Published:  12:46 AM, 11 January 2019

Return of the mafia state

Systems of governance that are seized by a tiny cabal, or a seemingly insignificant plot, are equally destined to become mafia states. Unhappily so, the early years-of Ronald Reagan and Bill Clinton in the United States-were marked by promises that the 'pillage' would benefit everyone. The later years-of George W. Bush and Barack Obama-were marked by declarations that things were getting better, even though these had continued to get worse.

The final years-of Donald Trump-have seen the lunatic trolls, hedge fund parasites, con artists, conspiracy theorists and the alleged criminals...drop all pretenses, and then 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 package 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 in the realm!

Did anyone care that the disgraced CEO John Stumpf, had left Wells Fargo with a pay package that averaged nearly $15 million a year. And, Richard Fuld who had received nearly half a billion dollars from 1993 to 2007, at a time in which he was engaged in bankrupting Lehman Brothers.

The list of financial titans, including Trump, who have profited from a rigged financial system and alleged deceptive practices, is quite endless. Many in the fabulous 'one percent' make money by using lobbyists and their 'purchased' politicians to write self-serving laws and rules, and by forming unassailable monopolies.

Did you care to notice when they pushed up prices on products or services, which these monopolies had provided? Or, that they lent money to the 99 percent of borrowers, at exorbitant rates of interest? Or, they used their control of government and the courts, to ship jobs from the United States to Mexico or China, where wages can be as abysmal as 22 cents an hour? And this practice has left American workers totally destitute!

Did we ever care to realize that Neoliberalism is simply, just another face of state-sponsored extortion? And, to put this bluntly, is also a vast, nationally orchestrated 'Ponzi' scheme.

This frenzied speculation and mounting inequality, was made possible by the two ruling political parties in the US. They have undeniably corroded the mechanisms of the institutions, which permitted democratic participation and provided some reliefs for workers. From Ronald Reagan on, politicians in the US were handsomely rewarded by their sponsors, for delivering their credulous supporters to the enchanting world of 'corporate guillotine'.

Thereby, this corporate coup had given birth to what we know as the 'mafia capitalism'. Economist Karl Polanyi had warned us, this version of mafia capitalism would only give birth to a 'mafia' political system, followed by 'mafia' culture. Financial and political power in the hands of institutions such as Goldman Sachs and the Clinton Foundation, has wound up exclusively as just another story, about personal gains.

In just a few weeks, the Obamas will begin to give us all, a transparent lesson into how service to the corporate state may likely be translated into bona fide steps, in a direction towards personal enrichment.

Adam Smith, the early 'political economist' wrote that profits were often highest in nations (that were), on the verge of economic collapse. These profits were obtained, he wrote, by massively indebting the economy. A 'rentier class', that is just composed of managers at hedge funds, banks, financial institutions and Corporations, has continued to make money not by manufacturing products, but from 'services' that include the control of 'economic rents' . To increase profits, lenders, credit card companies and others, continue to charge higher and higher interest rates. Or they continue to use their monopolies to gouge the public.

The pharmaceutical company Mylan offers a classic example. Two years ago, they raised the price of an epinephrine auto-injector, used to treat allergy reactions from $57 in 2007 to nearly $500.

The industry likes these 'profits', to be classified as 'economic growth'. And, please regard this as fiction, a sleight of hand, like unemployment statistics or the consumer price index that has been used to mask the speculative shell game.

Recently, the respected Economist Michael Hudson had reiterated that 'the head of Goldman Sachs came out and said that 'Goldman Sachs workers were the most productive in the world. That's why they were being paid what they were!'

The concept of productivity in America is income divided by labor. So if you're Goldman Sachs and you pay yourself $20 million a year in salary and bonuses, you're considered to have added $20 million to GDP. By any standards, this is enormously 'productive'.

'We are talking with the art of we know is but, simply repetition or verbiage' said Hudson, the author of the book, titled: Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy.

We are also talking with circular reasoning here. So the issue is whether Goldman Sachs, Wall Street and predatory pharmaceutical firms actually add product or whether they are just exploiting other people. That is why author Hudson, has used the word 'parasites' in his book's title.

People must imagine a parasite as simply taking money, or taking blood out of a host or taking money out of the economy. But in's much more complicated. The parasite cannot simply come in and take something. First of all, it needs to numb the host.

