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Reports

It Takes Power to Control Power

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Posted on Apr 28, 2010

By Joe Conason

With a furious majority of American voters demanding security from the depredations of Big Capital, all of the filibustering and bargaining in Congress will inevitably produce a bill described as “financial reform.” Partisan sniping aside, neither Democrats nor Republicans so far have proposed a deep and thorough cleansing.

Republicans like to pretend that they had nothing to do with the enormous bank and insurance bailouts of 2008, forgetting that most of them voted to support the “troubled asset” program, and that the authors of the program were officials of the George W. Bush administration.

Rather than merely disowning those actions, the best course is to ensure that we avoid future subsidies to the undeserving rich. That means more regulation and smarter regulation, not less—and a direct repudiation of arguments advanced by politicians of both parties in the not-so-distant past.

Today’s ideological divide is between Republicans who encourage anti-government fervor and market worship, and Democrats who insist that government can and must balance corporate power by acting when markets fail. No honest observer can still believe—as many once did—that the unbound self-interest of financiers will correct excesses and direct capital to the benefit of the broader economy automatically. No less a libertarian ideologue than Alan Greenspan, the economic “maestro” who drew his inspiration from the writings of Ayn Rand, admitted almost a decade ago that such blind faith was naive and dangerous.

So it is important to cut through the fog of militant ignorance represented by the tea party movement. If the public actually wants to stop bailing out rich brats who make stupid and destructive bets in the Wall Street casino, government must be empowered to oversee derivative trading. And if the public wants a national economy that provides decent jobs and useful goods—rather than super-profits for financial firms—then government should encourage production and construction while sharply regulating speculation.

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Skepticism about the motives and wisdom of the bankers is essential if we are to avoid suffering from their inevitable mistakes and crimes. Until the onset of the crisis, in 2008, the broad political assumption was that the reigning financiers were too smart and too knowledgeable to be questioned, let alone arraigned.

Even in the wake of Enron, those “masters of the universe” were permitted to pursue whatever deals and schemes they wished, without accountability or transparency, because they told us that public interference would ruin the prosperity they had brought us. At great cost, we have learned otherwise—or should have. The full indictment is yet to be handed up, but its particulars will range from irresponsible misdemeanors and small-time scams to unprecedented billion-dollar larcenies.

Discredited as the financial powers are, their wealth alone continues to provide them with wildly disproportionate influence over the political process. Given the complexity of the modern global economy—and the issues of derivative trading, consumer protection and the winding down of too-big failures—it will be difficult for voters to judge what qualifies as true reform. Fortunately, there are experts with years of experience in the markets who seek to promote the public interest instead of gaming the system.

Among their basic recommendations are simplification and transparency in the financial markets, decreased leveraging, expanded regulation, permanently restrained interest rates and an independent consumer protection agency. At the very least, say independent experts such as Robert A. Johnson, the former chief economist of the Senate Banking Committee, we must prohibit institutions protected by federal deposit insurance from undertaking deals that involve huge risks.

Moreover, we must end “too big to fail” by ensuring that government has the power and resources to dismantle such firms—without disastrous disruption and without enriching those who gamble blindly, expecting taxpayers to reimburse their losses.

Democrats sound more serious than Republicans in confronting these existential challenges to the economy, but will they go far enough? Unless they can pass the necessary minimum reforms, we may someday find ourselves facing a worse crisis—and regretting that we didn’t restrain the bankers when we had the chance.

Joe Conason writes for The New York Observer.

© 2010 Creators.com


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By rollzone, May 2, 2010 at 6:25 pm Link to this comment

hello. i know we have the power to force multinationals to adhere to our sovereign laws or not conduct business here. our corrupted government lacks the will to enforce these regulations. the G8 or G20 does not rule our country. the global investment bankers do not rule our country. ‘We The People’ rule our country, and we are very clearly going to peacefully demonstrate our power to rule at the election box. if it is conventions of populace they need, we will be there. corporate mainstream theft by white collar evil perpetrators is coming to an end. get behind the movement, or get out of the way. we are determined to regulate the regulators, and replace what someone does (because somebody else will); with this is the right thing to do.

