By Matt Stoller, the former Senior Policy Advisor to Rep. Alan Grayson and a fellow at the Roosevelt Institute. You can reach him at stoller (at) gmail.com or follow him on Twitter at @matthewstoller. Cross posted from New Deal 2.0.
Sometimes finance executives let slip the way they really feel: that they hold the world in the palm of their hands.
It’s not often that the people in charge admit what is really going on: a global game for political dominance. I just saw an interview with Wall Street superlawyer Rodgin (“Rodge”) Cohen of Sullivan & Cromwell, the secret force behind (among other things) the expanded emergency lending power of the Federal Reserve through section 13(3). You know, that’s the law allowing the Fed to lend unlimited sums based on whatever it wants to lend, a section amended in 1991 at Cohen’s behest. He was involved in “more than 17 deals” during the crisis in 2008, including the bankruptcy of Lehman Brothers, the $85 billion AIG bailout deal, and the takeover of Fannie Mae by the federal government. He is, as Bill Black said, the fixer of Wall Street. Here’s his quote, at minute 3:39 of this Bloomberg interview:
Hopefully we will not see the major financial institutions in this country disappear because if we do we will also see a loss of ability to influence events not only financially but also politically throughout the world.
That’s pretty clear. It reminds me of this quote from an anonymous military officer while he was touring JP Morgan’s trading floor (emphasis added):
JPMorgan Chase yesterday hosted about 30 active duty military officers (across all branches and agencies) from the Marine Corps War College in Quantico, Va. The officers met with senior executives, toured the trading floor and participated in a trading simulation. They discussed recruitment, operations management, strategic communications and the economy. Aside from employees thanking them for their service as they passed by, they also received a standing ovation on the trading floor. Said one officer after a senior JPM exec thanked him for his service: “We promise to keep you safe if you keep this country strong.”
There are always conspiracy theories out there about a global linkage between large financial institutions and American empire. They don’t, however, usually come from the people running the place.
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“conspiracy theories out there about a global linkage between large financial institutions and American empire”
What conspiracies?
Cohen: “Hopefully we will not see the major financial institutions in this country disappear because if we do we will also see a loss of ability to influence events not only financially but also politically throughout the world.”
Note the carefully chosen preposition, “throughout”. I.e, within the U. S. as well as outside it.
Geithner’s first post-grad employment was with Kissinger, so he no doubt got many lessons on American power and how to maintain it. Stuff the little people don’t need to know about.
“There are always conspiracy theories out there about a global linkage between large financial institutions and American empire. They don’t, however, usually come from the people running the place.”
Yeah, add me to the list, too:
What effin conspiracies?
I mean, you’d really have to have your head somewhere to not see the “linkages” between the huge financial institutions and America’s foreign policy.
Why even throw the word “conspiracy” in there at all?
After what went on in during the financial crisis? what’s going on in the EU?
Just call a spade a spade and be done with it.
It moves the conversation forward and a huge weight will be lifted off your chest once you admit the truth to yourself.
The US is an aggressively fascist empire that seeks to subjugate other nations either financially or – if that fails – militarily.
End of story.
No conspiracy theory needed.
..as for DOCUMENTATION of;
Wiliam Blum’s CIA historical expose’, complete with 200 pages of footnoted references=”Killing Hope”..(includes “The Jaeckels”)
Perkins’ “Confessions of An Economic Hit Man”
I think Matt may have been saying that people who speak of these links and attitudes are then easily dismissed as conspiracy mongers.
When I impolitely bring up things like this, and predictably am called a conspiracy nut, my response is to say that’s it not conspiracy, but consensus: ruling class consensus conducted for the most part privately, but still with many public expressions, intentional or not, of its true nature.
This post is a report of another one of those inadvertent admissions, and a clear view into the habits of mind and assumptions of the actors.
Financial power alone won’t do it. Without manufacturing, including high tech, we are going down. I don’t care what Cohen says.
If you believe that the Masters of the Universe really are the masters of the universe, or at least of the world, why not assume they’ve taken that into account?
Perhaps an ancillary goal of the degradation of regulations and social welfare in the United States is to lower the cost of labor, allowing a certain level of manufacturing to regrow. That’s what I would do if were committed to US hegemony. Industry is empire.
Of course I don’t think our modern elites are that smart, and if they are, they’re not nearly that patriotic.
actually, “financial sector”=Wall $treet amounted to 19% of U.S. economy, 2001,
now, 41%…paper debt pushers…
Our elites are a lot smarter than you. Whether they’re smart enough is anyone’s guess. We now have a permanent underclass constituting the bottom 20-30% of the population. It’s the same everywhere. Globalization, technological advance, and environmental degredation will only worsen the problem. It’s a virtual certainty democracy will not survive. So what will?
