Breaking out of the Billionaire Bailout Society

Democracy, socialism, capitalism, neo-liberalism -- none of them do justice to who we are and where we're headed. Socialism left the planet several decades ago, except in the minds of Fox News pundits. We're not sure what capitalism really is anymore, now that we've bailed out the entire financial sector. Neo-liberalism is so passé, as major governments around the world intervene to halt the financial collapse. And democracy is still with us, we hope, but we wonder for how long as our politicians and policies seem so easily bought and sold.

Perhaps we need a new vocabulary, one that helps us describe a society that promotes the accumulation of vast riches, bails out the rich when they take too many chances, and avoids responsibility for the common good. Even Milton Friedman would have trouble calling that capitalism.

How about the Billionaire Bailout Society?

Here are its salient features:

1. We promote accumulation of vast fortunes without limits.
2. We shun progressive income taxes that could narrow the gap.
3. We keep most of finance deregulated even after it has collapsed so spectacularly.
4. We let the minimum wage atrophy.
5. We discourage unionization.
6. We let middle class jobs disappear.
7. We allow a revolving door between public office and high paying private sector jobs.
8. We let our public infrastructure deteriorate.
9. We belittle government and public service.
10. We promote private gain as the best way to promote the common good.
11. We force our children to pile up debt in order to get an education.
12. We live with a porous safety net.
13. We encourage health care to be a profit maximizing enterprise.
14. We allow institutions to become too big to fail.
15. We bail out the largest financial institutions when they do fail, even if that means transferring trillions to Wall Street.
16. We allow Wall Street to use its bailout money to lobby against the public interest.
17. We let Wall Street keep its bailout-created "profits" and bonuses.
18. We have no clue if the financial sector provides any real value to our economy.
19. We permit financial hucksters to buy up solid companies, load them up with debt, take the cash, and then drive them into the ground.
20. We bad-mouth as protectionist all efforts to keep jobs in this country.
21. We don't have any serious plan for returning to a full-employment economy.
22. We live in awe of billionaires.

Of course, it takes a billionaire to help us understand how the billionaire bailout society really works. Here's what George Soros said recently about Wall Street's latest profit binge:

"Those earnings are not the achievement of risk-takers. These are gifts, hidden gifts, from the government, so I don't think that those monies should be used to pay bonuses. There's a resentment which I think is justified." (Reuters)

Yes, there's resentment, but most of the action has come from the tea-baggers who are the foot soldiers for our new social order. Although the vast majority of Americans are upset about the financial casino, the bailouts and the loss of jobs, we need a progressive infrastructure to mobilize it. Perhaps the recent demonstrations at the American Bankers Association meetings in Chicago signal the start of labor and community mobilizations. It's long overdue.

It would be easy to give up. Apathy is Wall Street's best friend. But we've been here before. It took the populists several generations before they were able to bust the trusts when Teddy Roosevelt rode to office. It took decades of labor agitation and the organization of the Progressive movement before its ideas became the core of the New Deal. It took even longer for African-Americans to build a successful civil rights movement to end Jim Crow. We shouldn't expect it to be easy to build an alternative to the billionaire bailout society.

We drank the cool aid of deregulated markets and private gain as supreme values. We got drunk on its bubbles until they burst. Now we're bailing out the super-wealthy while 29 million of us need work.

Turning that around is going to take hard work and planning for the long haul. It's going to take years of education and organizational development. Twitter is a great tool, but it can't substitute for organizational structures. Most of all, it's going to take a new vision that focuses on the common good, on what ties us together, on something more precious than private gain.

What does that mean? Imagine what we could do if we had the courage to institute steep progressive taxes. Today, the top 400 wealthiest Americans have a combined net worth of about $1.5 trillion. Had progressive taxes reduced their wealth to "only" $100 million each, we would be able to endow every public college and university, two-year, four-year and graduate school, so that all of our children could go to school free, in perpetuity.

Wouldn't that be worth it?

Les Leopold is the author of The Looting of America: How Wall Street's Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About It, Chelsea Green Publishing, June 2009.

 

 

Follow Les Leopold on Twitter: www.twitter.com/les_leopold

Comments

[Averal]

Why don't we call it what it is? Feudalism

Wikipedia...................Feudalism is a decentralized sociopolitical structure in which a weak monarchy attempts to control the lands of the realm through reciprocal agreements with regional leaders

Substitute super rich for monarchy, wealth for lands, and politicians for regional leaders, and you have a near perfect match for the textbook definition of feudalism.

