By Chris Hedges and cross-posted from TruthDig
Systems of governance that are seized by a tiny cabal become mafia states. The early years—Ronald Reagan and Bill Clinton in the United States—are marked by promises that the pillage will benefit everyone. The later years—George W. Bush and Barack Obama—are marked by declarations that things are getting better even though they are getting worse. The final years—Donald Trump—see the lunatic trolls, hedge fund parasites, con artists, conspiracy theorists and criminals drop all pretense and carry out an orgy of looting and corruption.
The rich never have enough. The more they get, the more they want. It is a disease. CEOs demand and receive pay that is 200 times what their workers earn. And even when corporate executives commit massive fraud, such as the billing of hundreds of thousands of Wells Fargo customers for accounts they never opened, they elude punishment and personally profit. Disgraced CEO John Stumpf left Wells Fargo with a pay package that averages nearly $15 million a year. Richard Fuld received nearly half a billion dollars from 1993 to 2007, a time in which he was bankrupting Lehman Brothers.
The list of financial titans, including Trump, who have profited from a rigged financial system and fraud is endless. Many in the 1 percent make money by using lobbyists and bought politicians to write self-serving laws and rules and by forming unassailable monopolies. They push up prices on products or services these monopolies provide. Or they lend money to the 99 percent and charge exorbitant interest. Or they use their control of government and the courts to ship jobs to Mexico or China, where wages can be as low as 22 cents an hour, and leave American workers destitute. Neoliberalism is state-sponsored extortion. It is a vast, nationally orchestrated Ponzi scheme.
This fevered speculation and mounting inequality, made possible by the two ruling political parties, corroded and destroyed the mechanisms and institutions that permitted democratic participation and provided some protection for workers. Politicians, from Reagan on, were handsomely rewarded by their funders for delivering their credulous supporters to the corporate guillotine. The corporate coup created a mafia capitalism. This mafia capitalism, as economists such as Karl Polanyi and Joseph Stiglitz warned, gave birth to a mafia political system. Financial and political power in the hands of institutions such as Goldman Sachs and the Clinton Foundation becomes solely about personal gain. The Obamas in a few weeks will begin to give us a transparent lesson into how service to the corporate state translates into personal enrichment.
Adam Smith wrote that profits are often highest in nations on the verge of economic collapse. These profits are obtained, he wrote, by massively indebting the economy. Arentier class, composed of managers at hedge funds, banks, financial firms and other companies, makes money not by manufacturing products but from the control of economic rents. To increase profits, lenders, credit card companies and others charge higher and higher interest rates. Or they use their monopolies to gouge the public. The pharmaceutical company Mylan, in a classic example, raised the price of an epinephrine auto-injector used to treat allergy reactions from $57 in 2007 to about $500.
These profits are counted as economic growth. But this is a fiction, a sleight of hand, like unemployment statistics or the consumer price index, used to mask the speculative shell game…