Tom Ferguson Saw the Disheartening Future of American Politics 25 Years Ago

Nathan Tankus found this archival video (you are going to get a gas out of the production values…and be patient with the set up, it takes a few minutes for the video to get going).

As strange as it may seem, analyzing politics in terms of money was a radical idea in political science 25 years ago. But if you simply followed the money, it was actually remarkably easy to see the direction in which American politics were destined to go. Notice, for instance, that he points out how dependent Democratic party funding was on investment bankers and real estate….in 1988…and what that meant for party strategy. (An interesting bit is also how the role Japan played is not that different than the one now played by China, except back in the 1980s there was public concern about Japan, and now there is pretty much zip re China).

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  1. nonclassical

    This ’78 poli-sci guy was informed by profs, by 2000 80% of U.S. profit$ would be generated by fewer than 100 corporations…guess how many now…?

    1. Yves Smith Post author

      First, you got the year wrong.

      Second, as you point out, he was quoting other “experts” on that. I told you to listen to his own prognostications. I’m sure you noticed he didn’t get the imminent collapse of the Soviet Union either, along with pretty much everyone in the US and Europe, including our CIA who is paid to get stuff like that right.

      Third, you should know that the rule of economic forecasting is “If you must forecast, forecast often” because economic forecasting is about as accurate as calling a coin toss.

      Finally, if you rank companies BY PROFITS, that number is probably not as far off as you suggest. Everything in life is 80/20. Corporate profits peaked 1Q 2012. I’m having trouble getting lists that cover the same time frames, but the list of public company profits I came across. The top ten on the list take you to about $200 billion. These are PUBLIC companies only. About half the big companies in America are private. Most are PE owned (which means levered so they don’t show much in the way of profits) but some are ginormous and very profitable (in particular Koch Industries and Cargill, plus some major real estate developers/investors). Total corporate profits appear to have been about $1.5 trillion gross, or $1.3 trillion net (the Fortune #s are net profit). I’d guesstimate that the next 80 on the list had 2X cumulatively as much in profits at the top 10 (another $400 billion) and the biggest private companies (say 10 among them) might add as much as $100 billion (you can assume at least $50 billion). So you probably have half of all corporate profits in the 100 most profitable, perhaps as much as 60%.

      The point of watching the piece was to see how many of the bad trends that have come to dominate American politics now were visible then and yet largely ignored. If you want to find someone with a 100% perfect crystal ball, join a cult.

      1. nonclassical

        ..sorry Yves…when I referenced THIS ’78 poly-sci guy, I was referring to myself..
        at University of Washington…SDS and all…

        1. rotter

          “yes mistress”..{{{sniffs the glove}}}…but seriously, i get your comment. It was about the current state of coporate ownership of the govt.Got it. You have to be careful the way frame your comment. Some people dont get irony and its many uses.

  2. Alex

    That was an interesting video, especially the part about the Jackson primary campaign. The impression I got from Tom Ferguson was that Jackson apparently ran a pretty populist campaign (at least by the standards of the time, perhaps even now), and that as soon as he got momentum, the media decided to sink him. I also found it interesting that, in 1988, even with racial prejudices being quite a bit greater than now (check gallop, pew for the data), Jackson was apparently able to draw a large cross of the Democratic primary electorate (save for the Israeli-Palestinian conflict, which is still the untouchable political issue) based on liberal appeals for controlling defense spending, and preserving the welfare state (or rather its remenants). Great stuff.

    1. Klassy!

      Yes, whatever your feelings about the man now, it cannot be denied that his campaign platform was pretty great. That was my first presidential primary and I enthusiastically voted for him.
      I know a few people who are always ready to describe Obama detractors as “racist” who would never have voted for Jackson. He wasn’t “one of us”.
      At about minute 44 Ferguson describes the media campaign against Jackson by “liberal media”. Same old shit.

  3. CB

    Somewhere on my bookshelves is a book by Hedrick Smith that prepped me for the times I’ve lived thru. No surprises, really, and I’m sorry to say.

