Johann Hari: This corruption in Washington is smothering America's future
How do you regulate banks effectively, if the Senate is owned by Wall Street?
This week, a disaster hit the United States, and the after-shocks will be shaking and breaking global politics for years. It did not grab the same press attention as the fall of liberal Kennedy-licking Massachusetts to a pick-up truck Republican, or President Obama's first State of the Union address, or the possible break-up of Brangelina and their United Nations of adopted infants. But it took the single biggest problem dragging American politics towards brutality and dysfunction – and made it much, much worse. Yet it also showed the only path that Obama can now take to salvage his Presidency.
For more than a century, the US has slowly put some limits – too few, too feeble – on how much corporations can bribe, bully or intimidate politicians. On Tuesday, they were burned away in one whoosh. The Supreme Court ruled that corporations can suddenly run political adverts during an election campaign – and there is absolutely no limit on how many, or how much they can spend. So if you anger the investment bankers by supporting legislation to break up the too-big-to-fail banks, you will smack into a wall of 24/7 ads exposing your every flaw. If you displease oil companies by supporting legislation to deal with global warming, you will now be hit by a tsunami of advertising saying you are opposed to jobs and the American Way. If you rile the defence contractors by opposing the gargantuan war budget, you will face a smear-campaign calling you Soft on Terror.
Representative Alan Grayson says: "It basically institutionalises and legalises bribery on the largest scale imaginable. Corporations will now be able to reward the politicians that play ball with them – and beat to death the politicians that don't... You won't even hear any more about the Senator from Kansas. It'll be the Senator from General Electric or the Senator from Microsoft."
To understand the impact this will have, you need to grasp how smaller sums of corporate money have already hijacked American democracy. Let's look at a case that is simple and immediate and every American can see in front of them: healthcare. The United States is the only major industrialised democracy that doesn't guarantee healthcare for all its citizens. The result is that, according to a detailed study by Harvard University, some 45,000 Americans die needlessly every year. That's equivalent to 15 9/11s every year, or two Haitian earthquakes every decade.
This isn't because the American people like it this way. Gallup has found in polls for a decade now that two-thirds believe the government should guarantee care for every American: they are as good and decent and concerned for each other as any European. No: it is because private insurance companies make a fortune today out of a system that doesn't cover the profit-less poor, and can turn away the sickest people as "uninsurable". So they pay for politicians to keep the system broken. They fund the election campaigns of politicians on both sides of the aisle and employ an army of lobbyists, and for their part those politicians veto any system that doesn't serve their paymasters.
Look for example at Joe Lieberman, the former Democratic candidate for Vice-President. He has taken $448,066 in campaign contributions from private healthcare companies while his wife raked in $2m as one of their chief lobbyists, and he has blocked any attempt in the Senate to break the stranglehold of the health insurance companies and broaden coverage.
The US political system now operates within a corporate cage. If you want to run for office, you have to take corporate cash – and so you have to serve corporate interests. Corporations are often blatant in their corruption: it's not unusual for them to give to both competing candidates in a Senate race, to ensure all sides are indebted to them. It has reached the point that lobbyists now often write the country's laws. Not metaphorically; literally. The former Republican congressman Walter Jones spoke out in disgust in 2006 when he found that drug company lobbyists were actually authoring the words of the Medicare prescription bill, and puppet-politicians were simply nodding it through.
But what happens if politicians are serving the short-term profit-hunger of corporations, and not the public interest? You only have to look at the shuttered shops outside your window for the answer. The banks were rapidly deregulated from the Eighties through the Noughties because their lobbyists paid politicians on all sides, and demanded their payback in rolled-back rules and tossed-away laws. As Senator Dick Durbin says simply: "The banks own the Senate," so they had to obey.
It is this corruption that has prevented Barack Obama from achieving anything substantial in his first year in office. How do you re-regulate the banks, if the Senate is owned by Wall Street? How do you launch a rapid transition away from oil and coal to wind and solar, if the fossil fuel industry owns Congress? How do you break with a grab-the-oil foreign policy if Big Oil provides the invitation that gets you into the party of American politics?
His attempt at healthcare reform is dying because he thought he could only get through the Senate a system that the giant healthcare corporations and drug companies pre-approved. So he promised to keep the ban on bringing cheap drugs down from Canada, he pledged not to bargain over prices, and he dumped the idea of having a public option that would make sure ordinary Americans could actually afford it. The result was a Quasimodo healthcare proposal so feeble and misshapen that even the people of Massachusetts turned away in disgust.
