As
Brill's sub-title indicates, this book charts the fall from
prosperity for the many in the U.S., the escalating concentration of
wealth, and the understaffed movement working to reverse this
development.
After
World War II. until about 1970, an uneasy partnership existed in the
U.S., where industrial owners and managers shared the prosperity of
that unique time with workers, thanks largely to the organizing
efforts of unions. This of course was limited, obviously and
disgracefully when it came to race. Various events coalesced to shift
this fragile contract against workers – free trade policies,
not necessarily intended to produce inequality, in fact
supported by unions at the time, in the early 60s; the southern
intentional bid to entice industry by maintainging a low-wage,
docile, non-union workforce; even lower-wage foreign sweat shops; and
automation and efficiency. The latter two features could
create leisure for all but in fact predictably diminish working
people and fatten the 1%.
Another
development contributed in a major way to the upward trajectory of
wealth, what Brill calls short-termism. Feeding into this was
a move from what he calls aristocracy to meritocracy. The successful
sent their children to Yale, Harvard etc; passing on an elite
leadership, while the working classes struggled in disadvantage. A
movement to “democratize” this situation, also in the 60s,
brought in bright working class students who, lacking a sense of
entitlement, tended to be driven and to outwork the entitled. Their
success led to inventive changes to the good ol' boy rules which
evolved into the short-term-ism Brill derides. It also predictably
evolved into this newly privileged group closing ranks to protect
their privilege via political influence.
A
few renegades are cited, isolated from the mainstream by ethnic
prejudice - one, a Jewish attorney named Lewie Ranieri,, sparked the
corporate take-over gambit that wrecked so many lives and businesses
but enriched, beyond their imagining, those willing to pursue
ruthless, short-term avenues. Buy-outs basically raped a company,
borrowing heavily to pump up stock prices, downsizing employees,
selling off marginal branches, facilities and equipment, grabbing the
profits and abandoning ship. Other actors aggressively marketed
mortgages to high risk customers, packaging and selling them to
investors (suckers) looking for a high return, in a frenzy of
profit-taking until the whole thing came crashing down in 2008. Wall
Street, always a gamble, became a high-flying casino with little
actually productive investment. Rather, short-term buying and selling
voraciously sought profits. Synthetic credit default swaps were like
side-bets, where investors bet a stock will rise or fall. Some made
millions betting, say, mortgage-backed securities would fail. When
they failed en masse they raked in the “winnings”. Sort of like
buying life insurance on your unhealthy neighbor with you as
beneficiary. After the deluge of course the fixed game proceeded to
bail out the gamblers with taxpayer money and leave stranded their
victims, homeowners in default and eviction, wiped out pension funds.
Given that the key financial people in the administration of W. Bush
and later Obama, were Wall Street players, the rescue package was
certain to be tilted toward that infamous street. One of the
culprits, in Congressional testimony, commented that “People are
driven to improve their lives and in a capitalist society you do that
with money.” A little hint here then as to where the problem lies.
The author makes an odd statement, asking us to not see the actors in
these schemes as, ”villians but as simply responding – many with
trail-blazing ingenuity, to the incentives put in front of them and
the culture of the times.” I wonder if he'd apply this same
generous dictum to the inner city gang banger? But he does advocate,
“changing the incentives and culture so that the genius of their
successors can be redirected.” We can hope I suppose.
Another
example is the firm Country Wide Financial, whose CEO, Angelo
Mozilo made $500 million in dubious deals, plus a $140 million
cash-out as he saw bankruptcy coming, and was eventually fined $67
million, no criminal charges. Not a bad result for him, but
collateral damage for the losers (suckers). A Canadian consultant
named Michael Pearson advised drug companies to cut research and
development, instead buying up small drug companies, hiking their
patented, critical meds to outlandish, predatory prices, running up
the stock prices and selling, with the winning strategy, “We'll be
gone before the crash.” Going off on his own he bought up with
borrowed money, a small drug company, merged with a larger, and over
8 years went on a buying binge which shot up stock prices, cooked the
books, created billions on paper, and, when it fell apart, accepted
an $11 million dollar severance package with his firing and
presumably laughed all the way to his next venture. Many of the
financial shenanigans leading to the 2008 disaster, were made
possible by the undoing, in the 90s, of the Glass-Steagull act, and
other regulations, designed to avoid risky investments like those
that brought us the 1929 crash and depression. It was argued that
this would jack up the creativity of our Wall Street geniuses.
Indeed. Later the Dodd-Frank bill attempted to address “too big to
fail” and other factors leading to the crash but the lobbyists
moved in. Thirtysix hundred lobbyists made $483 million working for
the financial industry that year and you can be sure this
tax-deductible expenditure paid for itself. The 1935 Social Security
legislation was 21 pages. Dodd-Frank was 848, much of it loopholes
inserted to please lobbyists who no doubt showed their appreciation.
Thus was it watered down and, more importantly, kept vague so that
once it was being implemented at the agency level, the lobbyists
could once again descend to have their influence. The public was so
incensed though that the Consumer Financial Protection Bureau got in
so it wasn't a complete bust.
Speaking
of lobbying, in a very competitive field for pernicious political
behavior the gun lobby has to be up there at the top. They were able
to stop a move to ban armor-piercing ammunition which of course would
pierce police vests. You'd think that the traditional conservatism
among police would get a little wake-up call from this, showing as it
does whose interests are really served by that brand of politics.
Another
important factor in the wealth transfer scheme we've been enjoying
these last 50 years, were the money-is-speech decisions which gave
business and wealthy individuals even more influence, ludicrously
burying that fact in high-sounding rhetoric about free speech and
“the people” needing information for democracy to work so
limiting information from the always benevolent corporate sector, it
was argued, violated the first amendment. Senators and
representatives spend fully 70% of their time raising money for their
reelection campaigns and of course they then owe “access” to
their donars. The line of thought claiming that if the public were to
finance elections then the politicians would owe the people not the
corporations, is derided as a “radical”, even “socialist”
intrusion on democracy. Let me put that in quotes, “democracy”.
A
significant moment in this evolution was a Chamber of Commerce memo
written by Lewis Powell which sounded the alarm about the threat to
the U.S. economic system by unions and other subversive groups in the
60s, Ralph Nader for example. The memo went viral, energizing the
“besieged” business sector, launching immense growth in the lobby
profession. Powell later was appointed to the supreme court and many
members of congress and other government officials found lucrative
early or post- retirement careers in the profession (would
objectivity be violated if I called this slimy?).
It
strikes me how current Brill's book is. A book of this depth and
literal weight, it seems, would take a long time to write and be
somewhat dated but he frequently refers to very recent events, in the
Trump administration particularly. Despite a few instances where the
author seems a bit naïve about the forces gathered here (he seems
unaware of Jane Meyer's assertion, in Dark Money, that the
powers that be in the 30s put together a successful campaign to
promote capitalism and demonize socialism in the public mind), the
book is chock full of useful information and suggestions for draining
the, ah... quaqmire. It would be an understatement to say that is a
worthy project. Brill suggests that things have gotten so bad that
there just might be an appropriate response in the form of, not left
against right but “...everyone becoming personally accountable for
what they do and share in their responsibility for the common good.”
He lays out instances of this kind of thing already happening,
providing a kind of hope in that and in his calling for more.
Drawing by the author
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