        1. ojcr

          not to be snippy, but we’ve always lived in a state where the top 0.1% drove the bus and everyone else was essentially along for the ride—-it’s only in the last 100 years or so that people have awakened to that fact.

          at the very least today, you don’t have a national draft where tens of thousands of men die for wars driven by the economic interests (Mexican War, Civil War, Span-Am War, War of 1812, WWI) of the elites—-not that sending volunteers to die is much better.

          1. Jimmy Da Brain

            No draft? Hmmm… I disagree. The draft is just covert now. People in abject poverty have very few options aside from joining the military.

  4. JTFaraday

    I used to think that the ordinary buying and selling of “money in politics” was the big problem. Now I see that the ordinary buying and selling of “money in politics” is coupled with the fact that the banks and the Treasury Department are effectively one and the same entity.

    This means there is no longer a “government” there, as such. The government as liberals, both classical liberals and the bureaucratic liberals of the 20th century, used to know it is pretty much nonexistent. A utopian “nowhere.”

    People cite Simon Johnson’s “the Quiet Coup,” but almost no one has really allowed that to filter through their brains, understood what it means, and altered their political analysis accordingly.

    When bureaucratic liberals defend “the government” today, “the Quiet Coup” is what they defend. They’re going to have to start drawing a distinction between their theoretical government and the “actually existing government” the way socialists of the 20th century had to draw distinctions between theoretical communism and “actually existing communism.”

    1. Carla

      “This means there is no longer a “government” there, as such.”

      Funny. Just last night I just wrote something very much like this replying to a comment on a NYTimes story in which the commenter called for “the government” to create “good jobs.”

      Thanks, too, for the remark about drawing distinctions between the theoretical and the actual.

      1. JTFaraday

        For a long time already, and still today, “the government’s” primary constituency has been large corporations, not the public. Today, as I’ve said, I think there is even less distinction between the government and coporations. Trade agreements were made, for example, not to benefit most American employees, but for corporate profitability and to benefit a small sliver of management.

        It’s clear that what could happen with any federal job program is that it is constituted in such a way as to promote the neoliberal employment agenda.

        In this case, a minimum wage “‘Job Guarantee Buffer Stock’ Reserve Army of Labor,” for example, just organizes what is currently a little more of a hit or miss l’aissez faire affair, where neoliberal managers infight and undercut current employees with the unemployed.

        Imagine if they had the opportunity to organize this. If US fedgov created a pool of underemployed talent, paid it next to nothing, and put it at their disposal. That’s not “the purpose” of the “JG Buffer Stock” reserve army of labor–or so we’re told– but it’s not our government now any more now than it was when Obama passed Obamacare.

        Meanwhile, even in terms of public employment, public employees and public unions are under attack and states have to balance their budgets. The attack on public school teachers has been prepping the field for a generation at least. Age discrimination is acceptable, etc.

        I kind of think there is no clear cut solution here, unless there is a real regime change. It’s not about “spending,” per se. They would spend any amount of toilet paper dollars if they can promote their agenda doing it.

        Their agenda–that’s the danger of toilet paper dollars, right there. “The government” can and will use them to promote the corporate aganda.

        That’s why I keep saying this is not a technocratic moment, but a political moment. No political regime change, no liberal government policy.

  5. OMF

    This video hops around a _lot_. Segments at 16:30, 20:00, 31:00, (39:05!!) are interesting. It’s difficult to follow the politics from such a large space-time distance.

    A common theme of the talk is the essential conflict between American defence spending (“the cost of empire”) with its benefit to manufacturers, and the interests of the rest of the population. As noted above, the entire discussion is rooted in the unstated but omnipresent effects of the Cold War.

    As someone not old enough to remember the Cold War, and not yet in possession of historical descriptions of the its effects on society and politics, I found a few elements of the segment both enlightening and bemusing.