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By MarthaA, May 2, 2010 at 4:10 pm Link to this comment

gerard, May 2 at 7:14 pm,

Larceny is criminal and larceny is always planned. I suspect there are many conservatives and moderates involved in the treasonous larceny of the populace of the United States to get rid of Social Security and Medicare; the Republicans are still trying to get rid of the populace’s Social Security and Medicare.

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By gerard, May 2, 2010 at 3:14 pm Link to this comment

And the next question is:  Who is “badder”?  The people who “game” the system and make huge profits?
The people who don’t know enough to do that, but invest and make some profit?  The people who know how the “market” works and do nothing to regulate it? Or the people who say it’s not their business to change the system, for this or that reason?  Or the people who sit in front of their keyboards and write critical comments?

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By MarthaA, May 2, 2010 at 1:24 pm Link to this comment

gerard, May 2 at 4:21 pm,

The problem is a functional flaw in Capitalism and the solution is fixing Capitalism and bringing those who have abused Capitalism at the expense of the populace to pay for their crimes against humanity and the nation for personal benefit at the expense of the populace.

The banksters received benefit at the expense of the populace and benefit needs to be returned back to the populace for their financialization schemes that they perpetuated upon the populace, because the populace will be paying payments on those financial securities that were created as toxic capital for the next 30 - 40 years. 

There is no reason why the banking industry and its toxic capital should have the benefit of receiving payments as a revenue stream on that toxic capital for the next 30 - 40 years, while the populace are the ones that were forced by government to recapitalize the toxic capital that they are being forced to make payments on. 

These banksters need to return their ill gotten gains; it is not OK with Capitalism for the larcenous Banksters to fraud the populace.  If one of the populace had done the same thing he/she would be in prison promptly for larceny, so larceny can’t just be OK’d because it was wealthy capitalists that did it.

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By gerard, May 2, 2010 at 12:21 pm Link to this comment

An interesting point has been raised:  Are people who do bad things, bad people? 

The capitalist system allows (even encourages) people at the top to take unfair advantage of people at the bottom. Such a system is therefore at fault.  The people who took advantage of it will never say they did wrong because the system itself is based on that kind of wrong-doding.

The system has to be changed and made less prejudiced in favor of rich elites and more prejudiced in favor of the millions of people who are equally dependent upon it, yet gain little or nothing from it.

Either the people will change the system or the system will kill the people.  Already millions die every year because of the faulty systm.

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By MarthaA, May 1, 2010 at 5:26 pm Link to this comment

The populace must unite and represent their own mighty power.  If the populace unites in earnest, they will be recognized as the power they are, because the populace united is the most powerful force politically on earth, but in the manner Jim Hightower presents, not the FOX News Network’s Right-Wing Tea Party that’s trying to use the populace for the plutocracy’s benefit.

http://www.truthout.org/michael-winship-the-lowdown-hightower59053

And, here are some excerpts of the Jim Hightower interview on sadly the last Bill Moyers Journal as reported on Truthout by Michael Winship:

“Here’s what populism is not,” he told my colleague Bill Moyers. “It is not just an incoherent outburst of anger. And certainly it is not anger that is funded and organized by corporate front groups, as the initial tea party effort [was], and as most of it is still today - though there is legitimate anger within it, in terms of the people who are there. But what populism is at its essence is just a determined focus on helping people be able to get out of the iron grip of the corporate power that is overwhelming our economy, our environment, energy, the media, government.