Yet the corporations that caused this crisis are now being given yet more power. Bizarrely, the Supreme Court has decided that corporations are "persons", so they have the "right" to speak during elections. But corporations are not people. Should they have the right to bear arms, or to vote? It would make as much sense. They are a legal fiction, invented by the state – and they can be fairly regulated to stop them devouring their creator. This is the same Supreme Court that ruled that the detainees at Guantanomo Bay are not "persons" under the constitution deserving basic protections. A court that says a living breathing human is less of a "persons" than Lockheed Martin has gone badly awry.
Obama now faces two paths – the Clinton road, or the FDR highway. After he lost his healthcare battle, Clinton decided to serve the corporate interests totally. He is the one who carried out the biggest roll-back of banking laws, and saw the largest explosion of inequality since the 1920s. Some of Obama's advisers are now nudging him down that path: the appalling anti-Keynesian pledge for a spending freeze on social programmes for the next three years to pay down the deficit is one of their triumphs.
But there is another way. Franklin Roosevelt began his Presidency trying to appease corporate interests – but he faced huge uproar and disgust at home when it became clear this left ordinary Americans stranded. He switched course. He turned his anger on "the malefactors of great wealth" and bragged: "I welcome the hatred... of the economic royalists." He put in place tough regulations that prevented economic disaster and spiralling inequality for three generations.
There were rare flashes of what Franklin Delano Obama would look like in his reaction to the Supreme Court decision. He said: "It is a major victory for big oil, Wall Street banks, health insurance companies, and other powerful interests that marshal their power every day in Washington to drown out the voices of everyday Americas." But he has spent far more time coddling those interests than taking them on. The great pressure of strikes and protests put on FDR hasn't yet arisen from a public dissipated into hopelessness by an appalling media that convinces them they are powerless and should wait passively for a Messiah.
Very little positive change can happen in the US until they clear out the temple of American democracy. In the State of the Union, Obama spent one minute on this problem, and proposed restrictions on lobbyists – but that's only the tiniest of baby steps. He evaded the bigger issue. If Americans want a democratic system, they have to pay for it – and that means fair state funding for political candidates. Candidates are essential for the system to work: you may as well begrudge paying for the polling booths, or the lever you pull. At the same time, the Supreme Court needs to be confronted: when the court tried to stymie the new deal, FDR tried to pack it with justices on the side of the people. Obama needs to be pressured by Americans to be as radical in democratising the Land of the Fee (CRCT).
None of the crises facing us all – from the global banking system to global warming – can be dealt with if a tiny number of super-rich corporations have a veto over every inch of progress. If Obama funks this challenge, he may as well put the US government on e-Bay – and sell it to the highest bidder. How would we spot the difference?
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Comments
Obama has been a huge disapointment to those who believed the hype of change you can believe in. This, and other of your articles, have helped this reader understand just why he has failed to deliver as expected. The defunct system of democarcy as practiced in the USA has clearly played a huge role. Bankroll the candidates, lobby the hell out of them, and now this, the freedom fopr corporations to run political adverts during elections. Unbelieveble.
What he isn't telling you is that while Kenya Boy was putting on his usual smoke & mirrors on TV, his Citigroup-appointed treasury guy was being slapped around by US lawmakers of both parties on account of his insanely generous bail-out terms for AIG that enriched AIG's creditors at the expense of generations of taxpayers to come. To compound his felony, Geithner then pressured AIG to cover up what he did. You won't find anything about that in the Indy, though:
Not only was the Kenyan con man's entire economics team appointed by the bankrupt toxic-asset proliferator Citigroup, which received record bailouts and debt write-downs from Geithner in return, but Kenya Boy himself got the job thanks to an eleventh hour flood of donations - $150 million to be exact - from his Wall Street and other corporate bundlers, topped up with the ritual sacrifice of Lehman Brothers, a banker-provoked cataclysm calculated to scare blue-collar voters away from the GOP and into the arms of the Kenyan impostor. Hussein of Mombasa then immediately dumped trillions of debt-dollars into the pockets of Wall Street and the war industry (with his ever-expanding wars) while Obamaville tent cities mushroomed and grew all over the country.
Kenya Boy's work is done now. Nothing can bring those trillions back and there's no way to prevent their inflationary and bubble-generating effects. There's no money left for anything and it's only a matter of time before confidence in the economy and the fictitious "recovery" collapses, bringing on a second tsunami of recession.