  6. JustMeAgaiN

    Loved it! Oh to see the political caricatures on the Sunday morning talk shows go on wearing their hearts and opinions on their sleeves like Ferguson does here. But of course even the pundits are granted their voice by corporate funding now too, so all we get is corporate NewSpeaK dressed up as enlightened social/economic/political analysis. Big brother in the form of big money has indeed won the war for civilization 25 years later and is well on its way to consolidating its gains across the globe. One can only wonder what new twisted forms of depravity will be inflicted on us all in the next 25, although the categories will no doubt remain the same: War, terror, austerity for the masses, and continued unprecedented wealth transfer up the economic ladder to the corporate fascist elite.

  7. George B,

    At the 15:45 mark or so, “If you think politics is driven by cash, then you run your electoral system after setting up your basic cash contributionss, financial interests, and power block arrangement. Then, what you get, you can be absolutely sure the Republican Party is not going to run to your left. So you can effectively, if you want to and get some estimate of the votes you’ll lose on your Left, just move to the Right and in effect turn the Democratic Party into a close carbon copy of the Republican and essentially compete for conservative Republican votes.”

    On Thursday, Noam Chomsky discussed how mainstream Democrats are what used to be called moderate Republicans.

    Thanks for the post!

  8. JustMeAgaiN

    Very ironic the thread that emerges around 35:00, where Ferguson expresses skepticism at the American public’s willingness to go along with unchecked military expansion at the tail end of Reagan’s second term. And now we know how all that played out: Naomi Klein’s Shock Doctrine strategy applied to Iraq, the Balkans, Afghanistan, Iran, and soon China and the Pacific rim. Run out of enemies/threats? Simply create NEW ONES! I can almost imagine conservative strategists laughing at this interview back then, although I’m sure none of them would even stoop so low as to entertain this sort of “liberal claptrap” in the first place. I’m sure the game plan was already mapped out in detail and the victory assured even then.

    1. Satchel Paige

      Naomi Klein’s Shock Doctrine applied to Iraq?

      Are you insane? The tools were not designed nor invented nor first discovered by Naomi Klein and they have been in use for centuries, long before Naomi Klein’s sapping parents had a little bump in the night and conceived that charlatan of a “critic” who calls herself Naomi Klein.

      Every time I follow a link to Eve’s Myth, I read another entry that pretends to be “econ” wise and “leftist” in vague orientation, but which states nothing aside from purely obvious drivel.

      I see no insights.

      I see nothing observing that economics is a pseudo-science created to apologize for whatever system of commerce and finance is being used.

      I see nothing even slightly self-satirizing beyond the absurd Yves Smith / Eve’s Myth clumsy “wordplay” used by our Female Host with No Wisdom or Humor.

      What’s good here?


      Two dislocated shoulders from patting own backs furiously with both hands?

      A bunch of pretentious commenters who imagine themselves bright klieg-lights of gamechanging perspective?

      1. archer

        So you don’t like what you read here but you have nothing of your own to offer. Go try blogging and see how far you get.

        And as for not criticizing economics, if you bothered looking at this page, you’ll see Yves wrote an entire book on that. Maybe she has the good tatse not to flog it in every post she publishes.

      2. JustMeAgaiN

        Damn, Satchmo, that’s some serious pent up rage you’ve got going on there. No one’s saying that Naomi Klein invented the concept, just commenting on the fact that she’s the latest to give it a name and a logical explanation.

        By the way, your comments are so off the chart outrageous that I have to wonder if you’re not a troll. My apologies if you’re not.

    2. Satchel Paige

      I am ever so pissed off and full of corrosive rage at being a powerless debt peon in a totalitarian state that would squish me like a bug if, by some fluke, my churlish spleen was original enough to annoy some scumbag prosecutor or ignorant guard-labor goon. Most of all I don’t like girls who are smarter and richer than me, they make me mad.