“...One big difference between real populism and… the tea party thing is that real populists understand that government has become a subsidiary of corporations. So you can’t say, ‘Let’s get rid of government.’ You need to be saying, ‘Let’s take over government.’” As Hightower’s fond of saying, the water won’t clear up until we get the hogs out of the creek. “I see the central issue in politics to be the rise of corporate power,” he reiterated. “Overwhelming, overweening corporate power that is running roughshod over the workaday people of the country. They think they’re the top dogs, and we’re a bunch of fire hydrants, you know?”

Of President Obama he said, “It’s odd to me that we’ve got a president who ran from the outside and won, and now is trying to govern from the inside. You can’t do progressive government from the inside. You have to rally those outsiders and make them a force… Our heavyweight is the people themselves. They’ve got the fat cats, but we’ve got the alley cats…”

——

And that is what the genteel populace needs to learn in order to save democracy.  The populace needs to unite, register and take over control of the Democratic Party that has to represent the alley cats, because nothing will change short of murder in the GOP’s socialist Republican Party that is run lock, stock and barrel by the GOP plutocrat aristocratss like Rupert Murdoch’s News Corp. who pays FOX News Network’s management and propagandists, Glenn Beck, Rush Limbaugh, Bill O’Reilly, Sean Hannity, Sarah Palin,  etc.  to keep strife going in the media through propaganda and sophism to keep the populace off balance.

There are NO plutocrats in the Democratic Party, only academic toadies to the plutocrats for their own benefit at the expense of the populace.

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By gerard, April 30, 2010 at 5:50 pm Link to this comment
(Unregistered commenter)

Conason says” “Today’s ideological divide is between Republicans who encourage anti-government fervor and market worship, and Democrats who insist that government can and must balance corporate power by acting when markets fail.”
  I doubt this is the big divide.  It rather appears that both parties more or less agree that the bailouts were necessary to save capitalism. 
  The ideological divide seems more like a difference in beliefs related to public welfare, with the Repubs wanting to cut back on taking care of people who have difficuties. They don’t want public funds spent on jobs, on food stamps, on health care, on schools (beyond a very limited point), on prison reform, on reorienting foreign policy away from war and toward negotiations, agreements and what might loosely be callse “peace.”
  When they talk about “shrinking government” it is these programs they would like to cut back.
  The Dems have lost their soul by agreeing with the Repubs about war, contrary to campaign promises. Neither have they made much progress on anything else on their list except a meager victory on a health care bill—bought at a great price and limited in its benefits. The Repubs are still fighting even that.
  What Repubs want to do with all these people who need help—now that the banks have stolen their mortgages and the corpos have shipped the jobs overseas—is not entirely clear, but Arizona gives us a general over-all idea.

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By Carol DW, April 30, 2010 at 5:13 pm Link to this comment

The Democrats are only marginally less ambitious than the GOP.
Congress no longer represents a source of power for ordinary people. It is a wholly owned subsidiary of multinational corporations. We have to explore other ways to make ourselves heard.

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By Kalpal, April 30, 2010 at 12:13 pm Link to this comment
(Unregistered commenter)

So long as we have a legislature that needs to spend a third of each day raising funds to insure their jobs do not disappear, they will be selling laws that protect the rich and powerful and harm the poor and middle class.

Elections must be financed with public funds and anyone giving money to a politician should be invited to be the long term cellmate of that politician.

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By Go Right Young Man, April 30, 2010 at 6:41 am Link to this comment

Martha, - “banksters and the corporate CEO’s of the elite’s Republican Party.”

-

How is it possible that any educated adult believes that “banksters” and “CEO’s” are all republican?  Are these the effects of simple bigotry or a product of an inability to pay attention?  Or is it a mix of the two?

Thousand of corporate CEO’s are democrats.  Tens of thousands of corporate board members are democrats. Tens of thousands of lobbyists are democrats.  The majority of homeowner and auto insurance company executives are registered democrats.  The majority of personal injury attorneys are registered democrats.

How many executives with Goldman-Sachs now work in the Obama administration?  How many board members of Fannie and Freddie are, today, democrats? How many Wall Street bankers now work in the Obama administration?  Why is the largest weapons manufacturer in the U.S., GE, run by an open Obama supporter and registered democrat?