I doubt that his ‘we’ is your/my ‘we’, overpopover. He figures he’ll be doing fine whether or not you and I are along for the ride.
You got it…but so many others didn’t.
Planning Armageddon
British Economic Warfare and the First World War
By Nicholas Lambert
Before the First World War, the British Admiralty conceived a plan to win rapid victory in the event of war with Germany—economic warfare on an unprecedented scale. This secret strategy called for the state to exploit Britain’s effective monopolies in banking, communications, and shipping—the essential infrastructure underpinning global trade—to create a controlled implosion of the world economic system.
In this revisionist account, Nicholas Lambert shows in lively detail how naval planners persuaded the British political leadership that systematic disruption of the global economy could bring about German military paralysis. After the outbreak of hostilities, the government shied away from full implementation upon realizing the extent of likely collateral damage—political, social, economic, and diplomatic—to both Britain and neutral countries. Woodrow Wilson in particular bristled at British restrictions on trade. A new, less disruptive approach to economic coercion was hastily improvised. The result was the blockade, ostensibly intended to starve Germany. It proved largely ineffective because of the massive political influence of economic interests on national ambitions and the continued interdependencies of all countries upon the smooth functioning of the global trading system.
Lambert’s interpretation entirely overturns the conventional understanding of British strategy in the early part of the First World War and underscores the importance in any analysis of strategic policy of understanding Clausewitz’s “political conditions of war.”
Review:
This massive, comprehensively researched work asserts Britain’s attempt to solve a strategic problem by economics. A plan to destroy the German economy in the initial stage of World War I was modified only when its initial implementation threatened a global financial panic. Lambert’s controversial and persuasive description of a British counterpart to the Schlieffen Plan, challenging a century’s conventional wisdom, is a page turner.”—Dennis Showalter, Colorado College
..it’s just Milton Friedman-“Chicago Boys” in Chile’, CIA having assassinated Alliende’ on 911, 1973…(for Anaconda Copper).
the sociopath often is a success
appears brilliant at times and/or in a narrow range of activity
but they usually overplay their hands
the will to power
More about that conspiracy:
http://wikileaks.org/the-gifiles.html
Most people hear will want to read this release.
Jill,
excellent link-THANKS!
Honestly, you really could replace “conspiracy” with “consensus” There truly is a near universal understanding among Americans of every background that we are all being greievously abused by a system that rewards the most dangerous sociopaths that are walking among us. The architects of this nation’s economic policy truly are sociopathic inasmuch as they apparently have no regard for the long term and wider impact of their actions……
Matt,
I was being ironic! Sorry that didn’t come off very well in my post. The only thing we disagree about is the whole “near universal understanding…” The level of propaganda in our nation is amazing. It is effective because people do not often have the time to research actual information and it’s very hard to find things out, even when you have time. Then there’s self delusion.
However, the wiki leaks shows clearly (one group) who is running things and helps us understand some of these people’s methods along with their state of mind (which is most unwell!).
Oh? Tell me what system doesn’t reward such people who are more clearly and honestly described as the strong, the smart, the tough, the clever. Calling them psychopaths reveals you to be just another whiney loser.
In the book of Job, one of Job’s friends says: when we are gone, wisdom will vanish. Mr. Cohen continues a long tradition of arrogance and dominance.
Next time when you vote for candidates or presidents don’t vote for slaves to the banks.
“There are always conspiracy theories out there about a global linkage between large financial institutions and American empire. They don’t, however, usually come from the people running the place.”
Yeah, usually they come from you, Stoller— and I quote:
“On to Woodrow Wilson. Wilson signed the highly controversial Federal Reserve Act in 1913; originally, the Federal Reserve system was supposed to discount commercial and agricultural paper. Government bonds were not really considered part of the system’s mandate. But what happened the next year? Yes, World War I. And Wilson, who ran on the slogan “he kept us out of war” in 1916, started a long tradition of antiwar Democratic Presidents who took America to war (drawing the ire of among others Helen Keller, but garnering the support of union leader Sam Gompers who argued it was a “people’s war”). Wilson also implemented a wide variety of highly repressive authoritarian measures, including the Palmer Raids, the Espionage Act of 1917, and the use of modern PR techniques by government agencies. For good measure, Wilson was an unreconstructed white supremacist (even a bit out there for the time) and sent many antiwar opponents to jail.