I meant no disrespect when I wondered wether recent events were pointing to the decline of the U.S.
They were not offended,they said that they had been thinking the same thing.
Reading this article,you have to wonder if the great and the good in the U.S.A.,have seen the writing on the wall,and are asset-stripping.
I hope I am wrong,and that it is "Just a blip".
Did you just arrive on our planet or were you lost in a rainforest somewhere for the past two years?
In the 1960s, C. Wright-Mills warned of the power elite and cited Eisenhower's warning of the emergent military industrial complex. But it's not just some conspiracy theory- it's an enculturation process whereby people who access the key networks find themselves both upwardly and horizonatally mobile through them. Thus we get former generals sitting on the boards of the weapons corporations who own TV networks, and lobbyists changing places with government policy advisors: Yes Minister combined with Fear and Loathing in Las Vegas.
The network cultivates a common perspective on the world, including what is 'realistic' . It is accepted that everyone has an agenda and a price, and that the game rquires understanding of how to advance instrumental interests the realpolitik world . People in the network make their living from knowing how the sub-political rules underpinning all these institutions function and how to manipulate the system. But this is subliminal- it doesn't get in the State of the Union Address- not explicitly, anyway. It's not so much covert as an omnipresent subtext so deeply institutionalised that it's taken for granted as the normal machinations of a democracy.
SIGH
The Victorian era is alive and well in Britain. In emergency rooms, that is.
Please keep the advice coming. It makes me laugh so hard, and that really is the best medicine.
You evidently don't understand the issues, and take no notice of the evidence of similar 'victorian' diseases among the uninsured underclass in the US. Go and read some research on public health policy (not written by corporate lobbyists). If the US government's proposal to provide health-care for the poor is some kind of commie conspiracy as so many on the political right in the Sattes seem to suppose, perhaps you'd then be able to explain how the provisions in the US are superior to those of the NHS. The invisible hand has not worked, so what's your answer? let the tooth fairy sort 'em out, or just let the poor die on the streets (or Afghanistan?).
The new law on the other hand, gives corporations the tempting, but potentially dangerous option of running their own adverts. I say dangerous, because if you see a company blatantly lobbying against something you believe in, you can simply stop buying their products. Will they take the bait? Maybe, but maybe not.
Here is a reader's comment from the New York Times on 22 January:
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Why is everyone up in arms about the recent Supreme Court decision allowing corporations unfettered monetary access to the American election process? To me this is a golden opportunity, as now our elected officials can sell corporate naming rights to their seats.
The junior senator from North Carolina? He or she is now the Bank of America senator. The senior senator from Alaska could be the Exxon senator.
The politicians may never have to fund-raise again! Think of all the time that will save to actually legislate.
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The ONLY thing they are scared of is the Power of the People, but unfortunately, due to their propaganda and use of mind-games, the People are pounded into a rut of apathy, therefore they get away with crap more and more everyday.
We need to stand up to them and expose them for what they REALLY are. Corrupt psychopaths hell bent on World Control and depopulation to make the populous "..more manageable".
All facts that are easily found if you dig hard enough.
Not more anti-Semitic truth. Pulease!
In Britain, we are still thankfully a long way from this sort of corruption but the warning signs are there. For years, people have raised questions about the influence of trade unions over the Labour Party and Big Business over the Tories. But much of that is overt and the sums invovled relatively small.
What is worrying, is foreign-based businessmen like Lord Ashcroft bankrolling the Tories. Are they attempting to buy elections? Current legislation is thankfully bringing some transparency into spending by political parties on elections, but the warning signs are there.
When voting this spring, one question we should ask ourselves is who pulls the strings? Is the aspiring politician before us putting forward an honestly held view, or is he or she being paid to do so. Who yanks the chain, in other words?
US politics is an glaring example of how democracy can be tainted by the power of money. We mustn't let it happen here. The warning signs are there. We must heed them.
But the UK has one glaring difference with the USA regarding senators.
The UK's "senators" are the Lords of the House of Lords.
They are completely and utterly NON ELECTED/VOTED into office.
What I'm trying to say is that I don't know what is worse, elected senators who pander heavily to corporate lobbyists, or non elected "senators" who pander (though less than the elected ones) to corporate lobbyists.
that you can guage how corrupt a Western society is is the power of the Jews. Today in the US they run the whole shebang and the US is rotten to the core.
Regardless of who is put into the white house, the end result for the general public will be the same.