Martha, you’re kidding yourself and not dealing with what’s real.  The corporate and political world is made up of may types of people.  Not a single grouping of “bad” people.

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By RAE, April 30, 2010 at 4:17 am Link to this comment

MarthaA reminds us…“that the populace united IS power…”. I fully agree.

However, don’t look now, but “they” have already divided and conquered. I’m not holding my breath till the day the “populace” wakes up to realize that while they’ve been fully engaged in squabbling, at HUGE EXPENSE, often over HOW to implement some initiative or other, the “banksters” have looted the larder.

From what I’ve read and heard so far there isn’t a snowball’s chance in hell the American “populace,” in spite of the country’s name, will ever get “united.” To accomplish that would take compromise and if there’s anything Americans are lousy at it’s that. It’s “Our Way or the Hiway.”

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By MarthaA, April 29, 2010 at 7:43 pm Link to this comment

I am of the opinion these hucksters knew what they were doing——  drowning the populace’s social structure in the bathtub.  Since they knew what they were doing, they are guilty as Hell, and need to be incarcerated in regular prison, not some fine swanky prison where they get to go home and be with their families and report to prison now and then.

Let me remind you that the populace united IS power, much more power than the banksters and the corporate CEO’s of the elite’s Republican Party.

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By gerard, April 29, 2010 at 7:08 pm Link to this comment
(Unregistered commenter)

Interesting title -“It Takes Power to Control Power”
These days everybody is so aware of the power of money that we forget other, perhaps more powerful, sources of power—like moral power, the power of the people to do the right thing.  If enough people came forward with enough moral power, the power of money would give way.
  People give power to money by not using their moral power to stop it.  Write one letter to an editor today.  Make one phone call to a Senator or a Representative.  “It won’t help,” you may say. The main reason it won’t help is that you won’t write or make the call.  You and you and you times a million—then what?

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By RAE, April 29, 2010 at 2:02 pm Link to this comment

Hey! Easy there, samson!

“RAE misleads by assuming that only money gives power.  People have power too.”

It was YOUR assumption. I just didn’t state other sources of power because it kinda gets complicated.

I agree that “people have power too” but when half the people are pulling one way and half the opposite whatever “power” is involved is pretty much nullified. It’s like a tug-of-war - a lot of grunting and sweat… and very little accomplished.

Then someone with MONEY comes along, buys a big tractor and hooks it up to one end of the rope… and presto! “we have a winner.” Money by any other name is still power.

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By gerard, April 29, 2010 at 1:05 pm Link to this comment
(Unregistered commenter)

Slight re-draft of a quotatioin from the above article: 
  The quote:  “No honest observer can still believe—as many once did—that the unbound self-interest of financiers will correct excesses and direct capital to the benefit of the broader economy automatically.”
  The redraft:  Nobody ever believed that the unbound self-interest of anybody will correct excesses and direct capital to the benefit of everybody. Greed has been around probably since the beginning of human history, and has never yet benefited more than a very few self-interested people.
  Problem:  Greed.
  Solutions: Self-restraint, generosity, foresight,
common sense, something conservatives once lauded as “enlightened self-interest” (emphasis on the enlightened part).
  Capitalists of the world, Unite!  The bell tolls for you.

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By orange, April 29, 2010 at 10:10 am Link to this comment
(Unregistered commenter)

You’ll know the Democrats are serious about this when they start seizing the mansions and the yachts and the luxury cars to try to get the people back the money that was stolen in these cons.

You’ll know the Democrats are serious when they put as much effort into tracking the offshore bank accounts of wall street execs as they do into tracking drug or terror money.

When you see the Democrats grabbing billions of these sorts of assets to return to the American people the billions or trillions that was stolen in these scam, then you’ll know the Democrats are serious.

