently. I believe it is a result of the fact that the oligarchs class has instituted a mind-control regime and we are living in it without knowing how it works. We think we are making decisions when, in fact, we aren’t. Yes, we are culpable for not valuing virtue, character, love, connection and so on–but we are being pushed by that regime to act contrary to our most profound values.

        1. Antifa

          Very sensible remarks in this thread.

          I’m not Muslim, but have traveled a good bit in Islamic countries, and this thread reminds me of how Muslims in the villages and cities view community — that the valuable things in life are all in what love and gifts you offer to your family and community and what you receive in return.

          It reminded me, when I was there, of some of the poor coal mining communities of the Appalachias, where hardship and going without was routine, but even people without enough pitched in for those with less than they. It was just understood in both places that being human means being part of a larger community.

          Only a brigand goes it alone.

          1. banger

            Great, I’ve had similar experiences in my travels. Today I live in the South where there is a lot more of a community feel. Morris Berman was much criticized for praising the South for still attempting to maintain a human-scale.

      2. dolleymadison

        Yes, but seeing to the well being of those you love takes money. and lots of it, to barely get by. So we slowly sell our souls to buy those things they need – and the time and loss of our souls required to do so destroys the very family we sought to protect in the first place. Instead of “Groundhog Day” every day its the “Gift of the Magi” everyday.

  5. Jim Haygood

    Remember how the AT&T monopoly was busted up in 1984, into seven regional operating companies plus the AT&T long distance business?

    Like the liquid metal in the Terminator movies, those shattered pieces have globbed back together into two giants, Verizon and AT&T. Welcome to the new duopoly!

    Busting up TBTF banks would have the same result. Only by harpooning the head of the hydra — the Federal Reserve bank cartel — can real change occur.

    1. banger

      But how do you get the collective will to pick up the harpoon? I don’t think we are even close to that at this time.

    2. Randall Jeffries

      Poor analogy, in addition to massive layoffs this also introduced deregulation that provided mixed results and bigger profits, various ways for companies to steal money from consumers, and legitimate use of third party communications equipment on the phone companies system. Modems etc. Remember, for many many years this country had the absolutely best phone system in the world, a benevolent monopoly. After the break up, corporations generally remorphed into telecom tyranny. Once upon a time all the corporate dirt bag lawyers claimed that these arrangements were stifling innovation and progress, so we should bust Ma Bell. The looter hoods on Wall Street had a great sociopathic ride buyin and sellin with AT+T. We still take these coke snorting mobsters seriously today, amazing.

  6. Chauncey Gardiner

    Re: …”OK. But how?”

    Very good question, Lambert. And a question of political will being sufficient to overcome the corruption, intimidation and systemic stranglehold of those who control Money.

    A related question I have is whether the recapitalization of the TBTFs through derivatives gains that is in turn flowing down the chain of proximate cause from QE-ZIRP and in-your-face market manipulations are nearing a possible conclusion in terms of their “Management By Objectives”. That might make the political task somewhat easier. It’s hard for me to see how they can logically argue these gigantic off-balance sheet risk exposures outweigh the systemic downside beyond that point. This is a very fragile system, to paraphrase Nicholas Taleb.

  7. Jackrabbit

    People don’t understand systemic risk. And if you try to explain it their eyes glaze over.

    Addressing the problem requires explaining WHAT THE PROBLEM IS in simple terms.

    The best way to do that, I think is this:

    SYSTEMIC FINANCIAL RISK = FINANCIAL POLLUTION

    This is a simple, unifying concept for TBTF, Derivatives, Rating Agencies, Underwriting Standards, CEO compensation, etc.

    1. Carla

      Systemic risk? Heck!

      People don’t understand that more than 97% of what they are told is money is just an accounting entry in a computer.

      People don’t understand that when they put money in a bank, it is no longer their money at all. In actuality, they have just given their money to that bank, in exchange for a promise to pay them back IF the bank hasn’t gambled it all away. Thanks to Cypress, folks are starting to get the drift of that last.

      By and large, people don’t understand, and they don’t want to. It’s too tough just getting from day to day, financing the 1% in the style to which they are accustomed, and as Susan the other said above, worrying about our loved ones.

  8. Norman

    Reading all this, article plus comments, the only workable solution I can see, though it’s unthinkable in practice, is what happened in the book “Executive Orders” by Tom Clancy. One fell swoop, the whole bunch eliminated. Of course, we would have to have that one individual with the guts to do it.