They are all bought by powerful corporations and organizations.
This is a huge success for the Bilderberg Group.
Pretend for a moment that it's true that their agenda is to ultimately lead a single global corporate nation, with a corporate army.
If you have that in your mindset, wouldn't this law then be a natural step to take towards that goal?
Call me a conspiracy theorist if you will, more and more evidence of some theories is brought into light daily.
NEVER let them take control of the internet! Because if they do, we're all doomed.
Internet is our salvation.
Re: They Are All Quite Wrong
Posted Friday 29th January 2010 05:40 GMT
That is Quite Correct, Will Godfrey. And when Profit is Money for Nothing and just an Arbitrary Additional Expensive/Expansive Figure on Production, will Value Decrease and Costs Increase, creating a Self Defeating Capitalist System, Delivering Everything at an Increasing Price with Everything Supplied at Inflated Costs to Provide Profit, until No One can Afford Anything because Everything is Unrealistically Expensive ........ because of Profitable Businesses Charging Money for Nothing and Creating Bubbles of Perceived Wealth based upon Nothing and only kept Artificially Alive by the Printing of Paper Currency?
A Classic, Catastrophic, Titanic Scale Ponzi as Run by the Capitalist Fractional Reserve Monetary System and Supported by the Global Banking Industry and Paper Currency Suppliers? And Everyone Knows that the Great Ponzi always Looks Remarkably Healthy, right up to the Time that Attention is Again Drawn to it, for Closer Very Public and Private Forensic Scrutiny by Media and IT, [Global Banking Crisis #1 moves on and Introduces No Changes to Destroy Systemic Risk and Exploit Vulnerability and thus Creates Global Banking Crisis #2 and Full Scale Economic China Syndrome Nuclear Cascade Type Meltdown], and then it Spontaneously Self Combusts and Implodes/Explodes as Panic Realisation Starts to Dawn with Sad and Sorry, Mad and Bad Investors vainly seeking Deeper Assurance of Product Viability and Future Security, and when Returning Rhetoric Fails to Fully and Unequivocally Convince, do they take Fright and Discover that Flight to Greener Systems Pastures with their Treasured Investments and Savings and Loans are Impossible, for the Cupboards and Vaults are Bare, with their Imagined Wealth having been Spent on Creating and Supporting the Lavish Lifestyles of their Trusted Friends, the Parasitic Worms.......... and all they are left with are IOUs and Promisory Notes/Treasury Bills/Gilts which Promise to Pay the Bearer on Demand ....... well, More of the Same appears to be the Present Regime's Arrangement.
What about a Change of Regimen .... and whatever happened to the Renegade's Presidential Promise of Change that Gave Renaissance Hope to Billions across the World and which Battles with the Parasitic Worms in the Great Ponzi .... that is Enslaving All to Toil for Profit and Controlling the Capture with Printed Currency .
A Little Something 42 Extraordinarily Render to Davos, this Darling Morning, El Reg?
http://forums.theregister.co.uk/for
I applaud the comments you have made in your article this morning (and often agree with the sentiments in your various posts). You are spot on to highlight the New Deal era as the last major occasion when the real issue was tackled in any serious way. FDR did, indeed, strike out at "the malefactors of great wealth" and "[welcomed] the hatred... of the economic royalists." However, he didn't go quite far enough.
He pump-primed the economy with massive government spending (in contradiction to the austerity measures that are usually demanded by those who have manufactured an economic crisis) but he still did it with money borrowed from the private banking cartels, ie. the Federal Reserve, and the consequences of this are playing out now with the massive government deficit. What he should have done (as Abraham Lincoln and Benjamin Franklin did) was to take away from the private bankers the right to issue the money supply as debt and have the Government issue its own money. This is the number one problem in the developed world today as the international banking cartel controls and siphons off the money supply to such a degree that there is never going to be enough for the rest of us, whether we are talking about public projects or personal well being. Everything is hamstrung by the power this gives Big Business.
Have you read 'The Web of Debt' by Ellen Hodgson Brown? If you have you know exactly what I am talking about (and, hopefully, can do more to publicise its arguments). If you have not, you must read it as you need to be armed with the information it contains if you are going to enter the debate on this topic. As a commercial lawyer I thought I knew what I was talking about vis-a-vis business/finance/etc until I read it. Did you know that the Federal Reserve is neither Federal (ie, it is privately owned) nor does it have any reserves (it 'creates' money out of nothing, as debt). Did you know about the fraud (as legally defined) that is 'fractional reserve banking', which is the basis of all the Banks' operations throughout the western world?
