politicians public opinion parties banking industry

Plutocracy Tugs the Leash on the Two-Party Duopoly
plutocracy lobbyists

Rulers Don't Care About Public Opinion on the Economy

Money rules politics. So why do we let them have our money? We excerpt two 2013 articles from TruthOut, Mar 30 on politicians by R. Reich, and Apr 3 on plutocracy by M. Karlin,

by Robert Reich, by Mark Karlin

Before January’s fiscal cliff deal, at least 60 percent of Americans expressed strong support for raising taxes on incomes over $250,000. Yet Congress locked in the Bush tax cut for everyone earning up to $400,000.

Americans would rather reduce the deficit by raising taxes than by cutting Medicare, Medicaid, Social Security, education, and transportation. Yet Congress seems incapable of making that kind of deal.

Some 65 percent of Americans want to raise taxes on large corporations — but both parties are heading in precisely the opposite direction.

Half of Americans favor a plan to break up Wall Street’s twelve megabanks, which currently control 69 percent of the banking industry.

Tinkering with taxes or regulations sets off alarm bells in our nation’s finely-appointed dining rooms and board rooms -– alarm bells that, in turn, set off promises of (or threats to withhold) large wads of campaign cash in the next election.

About half of wealthy people had recently initiated contact with a U.S. senator or representative.

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The Blob refers to the government entities that regulate the finance industry –- like the Banking Committee, Treasury Department, and SEC -- and the army of Wall Street representatives that continuously surrounds and permeates them. As I wrote in my book, The Payoff: "The Blob moves together. Its members are in constant contact by email and phone. They dine, drink and take vacations together. Not surprisingly, they frequently intermarry. Indeed, a good way to maximize your family income in DC is to specialize in financial issues and marry someone in The Blob. Ideally, you and your spouse take turns: One of you works for a bank, insurance company, or lobbying firm while the other works for a government entity that regulates, or enacts legislation for, the financial industry.... What you and your spouse do all the time is share information. After all, no lobbying restrictions yet promulgated can prevent pillow talk between Blob spouses.

It's easy to rationalize being a lobbyist. First, every corporation has a fiduciary duty to maximize shareholder value. And, second, as a lawyer, you're trained to be a zealous advocate for your client. Many of the issues were challenging and interesting, and I worked with high-level corporate and government officials far earlier in my career than I would have at a law firm. Finally, many of the issues were industry versus industry (like telecom versus cable). Years ago, Roll Call referred to those kinds of industry issues as the "haves" versus the "have-lots." I certainly knew, understood and profited from the explosion of corporate money being spent in DC to influence government outcomes. But the financial crisis crystallized for me just how badly our legal and regulatory systems had corroded, far worse than I ever believed was the case.

Only a handful of people in DC represent the average investor or the public interest, while Wall Street employs thousands of lawyers, lobbyists, and public relations specialists. The public interest was completely outgunned. Few people in government are ardent about major Wall Street reforms. Not many wanted to take on The Blob and all that that entails for future campaigns or private careers.

A not-for-profit housing group asks to meet with a senator's legislative assistant (LA). The LA says, "I'm too busy, but you can meet with the legislative correspondent (LC)." If I'm representing a bank or major corporation, first I ask to meet with the senator or chief of staff and simply assume the LA will join the meeting. If the chief of staff won't schedule it, I call the senator's fundraising consultant (who knows I've done an event) and say, "For pete's sake, I can't even get a meeting with the chief of staff." Soon, I'll get my meeting, and the fundraising consultant will have a chit for the next time he calls me. I use my leverage to make my arguments directly to the senator or chief of staff, and the not-for-profit guy is stuck talking to some 22-year-old LC.

With multiple leakers from the Banking Committee keeping K Street well informed, the banking world had complete transparency into bill drafting, while senators who didn't serve on the Banking Committee stayed mostly in the dark.

I asked a Sen. Reid staffer why Reid wasn't using Wall Street reform as a campaign issue in Nevada against his Republican opponent in 2010, since it polled so well. The answer I got back was that Reid's campaign already had raised so much money from Wall Street that it had compromised his ability to take a populist stance.

Obama should have told Holder to kick some ass. Because he never did (and perhaps didn't want to), no one can ever say whether a competent, concerted, purposeful, and timely investigation of Wall Street executives might have led to criminal convictions.

Solving a banking crisis and its devastating effects on the American economy wasn't the reason that either Obama or Biden ever ran for president, but it's a primary reason why their ticket got elected and, in my view, has been the central (neglected) issue of their time in office.

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JJS: Downstream laws and convictions in DC are no substitute for an upstream solution -- turning off the tap. Presently, homebuyers send a torrent of land value to Wall Street via mortgages. All that spending could be kept circulating locally. How? Easy. Just shift the property tax off buildings onto land. Or charge a land use fee. Or institute land dues. Whatever method is used, it would take the value of land out of mortgages and thus out of the grubby paws of bankers, lawyers, speculators, and lobbyists. Instead, those trillions of ground rents could fund local government and pay residents a dividend, sort of as Singapore does.

Would be nice if some day those who’re expecting a political solution would at least consider an economic one. We could even show those First World wannabe reformers some real-world examples of social recovery of socially-generated site values in the developing world. Take India; in the town of Chandigarh, city residents will have to pay double or triple the amount they have been paying as ground rent to stack building material around residential and commercial sites. The rent for stacking of material for construction of malls, big commercial centres and hospitals has been increased sharply, from Rs 1,500 to Rs 15,000. Violators will be charged double. If they fail to pay up, the civic body authority will seize the construction material without prior notice. To read more

The town might not be getting a lot of the ground rent but it is getting some, more than other places around the world are getting, and it is a step toward getting it all.


Editor Jeffery J. Smith runs the Forum on Geonomics and helped prepare a course for the UN on geonomics. To take the “Land Rights” course, click here .

Also see:

Bail Out The Banksters?

Dissent From a Fed Member, Cato Scholar, & UK Press

Bailed Banks Donate to Campaigns With Gov't Money

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