It has an enzyme, which confuses the host, to the extent that it does not realize the 'foreign' parasite is there. And then, the parasite has another enzyme that takes over the host's brain. It makes the host imagine that the parasite is part of its own body, actually part of itself and hence, needs to be protected.

That is essentially what Wall Street has done. It depicts itself as part of the economy. Not as a wrapper, waiting to be wrapped around it, not as something 'external' or an attachment to it. In reality, it is the part that is helping the body grow, and that actually is responsible for most of the growth. Unfortunately, however, it is only the parasite that is taking over the growth.

In Hudson's own words: 'The result is an inversion of classical economics'. So, amusingly, this has turned Adam Smith upside down. It says what the classical economists said, was unproductive parasitism while actually, it is the real economy. And that the parasites are the 'labor and industry' that get in the way of what the parasite wants, which is to reproduce itself, not help the host, that is, labor and capital.'

The established elites perhaps, dislike Trump because he is gauche, vulgar and boorish. He is not part of the refined group of mandarins, trained to become plutocrats in Ivy League universities, and business schools. He never mastered the (sickeningly) sweet glaze of refinement and carefully calibrated rhetoric, of our elitist class.

Trump and his unsophisticated team of near half-wits, half creators of deception, half racists and deviants, have continued to play the role of the 'Snopes' clan in William Faulkner's novels "The Hamlet," "The Town" and "The Mansion." If you may recall the story, the 'Snopeses' rose up out of a power vacuum of the decayed South, to ruthlessly seized control, from the clutches of aristocratic elites.

Flem Snopes and his extended family-which includes a killer, a pedophile, a bigamist, an arsonist, a mentally disabled man, and a relative who sells tickets to witness the bestiality-are fictional representations of the scum that have managed to reach the highest levels of the federal government.

They embody the ethos of modern capitalism, which Faulkner had warned us against. A critic Irving Howe had written: 'The usual reference to 'amorality,' while accurate, is not sufficiently distinctive and by itself does not allow us to place them, as they should be placed, in a historical moment. Perhaps the most important thing to be said is that they are what comes afterwards: the creatures that emerge from the devastation, with the slime still upon their lips.
Howe further wrote: 'They become presidents of local banks and chairmen of party regional committees, and later, a trifle slicked up, they muscle their way into Congress or the Politburo. Scavengers without inhibition, they need not believe in the crumbling official code of their society; they need only learn to mimic its sounds'.

The Snopes-like mentality of our president is portrayed in a documentary movie, "The Queen of Versailles," about another sleazy developer. The film, by Lauren Greenfield, chronicles the tawdry and insatiable greed of David Siegel and his 'gaga', trophy wife, Jackie, who is three decades younger. And their quest to build one of the largest private residences in the United States, a 90,000-square-foot mansion modeled after Versailles.

Siegel and his wife had reportedly once dated Trump. They are fervent Trump supporters. Siegel, resembles someone living in the style of Trump, but, otherwise, is barely literate, crude and offensive. He, also sponsored beauty pageants, and was accused of sexual assault made his money through high-pressure sales tactics and had access to hundreds of millions in bank loans. And he uses bankruptcy or the threat of bankruptcy to protect his wealth. And like our president he has a volatile and vicious temper.

The great Roman historians Livy and Plutarch blamed the decline of the Roman Empire on the creditor class being predatory in nature.

Hudson goes on to say 'The creditors took all the money, and would just buy more and more land, displacing the other people. The result in Rome was a dark age, and that can really, last a very long time. The dark age is what happens when the rentiers take over.'

If you look back in the 1930s, Leon Trotsky said that fascism was the inability of the socialist parties to come forth with an alternative. If the socialist parties and media did not come forth with an alternative to this neofeudalism, everyone is going to have a rollback to feudalism. But instead of the military taking over the land, as occurred with the Norman Conquest, 'they' seem to take over the land financially.

Finance has become the new weapon of warfare. As history has reflected, what follows next, history has shown, is not very pleasant. A cruel and morally bankrupt elite, backed by the organs of state security and law enforcement, will, as the Eupatridae did in sixth-century-B.C. Athens, bankrupt the citizenry through state-sponsored theft, war, austerity and debt peonage.

Together, they will reduce workers to the status of serfs or slaves. The most benign dissent will be criminalized and crushed. America's Snopes-like elites have no external or internal constraints. They are as good as the 'barbarians'. We will need to remove them from power, or enter into a new and a very dark age...for a long time!

The writer is a former educator
based in Chicago

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