  9. Tom

    I would imagine: The first market-distortion occurred in the far distant past when mankind first started hanging out together. It probable happened closer to when they had stumbled across some fermented fruit of one kind or another and, around the time humans had camp fires. I don’t know which came first, but, that really has nothing to do about market distortions except, it created the conditions for comfortable and imaginative chit chat between those attending.
    Later in the evening, I suppose, one of the attendees asked another if he would grab some more fermented fruit for him. Of course, the one being asked, having been imbibing, was a little put-off and said ‘get it yourself’. In response to this and, as a joke, the requestor picked up a stone and said – I’ll give ya this stone if you grab me some more fruit. Well, being polite and on to the joke he said ‘sure thing’. After having retrieved the fruit and receiving the stone…the joke was carried further. The stone holder now turned to another attendee and said – ‘I’ll give you this stone and some fruit if you use the stone to clock that guy over the head with it’ ( of course clocks had not been invented yet but, language had developed sufficiently to describe the action to be taken). So the deal was accepted and the original requester now had a lump on his head and his original stone at his feet. He was a little upset and asked the clockor: why did you clock me with the rock? Of course the answer was – to get some fruit!. Well of course – the clockee said to the clockor – you hurt me, I want compensation! And thus, the clockor said to the clockee: the rock is your compensation…. get some more fruit with it. This led the other dozen or so attendees to laugh out loud as they had seen it all play out. A new game was born.

    So, we have the first Market Distortion in the form of a rock. The rock represented three different values placed upon it by the participants. It distorted the value of the fruit and the value of getting the fruit. It also led to all manner of exchange and allowed different attendees to make up any ridiculous rules that the rest of the group might find entertaining… rules development and manners. It also became a fun game that was played many times later – pass the rock, hot potato, tag, regression analysis, politics etc.

    In the interest of shortening the story and dispensing with rather unimportant details; I shall skip forward to today.

    In much the same manner as in the past, participants in this age-old drunken fireside game continue un-abated. The value of each participant has been much developed and changed throughout history but, the game remains much the same- pass the rock and don’t get clocked. The major change has been in attitude. This game is now played between groups, countries, non-state actors etc. and, has gotten much more serious. This lack of humor while playing the game has led to wars, pestilence, starvation, gun fights, shootings and all manner of bad outcomes. It appears that everyone forgot that the basis of this game is just –how much fun can be had with worthless rocks.
    My only input into all this is; lets play with rocks around the fireside remembering that we need to reserve some time to put roofs over our heads, food in our stomachs, save the planet from our reckless game (course it is fun to play while drunk around a campfire) and move on with real work that will benefit fellow humans and the planet’s other creatures that do not play our silly game. Also, some folks have been making ridiculous rules or have decided to play with no rules — it has sapped all the fun out of it. I suggest when inviting attendees to the next fireside party, that the invitation not be extended to the party poopers, that new rules be put into place and if the party poopers want to play – they will need to play in the spirit of fun under the new rules. Play local, but don’t forget the object is fun, remembering of course, that everyone will have to wake up in the morning and do real work to improve our living standards….hangover or not.

    1. nonclassical

      …please do not conflate secretive offshore financial sector banking, taking place in secrecy jurisdictions (Naylor, Shaxson) with “free-open to all MARKETS”…

      this mistake is rampant-causes mass propaganda to appear relevant…

  10. Susan the other

    I really enjoyed this video. Especially the barefeet and bermuda shorts with green sox. Tom Ferguson was right on. Clearly. For my part I can say that from JFK’s assassination on I knew things were one big lie composed of an infinite number of little lies… So the tidbits I liked were the reminders that the disappeared of South America were the labor victims of the American Empire; that government in the US was killed by bribery; that Dukakis was just another pol riding around in his tank with a helmet on; that the liberals killed Jesse Jackson’s populism much the same way they killed John Edwards’ populism; that the EU played the US through NATO; that our international financiers needed to have their bad debt in the 3rd world bailed out constantly (one book I read in the late 90s said the debt that got rolled over had accrued to the staggering sum of 4.5 Tr); and that common sense tells you that if you make a hard right turn you go around and around in circles.