Where is Robin Hood when we need him?

[whytruthhurts]

Capitalism is all about protecting the rich at the expense of the poor and the middle class.

[Bayard Waterbury]

The situation in what you described is sickening. There is a name for our system. It can be called either a plutocracy or an oligarchy, but either way it's the same. This is how things were for Teddy, and for Marie Antoinette. It has all happened before, and we still prefer to be ostriches in the process, prefering the status quo to the unknown, and probably because only one real reformer has been identified: Elizabeth Warren. As much as I had hoped that our new President would do something meaningful, he is inside the Beltway, and is surrounded by wonks who got no nads, or who are completely coopted in the time of lobbies and campaign financing which controls who we must rely upon and makes real reform of any part of our system completely impossible. Thanks for your wonderful thinking.

[tjxflyer]

It's the Buccaneer Economy - the result of 30 years of Reaganomics and a drive toward privatization.
The Republican'ts have succeeded in hijacking the language and public discussion. Concern for the common good has been supplanted by the drive for private, exclusive, anti-government.
It began with attacks on welfare (remember Reagan's invocation of "Cadillac driving welfare Moms"?), moved to public education (e.g, removing civics education, creating private "academies" to preach ideology and dogma rather than transfer knowledge) and reduced government oversight (decades of business growth through merger and acquisition). The wholesale transfer of public monies to private coffers through Iraq is only a recent egregious example (KBR, Blackwater and others making billions to do things normally assigned to public entities).

One of the earlier comments referred to Ancient Rome. I fear they are right. Toss in a dose of the late stages of the British empire and 1930s Germany too.

Keeping a fair portion of the general public fat, frightened, dumb and happy to watch rather than participate has allowed the so-called conservative movement to plunder the Treasury, hijack the culture and roll-back individual freedoms.

I used to believe the USA was a self correcting system. Obama gives me some hope that still may be true. But if we don't address the systemic rot that has taken hold in this country and throw the corporate buccaneers out - and in jail - we will follow Rome, Britain and Germany down the path of weakness and potential ruin.

[marinara]

Let's face facts, our culture worships wealth. We love the luxury and exclusive goods more than ever now. We can't even bear to look at the poor, how can we help them?

[isjois]

Sadly - you're right.

I wonder what the wealthy will do, as daily more and more homeless show up outside of our suburban malls begging for spare change. I would hope they would see the despair and start to share. But, they will likely just pass laws making it illegal to "beg" near retail establishments.

Unfortunately, my kids see the homeless every day in our well-off community. Thirty years ago, I don't remember ever seeing the homeless. Even when my family went "to the city" - we didn't see the despair that faces us now.

[williamwilliam]

I'm beginning to think that ultimately, progressive rational government and society
are a pipe dream, given the bitter pill that is human nature.

Lets face it- America on paper- the original piece of paper that was the constant bane of Mr. Cheney and his thugs- was an anomaly.

As the mess that is the United States continues to lurch toward history, its hard to deny that we are merely returning to the norm here.

The predators that now enjoy control of our government could never have succeeded without
our apathy, that's true.

But the fact is, America is not apathetic- we have been and continue to be enthusiastic participants in our own destruction.

To put it another way, we have greeted them as liberators,

And though neither they nor we will ever admit it, they could never have done
it without us.

[isjois]

We've been brainwashed by fear tactics and pipe dreams. In the same breath, we're told that we can be rich if we just work hard enough AND we better go get vaccinated or we'll die from the swine flu. Working hard and vaccines do not make us wealthy and healthy! But, if you listen to the media, it's easy to think that's all it takes to have a good life.

Once more people - stop, take a deep breath and really think through what we're told - they'll start to get it. It's happening....just slowly.

We may have greeted them as liberators...but, it's not too late to grab the torches and force them out of town.

[HenryDavid]

Yes, the 22 features you listed are accurate and represent a badge of shame in how our society has degenerated.

Here are a couple more conditions to consider. A public education system where students are intimidated into not learning and dropping out because of the violence in the classroom. Two massive wars supported by only a minority of citizens and whose expenses--human and financial--will haunt us for decades.

The only good thing to say about Congress is that some congressmen are less corrupt than others. How pitiful to even consider that a positive sign. Corruption has snowballed, and congressmen can do immense damage to the country in only one term (e.g., the bailouts, the wars, et al).