  9. steelhead23

    Love Black, but I have a simpler way to tame the scorpion. Been touting it for years. The FDIC is designed to protect depositors. Large financial institutions have demonstrated an unwillingness to protect their own depositors, relying instead on explicit FDIC guarantees and implicit Fed and Treasury guarantees. That is, we provide them the rope with which they are hanging us. Let’s stop doing that. The first step is to discontinue providing FDIC coverage to deposits in institutions organized to generate a profit. These institutions have eviscerated their internal risk controls in order to juice their profits and they have become so large, we dare not let them fail. Non-profit banking works. For profit banking is dangerous. Regulation would still be needed of course, but I have long found the efforts to regulate banking a bit like an O Henry’s Ransom of Red Chief – in which two kidnappers grab a rich man’s son, who turns out to be a world class brat (Jamie?) and they end up paying the father to take him back. Point being, regulating these guys is harder than it looks. Perhaps if Liz Warren could hire Black to teach an army of regulators, it could be done, but it seems much harder than simply taking the candy jar away.

    1. banger

      What you propose is certainly a promising idea and there are a lot of them around but so what? There’s no chance, based on the current political structure, of any of those ideas that would put a crimp on Wall Street ever being instituted. The question is: how do you change the balance of power? You have to first understand it and then make plans based on that understanding. Wishing and hoping won’t do it.

      1. steelhead23

        Banger, I agree – wishing and hoping won’t do it. However, all movements start as ideas. I would like to let mine percolate a while among the intelligentsia here on NC.

      2. jonboinAR

        No, saying “there is no chance” is false. That’s the root of defeatism. If you believe that, your negativism makes it true, but it wasn’t true until you gave in and waxed negative. There have been successful partial rollbacks of the oligarchy. The great rise of the middle class from the ’40′s to the ’60′s wasn’t merely an historical accident, I don’t think. One major problem is that the “free trade”, “government bad” line that the oligarchy has promoted with great discipline for 40 years has captured the consciousness of many of the common people in the US, so they’re even more passive than they otherwise might be to the stealing away of their way of life.

        It is up to us who believe ourselves somewhat more awake to what’s happening to first devise a compelling narrative, then to promote it vigorously and in a sustained fashion. So far we have not done that.

        1. jonboinAR

          Banger, I see from other posts of yours that you’re not the defeatist my reply made you out to be. My apologies. The general gist I stand by, though. I see too much Eyore-ism, that the system CAN’T be changed. It has been before. I’m at a loss as to where to start, but I don’t take that to mean it can’t be done.

        2. banger

          My pessimism is a result of my own observations of trends going back decades particularly as it applies to the federal government both in domestic and foreign policy.

          I simply see no mechanism (I know Washington very well) where positive change is even remotely possible–it isn’t that Washington is filled with “bad” people it’s that its leadership is dominated by hustlers and fixers more than it ever was and, unlike their predecessors, this cohort has, for the most part, no loyalty to the country. I have neither seen nor read about any way change can occur even if citizens become active–which they’re not because they too know it’s hopeless to try. I wish it were different and if you have a scenario for positive change coming out of the political process I’d like to hear about it.

  10. sierra7

    We ignore history.
    Nothing, and I mean nothing of any moral means in our past has been achieved without wholesale resistance to the staus quo.
    At the present, IMHO, we still have lots of social additives that are still propping up our consumer society; unemployment insurance for millions who have not run that course, and other safety net features that are still functional if not nationally, at state and local levels such as food banks, etc.
    We have not yet reached a point of “desperation”.
    History is saturated with episodes that tell us that not until that desperation point is reached will the general public come to the realization that change is not only necessary but imperative.
    Ah, but what comes after?
    What should come after is reflected in the why of the present (or future) collective actions taken for change.
    Almost always (with exceptions)that collective action will take a local form….and grow.
    We can probably all agree with the notion that our government is thoroughly corrupt with money flowing into the coffers of the controlling congressional elites to sustain those who benefit most from this crony capitalist economy.
    The government is supposed to be, “the people”….well, then it is up to the people to change this system.
    Millions marched in 2003 in resistance to the horrible invasion of a sovereign country, Iraq….did it change anything?
    No.
    So, what can change “things”?
    Marching, plus outright resistance…to the militarily occuppied local police forces until those forces are forced to use more violent methods to quell the ordinary folks that blevieve we need forceful change.
    That will certainly lead to change. But, what comes after?
    Do we presently have budding ideas, institutions, etc. to reinforce those actions in the streets?
    I would say, yes.
    But, they are still not large enough or vocal enough (confronting the major media control) to really make a difference.
    I think we can all agree that our economic system is really not working as it should….and with globalization circumstances have only worsened and we really have a global spread of poverty instead of a global spread of affluance. Globalization has excacerbated all the inequalities that existed by accelerating the race to the bottom.
    In 2008-09 this government had a chance to modify the system; break up the TBTF insitutions, readdress the horrible decisions on derivative regulation, reinstate at least the spirit of Glass-Steagal….etc.
    Because of the makeup of this incoming administration it was perfectly clear to this commenter that nothing would change and we would pursue a “save the top”, to helping those who were in the process of being literally economically crushed.
    Our political system has failed the common folk in this country and many other countries have followed suit….witness the over burdening theory of, “….austerity will save us all”.
    Absurd.
    From resistance against the privatisation of the Commons, through all the subsequent centuries, the common folk have had to struggle.
    To believe that this is any different is nonsense.
    Nothing comes easy to the common folk.
    Struggle is the name of the game.
    Are you ready or not?

