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Yves here. Real News Network features a vivid discussion between Rob Johnson, Director of the Economic Policy Initiative at the Franklin and Eleanor Roosevelt Institute and a member of the UN Commission of Experts on Finance and International Monetary Reform, and Paul Jay on the short-sightedness of the uber-rich.
Although many of the themes of this talk will be familiar to Naked Capitalism readers, Johnson, who is also a long-standing political insider, is blunt. For instance:
JAY: So this is a tremendous concentration of wealth…These guys are making a killing. What possible motivation would they have for any change?
JOHNSON: Well, there’s an old story about a guy that jumps out of the Empire State building. And when you get the 19th floor, you open the window and say, how you doing? And he says, fine so far. I think increasingly those billionaires and other wealthy people know that we’re on an unstable trajectory, that the system is dysfunctional, the system’s broken, and we are heading towards social conflict. Social conflict can take the form of more repression, military equipment, intimidation, incarceration. As you know, the prison population, particularly black male population, is exploding, and America has a tremendous eyesore associated with the incarceration of black males. But there is a sense in which if you have wealth or if you have the knowledge to create wealth, say, like an engineer at Apple Computer, you’ve got to be scared that it isn’t going to go on, you’re not going to be able to reap the fruits of your talents and your wealth unless we adjust course. I think wealthy people have to change course now. It’s not sustainable.
But Johnson’s sense of urgency in large measure reflects his frustration with inertia among the elites, the fact that even the ones who recognize the seriousness of these looming problems are taking an “every man for himself” posture:
JOHNSON: I’m hearing back that we are on an unsustainable financial trajectory, the financial system has been unmasked as unstable and unfair, and that that contributes to inequality. Inequality, part of which comes from the operation of the financial center, is a formidable, formidable cause of sociali instability in the medium-term. Whether you’re talking to intellectuals like George Stiglitz or Tom Piketty, or whether you’re talking to donors, environmental concerns, financial system coherence, and governance coherence, the international system doesn’t function. Multinational corporations are so large in relation to people that they can arbitrage and protect themselves across different segments of society, meaning China or Iowa versus Michigan or what have you. They can unseat the power of local governments by threatening to leave or for rich subsidies being drawn it.
But all these tensions that have to do with governments also leaves these elites talking as though, I know how to protect myself, I have enough money, I have enough lobbying power, I have enough to protect myself from being who pays the bill, who bears the burden. But they don’t have any believe that they individually have the power to impart a new design that’s healthy for everybody.
I’ve talked to many, many people–’cause I use to work in Washington–who say, I have to go compete, I have to be part of the lobbying system; God I wish somebody like President Obama could stop us all and put it back to what you might call a fair game. But as long as I don’t believe that that fair game exists, I have to stay in there and keep pushing.
Please watch this video and circulate it widely. The transcript is here.