By Lambert Strether of Corrente.
Jessica Desvarieux of the Real News Network interviews Rob Johnson, the Director of the Economic Policy Initiative at the Franklin and Eleanor Roosevelt Institute and a regular contributor to the Institute’s blog NewDeal2.0. He serves on the UN Commission of Experts on Finance and International Monetary Reform. Previously, Dr. Johnson was a Managing Director at Soros Fund Management where he managed a global currency, bond and equity portfolio specializing in emerging markets. He was also a Managing Director at the Bankers Trust Company. Dr. Johnson has served as Chief Economist of the US Senate Banking Committee under the leadership of Chairman William Proxmire and was Senior Economist of the US Senate Budget Committee under the leadership of Chairman Pete Domenici. Dr. Johnson was an Executive Producer of Taxi to the Dark Side, an Oscar Winning documentary produced and directed by Alex Gibney.
I’m giving Johnson’s bio in its entirety, to emphasize how very much there is to it. And I apologize for going to the Real News Network well again, too soon; I skipped over this video yesterday, assuming that there would be nothing extraordinary about it. But I was wrong! Here’s the video:
And here’s the transcript, to which I will add interspersed commentary. First, though, here’s a quote from another Rob Johnson interview in 2013:
I guess the way I’d put it in a metaphor is it feels like there are an awful lot of the elite that know this system is not wholesome, and they’re all standing on the deck of the Titanic looking in each other’s eyes, and they’re asking a question with their eyes, “Are we going to help this navigator? Are we going to help this captain get off the ice? Or are we going to get the food and the jewels from the safe and put them in our lifeboat?” And my sense is that most of them are trying to get stuff into their lifeboat, and that system isn’t going to cohere. And in that dysfunction there is opportunity.
So one wonders what opportunities have arisen in between then and now, eh? Here’s today’s transcript:
DESVARIEUX: So, Rob, what role have the financial institutions like central banks played in problems of democratic governance?
JOHNSON: Well, to the extent that central banks are very responsive to financial institutions and, as we saw in the leadup to 2008, unreceptive to strong supervision and strong regulation, they–how you say [incompr.] problem erupted [incompr.] crisis.
On the other hand, they can’t play a stabilizing role. And as they sit in that intersection between markets and people, as a government institution they can fortify what you might call the democratic needs or structures that create a healthy society and a healthy financial market. We have a lot of work to do to put that back in place right now.
Let’s stop right here. Let me caveat at the outset that I’m really in “more in sorrow than in anger” mode, here, but that said, I find this interview highly disconcerting, to say the least, and hard to account for. It feels like Johnson’s gone on tilt. I won’t snark on the “[incompr.]s”, or on the pre-stride-hit “intersection between markets and people” (Soylent Green “intersects” people?), but get this: “We have a lot of work to do to right now.” What can “that” be? Surely “democratic needs or structures.” But central banks like the Fed or the ECB are independent. Since when did they even reflect, let alone “fortify” democratic needs or structures? So, how can we “put back in place” what never was? Perhaps Johnson means not democratic, but regulatory structures? If so, why not say so?
DESVARIEUX: Do you see a declining influence or ability of the nations to control multinational corporations?
JOHNSON: I think we’ve been in that decline for quite some time, maybe 40, 50 years. The mobility of financial capital, the mobility of technological capital, has pitted state against state, region against region, and nation against the nation. As we’ve seen with the large low cost labor based economies of China and India being integrated with the world economy, we’ve had a very, very profound change in inequality, what you might call a race to the bottom in labor rights and a race to the bottom in environmental conditions.
True enough, at least in part, but unremarkable. For example: Isn’t it at least possible that the 1% of the 1% — the sort of oligarch who has one home in London, another in Dubai, and several others, one or two forgotten — are in fact trans- or post-national? That the nation-state is, for the few who really run the world, a flag of convenience? This is certainly true for Russian and Ukrainian oligarchs, and are US or Chinese oligarchs so very different? And if this idea has merit, surely it puts a different complexion on “state against state”? Not to mention the idea that the mobility of capital and the mobility of capitalists are intertwined problems. Surely the NC commentariat isn’t the only cast of characters to have come up with this idea? And we might also mention that the “profound change in inequality” differs in its nature, worldwide: Thailand, though highly unequal, is called by some the Detroit of Asia, and I doubt many of its citizens — unlike those from the Detroit of North America — would want to turn the clock back forty years.