    1. banger

      Indeed you are mainly right in all you say–excellent comment. I think many if not most of us agree that the current regime is hopelessly corrupt and that the whole Obama operation was just that a con operation meant to defang a momentarily resurgent left. We wanted hope and we got fraud.

      The system will limp along, as you say, for a few more years and maybe we’ll have continued palid growth in the economy. But this is the time for us to start forming something new. As I’ve said many times we need to grasp that the mainstream narrative and the mind-control regime is the main thing that keeps people from adopting any of the excellent solutions out there to our collective problems. We live in an age of abundance in every sense of the word and yet the oligarchs have been able to create a world of struggle and stress. How do they do it? This is what we ought to be talking about. We need to deconstruct the mainstream media narrative that says 24/7 that there is no other way than the neo-liberal agenda. Thinking about schemes to regulate the corporate sector simply won’t work if the corporate sector can buy off regulators or snow them with armies of lawyers and PR mind-control experts who can, at the drop of a hat, astro-turf any issue, hire platoons of bloggers to spread disinformation and misdirection.

  11. MaroonBulldog

    “…crony capitalism is the death of democracy.” Yes, and it’s the death of capitalism, too. Basically, crony capitalism is fraud.

  12. Jim

    Banger at 10:43am said “We need new political forms”

    Once many individuals on the American left tasted the narcotic of institutional power in the organs of Big State, Big Capital or Big Bank or the intellectual euthanasia of tenure all hope for alternative political visions, from this segment of the population, seem to have gone out the window.

    But we do, indeed, still need new political forms and we must think our way through, for example, a political structure that might make possible a more direct democracy.

    Is a more direct democracy possible without the displacement of the nation-state?

    Would a true federation guaranteeing the sovereignty of the federating units help to ensure a more direct democracy?

    Would a true federation reinvigorate presently superficial concepts of culture and community?

    What would it mean to reconfigure basic political units along genuine federalist or confederalist lines?

    Does the present social formation of experts, professionals, and public and private sector bureaucrats function the same way for the Democrats and Big State as do the top CEOs for Republicans and Big Capital and could their collective powers be undercut by a move towards a more participatory and genuine federation (which might unite portions of the left with portions of the right) fighting for a new federated political form?

  13. Hugh

    Ok, but how?

    Revolution. The next question is what kind of. If we do nothing, things will explode. There will be chaos, great suffering and death, and likely something as bad or worse than what we have now. Reforms, such as those Bill Black suggests, are impossible because the system is corrupt. Our elites are corrupt. The rich are corrupt. In such an environment, reforms go nowhere or simply become excuses for more corruption.

    As I have written many times before, we need to create a broad social movement that speaks to all Americans about the kind of society we want for ourselves and each other. It must have a program which is simple, inclusive, and compelling. This program must express both what we are for and what we are against as a society. And we all must commit to that program. Once we do this we take over the political process. No compromises with the current powers that be, with the elites or the rich.

    They will resort to provocation and violence, but then their current corruption and looting are only accomplished by great violence. Ask the tens of millions who are in debt, out of work, or lost their homes. Ask the families of the tens of thousands who die each year because of poor or no access to healthcare. But the truth is the rich and the elites are only powerful because we allow them to be. Without us, their power is nothing. We are the country. They can not exist without us, but we can and must exist without them.

    1. Jackrabbit

      Revolution implies changing the prevailing order. Banger, I think, is saying that that is really not possible. Instead, those who are willing need to build alternatives in parallel.

      I imagine that is something like the Amish. Living by their principals in a society that has values that are hostile to their own.

      I’m not sure exactly what you mean by “Broad Social Movement” but in the context of “Revolution” that seems to refer to something like the sixty’s social movement(s). Such movements in the sixty’s had some advantages like a large number of young baby boomers from across the social spectrum that were dissatisfied/disaffected with the draft.

      The kind of social movement that Banger is suggesting, I think, would be parallel and the dissatisfied/disaffected/discouraged would “fall sideways” into a movement that opens their eyes to an alternative that is more caring/supportive/genuine.

      Over time, I think, the alternative would grow to the “broad social movement” that you envision but with less conflict. And the more it grows, the more damning it is to the establishment (getting more press and more converts that are not desperate for change).

      I wonder if there is not already a set of alternative services/social models that already exist that could be pulled together into a core. For example, there is already Democracy Now and The Real News Network, food coops, various spiritual and environmental groups, etc.