When they just hold some stupid hearing where they can preen for the cameras and pretend to oppose wall street, you know they aren’t serious.

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By Samson, April 29, 2010 at 10:05 am Link to this comment

It takes power to control power.

Unfortunetly, the left gave away all its power to the Democrats, who are of course owned by wall street and wall street’s servants.

The first thing the people need to do is to take back their power by stopping this awful practice of voting for wall street’s politicians just because they have a (D) after their name.

RAE misleads by assuming that only money gives power.  People have power too.  The mistake is when we give it away to the people who have money.

We are powerless right now because we made the mistake of voting for Obama and the Democrats even though they had millions of wall street dollars in their accounts.

=========================
BTW, can’t you tell the whole ‘financial reform’ thing from the Democrats and their propaganda writers like Conason is all BS.

If this was important to them, they’d have done something about it when they took office.  Instead, their first act was just to give trillions more to wall street.

Now, they have to pretend like they are not wall street’s puppets as part of the effort to try to con the fools into voting for them again. 

Expect a lot of show and political theater. Don’t expect anything that really reforms wall street, imprisons the crooks, and gets our money back that they stole.  The Democrats will just make a show for awhile before they get re-elected and go back to stealing every time we have so they can give it to their wall street buddies.

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By balkas, April 29, 2010 at 7:13 am Link to this comment

Some societies were egalitarian to the degree that they did not have word “stupid” to use as a label for anyone.
Nobody being stupid, now, that’s democracy. Egalitarian societies had no geniouses- everybody had been more or less equally-valued.

How ab ‘civilized societies? Well, we have a lot of stupid, greedy, stubborn, arrogant, ignorant, lazy, selfish, etc., people.

So, the first step to take wld be to cleanse our language. It is polluted. It hurts people like nothing else.

It is not nature that dichotomizes or categorizes people.
Nature or god does not split people into categories such as smart-stupid,honest-dishonest,stubborn-nonstubborn, better-worse, etc. tnx

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By Go Right Young Man, April 29, 2010 at 6:04 am Link to this comment

Mr. Conason,

It is true that looking directly at the sun without benefit of heavy filters is harmful.  Not so with the Tea Party Protesters.  There is no need to apply such heavy filters.  Simply listening will suffice.  Why not give it a try?

Not long ago you were talking and writing in regards to how dissent is the highest form of patriotism.  You spoke as if there were few more noble ways to express dissent than protest demonstrations.  It was one of the few times I have agreed with you. It’s fascinating, however, how your attitudes have so drastically changed in such a short time.

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By RAE, April 29, 2010 at 4:56 am Link to this comment

“It Takes Power to Control Power”

And THAT, my friends, is the chicken & egg loop we’re in and in which we will likely remain until humanity’s genetic code is infused with the instinct to build POWER WITH instead of today’s relentless, ubiquitous POWER OVER madness.

I’ve always held the notion that there is something fundamentally wrong with COMPETITION. A little, as with Tobasco sauce, goes a long way with me. Friendly rivalry is often a civilized stimulus and even great fun. But it doesn’t take much for what should be a “spice” to morph into the “main course.” What else is WAR but unbridled competition? It’s WIN at ALL COSTS.

The “competitive spirit” is the very foundation of POWER OVER. I don’t expect many readers to agree with me. We’ve been conditioned from birth to hold, almost in religious awe, that the name of the game is to BEAT THE OTHER GUY. The subtitle is “No matter what it takes.”

“Power corrupts; absolute power corrupts absolutely.”

“This arose as a quotation by John Emerich Edward Dalberg Acton, first Baron Acton (1834–1902). The historian and moralist, who was otherwise known simply as Lord Acton, expressed this opinion in a letter to Bishop Mandell Creighton in 1887:

“Power tends to corrupt, and absolute power corrupts absolutely. Great men are almost always bad men.”

Since money=power and power=money (talk about bedfellows) is there any hope for us?

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