The power of capital has never been higher, and the power of citizens is such that governments are now agents of capital to keep what you might call the production locations in their district. And the historic role of the capital versus labor fight, the state being the referee, has changed form. As [incompr.] a famous scholar at [incompr.] University said, we now have a deterioration of representation, where the state works with capital to keep down the demands of labor in order to maintain capital in place, how we say, within the domain [incompr.]
True that the power of capital (however defined) has never been greater, at least in my lifetime and my parents’ lifetime. Modulo the “[incompr.]”, again, however, is “referee” really the right metaphor for the state? Since when was the state ever a neutral arbiter, outside the game? (The agencies set up by FDR, for example, were rule-governed and not corrupt, so they might be considered fair, but they were in no sense neutral; systemically, their function was to preserve capital; they were and are players on the field, not referees; that’s why disorder in the front office affects them.)
DESVARIEUX: Alright. Let’s pivot and talk about Europe. Elections are coming up at the end of May, and several right-wing parties are expected to make some gains in the European Parliament. Do you see right-wing populist movements as playing a significant role in worsening this problem?
JOHNSON: I think right-wing populism is a symptom of the despair of the feeling that there is no direction home, as Bob Dylan used to say in his “Like a Rolling Stone” song. There’s no sense of order, there’s no sense of fairness, there’s no sense of rules, and what ones we have are rules made for the elite, for the powerful. You’re looking at places like Greece and Spain with 50 percent youth unemployment. These are not places where people are going to be attracted to anything other than a restoration of order and an alleviation of their fear. You see the same thing taking place in India right now. [incompr.] Modi is running on a kind of make-the-trains-run-on-time authoritarian agenda. And people are responsive to this ’cause they don’t see any coherence in the system.
For what this is worth, since I’m not a European expert, I think the situation is both more nuanced and, in some places, more hopeful than Johnson suggests. Johnson mentions Spain, but “Spain has avoided the emergence of an organized racist right” and enjoys continuing mass protests against austerity. In Greece, the socialist party, SYRIZA, is in the lead for the coming elections for the European parliament, and very close in the national elections although, granted, when asked which party they trusted most, 42% of Greeks answered none. On the bright side, they didn’t choose Golden Dawn! Not to sound like Pollyanna here, but “These are not places where people [all? Some? Who?] are going to be attracted to anything other than a restoration of order and an alleviation of their fear” is clearly not universal. The standard trope that the right prospers in hard times, as in the 30s, seems not to be true, then, or not true in the way that it has been. So, don’t those demonstrators in Spain show there’s opportunity for democratic governance? Why not give listeners some detail on them? Who were they? What were their demands?
DESVARIEUX: So what do you see as the solution, then?
JOHNSON: A solution? A solution, I believe, involves substantial reforms to diminish the power of money and diminish the power of large corporations in relation to individuals. Corporations are not people. Right now they have the rights of people but none of the responsibilities. They need to be taken out of the game. You need in the United States go back to the Fourteenth Amendment of the Constitution and say what matters is not personhood, what they call natural personhood. A corporation is an artificial persons. They should not be able to play a big role in democracy, and the money and wealth of individuals should not be able to play a role in either.
First, notice how we’ve been sliding, all but insensibly, from “capital” to “corporations” (“large”) to “money” and to “wealth.” Those are very different concepts. If we lack crisp definitions of the forces that prevent democratic governance, how are we to achieve it? And if those forces are global, as the discussion to this point suggests they are, why couch “the solution” is American terms? For example, what is the European equivalent of the Fourteenth Amendment, if any? Further, I don’t know whether corporations are persons to the EU, or in European civil code countries, and I would expect Johnson to say. Finally, if the American left tropes of “get money out of politics” and “corporations are not people” are meaningful in the European context, I would expect Johnson to give me some detail to back up that implicit claim as well. Those demonstrators in Spain — what do they say?