      1. Hugh

        We do not have the time for organic parallel movements. We have about 5-15 years to deal with kleptocracy, wealth inequality, and the class war before the problems of overpopulation, climate change, peak oil, resource depletion, environmental degradation overwhelm us and the planet.

        Nor is there any reason to believe that kleptocrats would spare such enterprises from looting if they found anything to loot in them. Nor is it likely that the elites would ignore them if they saw them offering any real alternative to kleptocracy.

        When I say a broad social movement, I am talking about a new social agreement or compact, one that calls on all to participate and all to commit to a society that delivers (not just promises some form of false equal opportunity for) to all the building blocks for a fair, decent, and equitable society, and then lets us pursue our lives with respect and privacy. Such a society, I think, must be based on a good and meaningful work paying a living wage for all who want it, good housing, healthcare, education, and retirements, and do so in a sustainable way. Such a society would encourage and reward initiative but discourage great fortunes as the thefts from society that they are.

        The broad social movement I envision would listen to and include white males because without this group no movement is going anywhere. As Lincoln said, we need to pay attention to the better angels of our nature. People want good and meaningful lives. They want something to believe in, to be part of, that is bigger than themselves. This is where the real strength and cohesiveness of this movement would come from. The looting rich and elites have nothing to compete with this. They can lie, cheat, distract, confuse, but they can not offer meaning. They can not offer hope. As Obama so eloquently showed, they can only betray it.

        1. Jackrabbit

          While I understand the urgency, I find it difficult to see significant public participation. That takes money, media, and leaders willing to step up and confront authority.

          The reaction of the public to OWS is a case in point. Yeah, there’s disatisfaction, but not nearly enough for any kind of uprising.

          The parallel movement is more realistic because it allows people to participate as they are ready. If the problems are as severe as you (and I ) think then this movement will be viral and accelerates to critical mass quickly.

          Initially, participants would likely be people whose eyes have been opened by hardship or enlightenment. People that see value in community, spirituality, and wish to build something more meaningful (as you point out) than the consumerist, self-centered mainstream culture.

          Attempting to spark a movement that directly confronts TPTB is a tricky proposition. Too early and ou risk alienating people, and being marginalized – then routed – like OWS. Too late and you have to compete with hopium of government programs and a government that is, perhaps, more quick to crack down (becasue they are fearing the people more and more).

          There are already hundreds (maybe thousands) of small alternative communities and cooperatives. You hear about them from time to time. It is much easier, I think, to list out what their common features – what make these distributed communities viable? – and set up some principles for them to work together. Ratify it at a gathering, and now you have a viable “movement”. Maybe its just 1 million people – but its a solid start.

          Now offer membership/help to those want to join and groups that want to establish their own local ‘chapter’ (for lack of a better word). And make sure you get some media attention as you grow.

          ===

          Anyway, that’s one possibility, just off the top of my head. I’m not claiming to have all the answers.

          1. Jackrabbit

            Note: Up-thread Banger actually describes *his* vision of an alternative social movement. (Have a look!)

            He wants to create lots more community/communal social orgs like coops, unions, co-habitation, etc. But I haven’t seen him discussing using what is already there (except as models for more of the same) or how they could be associated and the use of the media to attract more people to such efforts.

          2. Hugh

            One does not hit the ruling kleptocratic class where they are strong: money, traditional media, the political institutions and parties they control, but where they are weak: legitimacy and lack of vision and where we can be strongest: organizing, message, and educating.

            What banger describes might engage a few hundred thousand to a few million individuals. I am talking about a movement between one hundred and one hundred and fifty million. The scales are not comparable.

  14. EmilianoZ

    The guy wears a T-shirt to speak on TV. LOL! All the guys on the other side wear thousand dollar Armani suits. We don’t stand a chance.

  15. Skeptic

    May I say we need to deal with the devil to breakup the big 5. We can whine, and moan, but like immigration law, the only solution is to recruit the Libertarians of GOP. Otherwise, mo of the same.

  16. Thomas McGovern

    While Mr. Black’s suggestions may make sense, the chances of them being implemented are about nil. Few people understand derivatives and the risk they pose, although some people have a hazy idea that derivatives were a part of the financial crash of 2008. Without widespread awareness, the banksters will prevail.

    The OCC produces a quarterly derivatives report and you can get a copy here: http://www.occ.gov/topics/capital-markets/financial-markets/trading/derivatives/dq412.pdf. In it, you will find that Notional derivatives were $223 trillion in the fourth quarter of 2012. Comparing this to the national GDP in 2012 of $15.7 trillion gives a sense of the risk involved. Why not send a copy to family and friends and highlight the important data? The ignorant masses need to be educated before they will understand what the banksters have done, and are doing, to them.

Comments are closed.