We're doomed unless someone comes up with a viable solution. The conditions we face represent how fascists end up taking control as the general population becomes desperate.

[Ron Shook]

Les,

Exactly! A truly progressive income tax is the only way to face the future we have before us, and fairly provide for the general welfare of US citizens. Let's return to Dwight Eisenhour's time of presidency when the top tax rate was 75% and the average CEO's income was 30 rather than 500 times the average worker's income. A country with such a gigantic disparity of income is on the verge of physical and moral collapse, as evidenced by historical example after example. That kind of "freedom" is debilitating rather than enabling to a society. It encourages criminal rather than entreprenurial behavior. Haven't we seen enough of that?

[Douglas Tooley]

Lieberman and McCain should be leading us to rational(and accountable) solutions, instead they are an anchor that is sinking the ship.

[petef59]

Endow all 2yr, 4yr and grad schools such that free tuition into perpetuity is possible? It will never happen: the major social power game played by most US citizens is to be contemptuous of those with differences; for Christ's sake, equalizing educational opportunities might force psychological maturity upon educated and priveleged classes.

[kamachanda]

Les, that list is unofficial Republican Party Platform. Unfortunately, many "moderate" Democrats act like Republicans, so the list applies to them as well.

[thebeerdoctor]

The idea of a progressive populist uprising seems somewhat delusional. Here in Ohio there is a huge push on the part of the gambling industry to create four Ohio casinos. Using the carrot and hook of supposedly creating new Ohio jobs and keeping Ohio gambling money within the state, the Cleveland, Columbus and Cincinnati branches of the NAACP have swallowed this whopper and endorsed Issue 3, along with the Ohio AFL-CIO.
Organizations that once were concerned with the needs of common people have now embraced the monetary schemes of an industry without any social value to society, with the exception of keeping alive the fantasy of possible free money floating about.

[spiralskydancer]

greetings....there are certain inevitabilities in life that are unavoidable.....we are in the midst of a very major economic unavoidable: the last stage of the evolution of capitalism.......try to stop it, no way...try to slow it (the progressive approach), a waste of energy....take deep breath and surrender....let them have it , they're getting it anyway and the sooner they are left to do whatever they want the sooner will be the end of it....stand aside while they and their followers go over the cliff.....and then?you say.....what will happen......well i don't know what will happen, but something will happen....maybe nothing more than life without them, maybe something better.....

[joebaggadonuts]

Before they finish making sausage out of you, don't you think you should fight for your right to live a decent life?

[FreeNemo]

Which is better: slavery or prison?

[spiralskydancer]

hey joe where you goin' with that gun of yours......the sausage makers are too busy fighting to make sausage out of each other to come looking for me......i've got some social security coming in, house is paid off, car is paid off, got some savings in the CREDIT UNION, and a little cash under the mattress......decent life? you bet....lucky to have it? absolutely.......not a slave, not a freeman, just a human being happy to wake up everyday and get to spend a few more hours on this amazing planet....

[kamact]

In line with behavioral economics, what is needed is a major change in the core systemic incentives. Given this, middle income workers, consumers and investors, who account for about 70% of our economy, need to be informed and mobilized to reward those companies that contribute to the common good.

I propose that we create the "American Institute for a Democratic Economy" (AIDE) that marshals the economic power of middle-income workers, consumers and investors to positively impact the behavior of our corporations so that those that contribute to the common good are rewarded with growing sales revenue and higher stock values.

This institution, which would involve a coalition of labor unions and pension funds (e.g., those for teachers, police, etc.), would provide an ongoing scoring of key public companies in terms of compensation ratios, employee goodwill, consumer goodwill, investor goodwill, and sustainability.

These scores would be publically shared via its Website, eNewsletter, Email, and social media. Companies with particularly negative scores would be put on notice that AIDE members will take “corrective actions” such as buying from and investing in their competitors (and perhaps even shorting the stocks of “noncompliant” companies).

Our corporate leaders will certainly be responsive to our focused and informed economic power. They will gain valuable enlightened self-interest and will, as a result, seriously include common good considerations in their innovations, marketing, hiring, and governance practices.

Kamact, a capitalist who believes in the benefits of regulation and progressive taxation

[silentknight65]

If you translate the above listed parameters to 'equate' them to our modern-day society, that list bears a 21st Century resemblance to........................................

THE ROMAN EMPIRE !!!!!