And its not some cranky conspiracy-type book; it's written by a top-line forensic attorney and referenced throughout with statements from senior political figures and banking officials (the latter being mostly people who speak out only after they've retired)
I wish you well and keep up the good work
True, true and China is building up it's strength and wealth, taking every industrial advantage that they can, payback time is coming, I sense the average US citizen will be the Coolie of the future. Sure America will get it's industry back, all the sweatshops and the satantic mills, filthy factories, no pensions and worse healthcare, whilst the emerging Asian middle classes glide into their glittering solar powered megacities in high speed trains.
And given Labour 05 attained 34/5% of the vote it is safe to assume the 60% of the PS who did not vote Labour still ensured their success by unwittingly donating (if indirectly) to their campaign.
The price for all this an economy that was already heading for the rocks long before the banking crisis, as one benefit after another went through parliament, oddly benefiting the public sector worker far more than private but then again the legislation is written by the public sector & some might feel for the public sector, I suspect the term vested interest never entered anyones head, somewhat simialr to the proposal the rest of us continue to work on until (death in reality) whilst the PS retire in the 50's & thats an official figure.
We could reduce the deficit at a stroke but we have to think of our donors/lobbyists don't we.
America, Republican, Democrat.
UK, Tory, Labour, Lib Dem
If your going to moan about this situation Hari why not tell people the truth, the reason for their 'perpetuity' is we keep voting for the bastards, Oh thats right your blinkers give as much balance to your articles as your lack of research, talk about a man with a mission.
Just another of the many Hari-ticles so unbalanced they fall off the press by themselves, although it is unusual to find one of his articles that has not so many quotation marks it borders on plagiarism, with the writer assuming the 'list' of quotes are accurate in their overview.
However this does have some advantages as the writer can fall into deep slumber in the knowledge their bank account looks rather healthy without too much effort very similar to the bankers he oft berates.
I think that the bank mafia cooperates with both of the two corruption machines.
With unending war and unbounded corruption, our future does not look good. Amvet
But the English should take no joy in American distress. We are two branches of the same tree. where we go England can not be far behind...
You also fail to mention that these corporations you hate so much actually own all the mainstream media in the USA - I didn't see you complaining about NBC, CBS, ABC and CNN and all the large newspapers spewing out hour after hour of fawning coverage of Obama during the elction campaign. Freedom of speech is for everyone, not just those you agree with.
Oh come off it – next you'll be saying they have two arms and legs and walk around like regular people...
I'm not sure there's anything so good and decent about believing in socialised medicine. Doctors, nurses and other hospital staff have to be paid. Drugs and medical equipment also cost money, as does the upkeep of hospital buildings. There's nothing too virtuous about saying "Yes, I'd like any and all medical treatment as and when I need it, but someone else can worry about paying for it all."
There are also practical problems with a state-run healthcare system. Once the government is paying for your medical treatment, it has an interest in making sure it pays out as little as possible. How long before it starts imposing limits on what lifestyle you can lead if you expect to get medical treatment? How long before smokers are denied treatment for lung cancer or heavy drinkers are denied liver transplants? The government in this respect is no different to a medical insurance company trying to limit its costs, except of course that, unlike with an insurance company, there isn't another one you can go to instead.
Then again, simply look at our cancer survival rates, or waiting times for routine operations, or any one of dozens of similar examples, compared to America's. Would you swap?
Finally, we come back to that old chestnut, state funding of political parties. Every time you write about this, you never acknowledge the real problem with it – not the money it would cost the taxpayer, but the limits that would be imposed on it. We live in an age when, unfortunately, the BNP has a London Assembly member and two MEPs. Will they qualify for this state funding? Will black and Asian taxpayers happily contribute to a party which is so inimical to their interests, and which (at time of writing) they wouldn't even be allowed to join? If not, where precisely will the line be drawn? Once state funding is only for some parties, not for all, what will the qualifying conditions be?
This is no hypothetical problem. The system of "groupings" in the European Parliament, on which so much funding depends, was drawn up precisely to exclude Eurosceptic parties, on the assumption that they wouldn't be able or willing to form groups with at least seven members from five different member states. Unable to ban parties that did not share "the European ideal", the Euro elites sought instead to place them at a huge financial disadvantage.
I'm afraid state funding of political parties imposes just as much of a bias on the political process as the current system.