In the monetary arena, Wilson’s new Federal Reserve system began discounting government bonds. Like Lincoln, he had set up a tremendous war financing vehicle to centralize capital flows and therefore, political authority. In many ways, Wilson set up the rudiments of America’s police state, and did so arguably to help a transatlantic Anglo-American banking elite. Here, one can argue that libertarians are wary of centralized financing and political authority for liberal reasons – the ACLU was founded after the Palmer raids.
And finally, we come to Franklin Delano Roosevelt. Roosevelt’s Fed is a bit more complex, because he did centralize monetary authority using wartime emergency powers, but he did so in peacetime. FDR abrogated gold clause contracts, seized the domestic supply of gold, and devalued the currency. He constrained banks with aggressive regulation and seizures of insolvent banks, saving depositors with the Reconstruction Finance Corporation. He also used the RFC to set up much of what we know today as the Federal government, including early versions of disaster relief, small business lending, massive bridge and railroad building, the FHA, Fannie Mae, and state and local aid. Eventually, the government used this mechanism to finance college and housing for veterans with the GI Bill. Since veterans were much of the population right after World War II, effectively this was the first ever near-national safety net. FDR also fused the liberal and union establishments with the corporate world, creating the hybrid “military-industrial” complex that is with us to this day (see Alan Brinkley’s “End of Reform” for a good treatment of this process).
Later, this New Deal financing apparatus was used to finance the munitions industry and America’s role in World War II. At one point, the RFC owned eight war material producing subsidiaries, including the synthetic rubber industry. Importantly, FDR had the Fed working for him. The Fed kept interest rates pegged at an interest rate set by Treasury, and used reserve requirements to manage inflation. This led to a dramatic drop in inequality, and unemployment sank to 1% during World War II. In 1951, the Fed, buttressed by what Tom Ferguson calls “conservative Keynesian” corporate leaders, broke free of this arrangement, under the Treasury-Fed Accord, leading to the postwar monetary order. That accord is where the vaunted “Federal Reserve Independence” came from…
Modern liberalism is a mixture of two elements. One is a support of Federal power – what came out of the late 1930s, World War II, and the civil rights era where a social safety net and warfare were financed by Wall Street, the Federal Reserve and the RFC, and human rights were enforced by a Federal government, unions, and a cadre of corporate, journalistic and technocratic experts (and cheap oil made the whole system run.) America mobilized militarily for national priorities, be they war-like or social in nature. And two, it originates from the anti-war sentiment of the Vietnam era, with its distrust of centralized authority mobilizing national resources for what were perceived to be immoral priorities.
When you throw in the recent financial crisis, the corruption of big finance, the increasing militarization of society, Iraq and Afghanistan, and the collapse of the moral authority of the technocrats, you have a big problem.Liberalism doesn’t really exist much within the Democratic Party so much anymore, but it also has a profound challenge insofar as the rudiments of liberalism going back to the 1930s don’t work…
Liberals must grapple with big finance and war, two topics that are difficult to handle in any but a glib manner that separates us from our actual traditional and problematic affinity for both. War financing has a specific tradition in American culture, but there is no guarantee war financing must continue the way it has. And there’s no reason to assume that centralized power will act in a more just manner these days, that we will see continuity with the historical experience of the New Deal and Civil Rights Era. The liberal alliance with the mechanics of mass mobilizing warfare, which should be pretty obvious when seen in this light, is deep-rooted.
What we’re seeing on the left is this conflict played out, whether it is big slow centralized unions supporting problematic policies, protest movements that cannot be institutionalized in any useful structure, or a completely hollow liberal intellectual apparatus arguing for increasing the power of corporations through the Federal government to enact their agenda.”
http://www.nakedcapitalism.com/2011/12/matt-stoller-why-ron-paul-challenges-liberals.html
Do you really think you’ve convinced anyone? Did you marshall one iota of evidence? All you’ve done is say what Stoller has written offends your tender sensibilities. Why don’t you start by Googling Creel Commission, just to begin with Wilson? We then might have an informed discussion.
I fail to find a connection between “Creel” and “liberal”.
Stoller is misrepresenting the history of a corrupt Democratic Party as being relevant for the discussion of liberalism. Neither the sections the original poster emphasized, nor your response further his case. I am all in favor of a detailed history of a corrupt Demoractic party – especially from pretend-reformed insider – and I appreciate the against-the-hagiogrpahy observations about FDR in particular. But I do not see Matt Stoller acting in good faith on this.
Just to pick one example, I find it impossible to reconcile Eisenhower’s definition with this: ‘FDR also fused the liberal and union establishments with the corporate world, creating the hybrid “military-industrial” complex that is with us to this day’. The military-industrial complex is a fusion of elected representatives of all parties and the instutitions they are entrusted with, with industries that manufacture armaments, by means of, and for the purpose of, converting tax revenue into defense spending into political campaign contributions – a self-reinforcing loop, a self-licking ice-cream cone that is politically unassailable as it offers ever increasing “security”. Similar self-reinforcing feedback loops can be found in health related industries. Since 9/11, the National Surveillance State – decidedly not unionized – has become a rapidly growing branch of the original poision tree.