DESVARIEUX: But how would you actually do that, Rob? ‘Cause it seems like a pipe dream now, especially after this McCutcheon decision. How would one go about doing something like this?
JOHNSON: Well, it’s very, very hard. We’ve let things get way out of balance in this country over the last 40 years. And I would say it’s not easily feasible. But activity and outrage and protest, hopefully nonviolent protest, but nonetheless raising the temperature on the part of the body politic that this is what is not tolerable has to be a part–it has to be part of the equation.
Again, more despair, which could and should have been alleviated, not only for the benefit of the TRNN’s audience, but for Johnson personally, by concrete examples of “activity”. For example, here in the great state of Maine, we’ve had the following activities tending toward democratic governance that I can think of, off the top of my head: (1) partial success with resistance to landfills owned by large out-of-state corporations; (2) success, so far, in preventing the state from being bisected by an “East-West Utility Corridor” (probably at least a pipeline), sponsored by one of the state’s largest corporations, and an even larger Canadian oil firm, Irving; (3) the successful prevention of faculty firings at the University of Southern Maine; (4) more and more local food sovereignty bills; and (5) Occupy. That’s quite a tally for a small, marginal state. I bet there’s a lot more such activity all around the country, and you’d think an organization with clout and a budget like the Roosevelt Institute could do some research and give Johnson some talking points so he isn’t left in despair with only generalities to point to.
And about non-violence, “hopefully.” First, I’m a believer in strategic non-violence because 20th-Century. My bias exposed, my feeling is that if you’re going to put somebody “in harm’s way” (as the cliche has it) by asking them to risk violence by being violent, then you’d better have a good reason for doing so, that you can express in clear language. I don’t see a reason, or language, like that in this interview. Further, “hopefully” implies that violence could bubble up, randomly. But if that’s a possibility, shouldn’t the left be thinking strategically, and trying to avoid it, leverage it, or do some harm reduction? “Hopefully” implies the left is doing none of these things; hope is not a plan. Finally, a useful hermeneutic is that the first person to propose violence is always the cop. So, we’d indeed be “hopeful” that violence be avoided, but not perhaps for the reason Johnson thinks. Again, an organization with clout and a budget should be providing Johnson with talking points on this topic.
Frankly, I found this interview extremely disorienting, even distressing; Johnson’s been laboring in the vineyard for a long time. For me, the contrast between the vivid metaphor of social dynamics on board the sinking Titanic, in 2013, and the imprecision and ungrounded abstractions of 2014 is striking. Did the oligarchs sail off in their lifeboats and leave Johnson, despairing, on the tilting deck? It was almost as if — I imagined — Johnson had received a phone call with terrible news, like a death in the family, just before the interview, and had to sleepwalk through it anyhow.
One might even speculate — because it would irresponsible not to speculate — what the imagined bad news might have been… I know that for some who have left the Democratic Party, especially after a life-time of party work, the experience has been much like a death in the family: Severed ties, mourning for what once was or might have been, time on their hands that would have been spent with the lost one. One might speculate, then, that Johnson received terrible news about the Democrats, with whom he has been deeply involved for many years, or about the Democratic nomenklatura, or about the administration — news that we proles don’t know about yet. Some terrible act of bad faith.
NOTE  FWIW, and my own thinking on this is by no means crisp, I don’t think we need to “get money out of politics” so much as we need to take (a nice chunk of) capital away from capitalists, and if they don’t have so much loose cash lying about, they’ll have less capacity to buy up officialdom with it, a happy byproduct.
NOTE  “Outrage” only if tactically appropriate, because otherwise it’s self-indulgent. And “protest” hardly ever, at least in the US context, since there it’s demonstrably ineffective; think back to Iraq. (I understand from our intern, Jessica, that “protest” in Spain is a different kettle of fish from “protest” in America; it never works to project the American context; never.)
NOTE  Gene Sharp lists 198 Methods of Non-Violent Protest and Persuasion. Not all non-violence is non-violent “protest”; “parallel sovereignty,” for example.