    One thing jumped out: Ferguson said “the Fraud in your future” will be the con that you need to save more to reduce the deficit and protect the dollar and your import purchasing power. That has certainly happened, but today’s austerity argument is almost dead. I keep hoping that circle has closed.

    1. Massinissa

      John Edwards was a populist, wut? I always figured he was just another orthodox dem. He didnt seem any more ‘populist’ to me than say, Jimmy Carter.

      1. Susan the other

        They both appealed to the general population; they were both trashed. I’m sure there are many other examples, maybe none as obvious.

  11. Paul Tioxon

    This is a great example of ongoing Alternative America, if you notice, the self described alternative media, was in contrast to the main stream press. The liberal establishment. Today, when you hear about the mainstream media your hear the echo of lame stream liberal media. And you think of the usual suspects of Rushbo, FOX and the AEI/HF/National Review conglomerate of LIES INC. The New Left, the American counter politics to Liberalism is on full display in Tom’s 1980s era political analysis. He is using power elite analysis, by drawing the connection between large scale money donors and the political results that they are paying to influence. Capitalism has no overall plan, and capitalist are often at odds with one another, over various policies, as they seek their individual personal business interests.

    Jesse Jackson gave political speeches that were alarmingly honest, radical and practical, all at the same time. It was not the soaring rhetoric, but the plain call for the interests of nearly all of Americans to be addressed and the shameful, wasteful militarism to be reigned in and the interlocking domination of corporate America to end. What he was asking for was that the market mechanism be put into the service of the state and the state be a democratically controlled republic. Of course, that would be radical change.

    The state, taking over private enterprise wholesale, by outlawing the private ownership of key industries was never a consideration. It is not an American political ideal. In the communist nations where it was illegal to run private businesses, the results were not so spectacular. But that does not mean that political control over the economy needs to be put into the hands of businessmen. Businessmen who claim that the government should be run like a business. That is what is known as a kingdom, where the entire political order is ruled by one person, all to his personal benefit. Except in American, there are a few thousand kings, and the entire country is run for their benefit, or it is not allowed to run for anybody. The businessmen either rule or they ruin. Plutocracy.

    It is interesting to note, that conservatives, many who are posting here on NC, and are not neanderthal right wing kooks, look for some new breakthrough. An improved politics, an improved economics, a paradigm shift and so on. Endless pedantic exercises over grammar, naming and dictionary definitions of fascism, socialism, corrupted capitalism, as if there was a noble capitalism that never, ever got blood on its invisible hands. Perhaps that is what Karl Marx used to finally discern the invisible hand, he caught it red handed.

    The Liberals have been getting hammered from the left and the right since 1960’s. And now, there seems to be waning of the Washington consensus due to the failure of the Neo-Con wing of Neo-Liberalism. The New American Century is over and the century has barely begun. The areas of the world which have been systematically left out of the free world and the soviet world, remained deliberately dependent on both through the fall of the Berlin Wall, are really coming apart at the seams now. Drones, trying to control the ground from the air, just as helicopters were deployed in Viet Nam, will not establish any more certain influence over an installed social order. As much as business men like to think of themselves as the solitary source of all things good, the economy is nothing without the nation state as a platform to operate profitably from.

    Calls for intervention in Syria, Mali or even Iran are calls for government intervention, not calls for more job creators to parachute in and solve the worlds problems by turning heavily armed factions into consumers of Iphones and KFC. Reagonmics was coupled with an arms buildup, from SDI to the 600 ship navy plans, today the US Navy has 287 ships, ( a ship has to a least 500ft long). And with that diminutive state the US Navy is still bigger than the next 17 navies combined. We are still the dominant military force in the world and all that means is that we can destroy a nation in 72 hours, we can not establish a social order with civil society and prosperity. That takes real labor. And if we don’t distinguish between the so called lesser of 2 evils, we will promote the worst of the worst, of all possible evils. When it comes to pain and evil, less is more.

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