Co-opting unions might be, or might have been, a part of this, but it is hard to see how “liberal and union establishments” factor into this, unless of course we redefine them to be synonymous with the Democratic party. I have no doubt that many valuable points can be made – even by Stoller – about the corruption of the unions past and present, just as valuable points can be made about the corruption of the Roosevelt institute. But I remain skeptical that this is the right messenger, and I find the message to be ever so subtely off key, aliasing entire philosophies with one tired Grand Old Democratic Party. Liberalism is not to blame for Roosevelt, or Obama, or, for that matter, Stoller. Liberals, of course, or those that profess themselves to be “liberal”, have to take plenty of blame by virtue of past and future votes.
I quoted it because I agreed with Stoller when he ran it the first time– and offended everyone’s tender sensibilities by mentioning Ron Paul.
Which means his main point never even got discussed.
But the assumption that he offended my tender sensibilities does underline his original point that liberals are challenged by RP because of their own internal contradictions, which they can’t even face let alone deal with.
In fact, I’m certain one of my comments to that post indicated that modern monetary policy is the only thing that is enabling the US terror state– but some people clearly don’t want to even have to think about that.
The decision to go for Empire was made before WWII started. The cognitive and moral dissonance, at times driven to schizoid levels, of the reality of that fundamental Faustian bargain has eluded not just “liberals”, but the public broadly, to this day.
The fact is that the Liberalism of the 1930s did work. For awhile. And then we tore it down. The tearing down was called de-regulation. Introducing special privileges for minority segments of the population (tax loopholes, capital gains tax for letting money accumulate, etc).
Name a financial crisis as severe as this one since 1932? The 1970s? Not even close and Paul Volcker tamed that by raising interest rates sky high (thank Jimmy Carter for nominating Paul).
Liberalism os one of common wealth. Sharing in times of need. Getting together to achieve objectives as a nation. Contrasted with today’s dog-eat-dog America that has been culturally reinforced ever since Reagan took office when Greed became Good.
Liberalism is not a Democratic nor a Republican Party platform. Liberalism is not sacrificing oneself for the common good. It is cooperation in order that all may achieve. In Liberalism, all still make money. All still buy and own property, etc.
Your post is so full of B.S. that, if it were compared to famous historical battles, you would be Darius III and the person ripping apart your misinformation would be Alexander the Great.
You have taken facts and derived an almost wholly fanciful new meaning from them. Where they are merely coincidence or convenience – the conspiracy of convenience in which there is no conspiracy. Also called ‘taking advantage of an unrelated opportunity’. I see something I can take advantage of, I will do it. Others, later, may come along and look at that and say, “Conspiracy.” Where there is none.
Well, if they can’t protect their own house (pentagon) and the twin towers, not sure how they are going to protect you and me.
Well, who knows–that deal may be off now anyways:
“they also received a standing ovation on the trading floor. Said one officer after a senior JPM exec thanked him for his service: “We promise to keep you safe if you keep this country strong.””
egggsaaactly!
But it’s such a little word, this if, that most of the time people just skip right over it.
what makes you think they intended to?…have you seen video of Pentagon=original hole, before facade fell was too small to be hit by the plane
they attempt to paint…also, towers fell supposedly due to heat-fuel, yet at Pentagon a wooden stool with open leaf paper book sitting on is clearly visible
at point of impact. All 5 cameras from facade of Pentagon were confiscated, as was the one on convenience store across the street…
Read Paul Thompson’s, “The Terror Timeline” for definitive info-Thompson was information gatherer whom “families of 911 victims” went to, to generate 911 Commission hearing. Kissinger was supposed to run 911 Commission, but was
allowed to be questioned by families prior, who asked him questions he didn’t wish to answer…so he declined. Subsequent head of 911 Commission holds both U.S. and Israeli citizenship..
See why I like common stock as private money? It would euthanasize the arrogant usury and counterfeiting class. We need them like we need a hole in the head.
I think John Perkins “Confessions of an Economic Hitman” is another glimpse into this world, but what do I know, I’m just a blue coller worker pushing boxes in a warehouse.
rj,
You’re accurate….I listed it also, above.
They don’t, however, usually come from the people running the place.
Ha, ha, ha. You ARE kidding, right ?
Probably the most famous case is that of Mr I was a gangster for capitalism, Smedly Butler.