If you share my belief that the major obstacle to the free society is the national-security/corporate state, 2016 is shaping up to be a year of apprehension. The Wall Streeters, who are among the biggest advocates of partnership between big government and big business, are looking forward to a presidential contest between Hillary Clinton and Chris Christie, a contest the bankers can't lose.
They have already discounted any populist rhetoric Clinton may need to fight off a primary challenge from, say, Sen. Elizabeth Warren. As "one well-placed Democrat" told Politico, "Wall Street folks are so happy about [having Clinton run] that they won't care what she says."
Clinton recently spoke to a gathering in New York organized by Goldman Sachs, the giant, influential (and bailed-out) investment bank, a gathering that Politico says was attended by "a few hundred major investors."
Ordinarily these masters of the universe might have groaned at the idea of a politician taking the microphone. In the contentious years since the crash of 2008, they've grown wearily accustomed to being called names — labeled "fat cats" by President Obama and worse by those on the left — and gotten used to being largely shunned by Tea Party Republicans for their association with the Washington establishment. And of course there are all those infuriating new rules and regulations, culminating this week with the imposition of the so-called Volcker Rule to make risky trades by big banks illegal.
"But," Politico continues, "Clinton offered a message that the collected plutocrats found reassuring, according to accounts offered by several attendees, declaring that the banker-bashing so popular within both political parties was unproductive and indeed foolish."
Striking a soothing note on the global financial crisis, she told the audience, in effect: We all got into this mess together, and we're all going to have to work together to get out of it. What the bankers heard her to say was just what they would hope for from a prospective presidential candidate: Beating up the finance industry isn't going to improve the economy — it needs to stop. And indeed Goldman's Tim O'Neill, who heads the bank's asset management business, introduced Clinton by saying how courageous she was for speaking at the bank. (Brave, perhaps, but also well-compensated: Clinton's minimum fee for paid remarks is $200,000).
She got one thing right: The politicians and big bankers "all got into this mess together." The financial and housing collapse of 2008 was the fruit of that malign partnership of big government and big business. (See my article "Wall Street Couldn't Have Done It Alone.") But the big banks are doing fine now, thank you, and there's no reason to think that too-big-to-fail is over. It's regular people who are still hurting.
So the bankers liked what they heard. Politico reports:
"It was like, 'Here's someone who doesn't want to vilify us but wants to get business back in the game,'" said an attendee. "Like, maybe here's someone who can lead us out of the wilderness."
Back in the game? That's a good one!
In Clinton, then, we have a friend of the bankers and a friend of the military-industrial complex, since as secretary of state she was an advocate of a muscular foreign policy, including intervention in Libya. (When she was in the Senate she voted to give George W. Bush a blank check to invade Iraq, and when she was first lady, she pushed Bill Clinton to drop bombs on the Balkans).
"And if the banking class is delighted with Clinton lately," Politico notes, "the feeling appears mutual."
Wall Street's first choice on the GOP side is apparently Chris Christie, the governor of New Jersey. He had his own meeting with the big-money crowd in July 2011. Politico calls him "the candidate with the best chances at winning the support of bankers in the next presidential election."
At that 2011 meeting: "Henry Kissinger [!], the former secretary of state, stood and pleaded with the governor to enter the presidential race for the good of his country. Christie would, of course, resist their pleas, becoming perhaps even more alluring to those on Wall Street as a prospect for 2016."
"I like him. I do. I think he's authentic, and I think he is a good manager and a good leader," Goldman's Lloyd Blankfein said of Christie at a recent Wall Street industry event, where he also praised Hillary Clinton.
So there you have it. The titans of Wall Street have a shot at a can't-lose 2016 election.
Who's surprised? The corporate state's roots go quite deep, having had a couple of hundred years to spread. It's easy to discount its pervasiveness because of the chronic public feuding between business, particularly big banks, and some politicians, but don't be fooled by this. The feud is more superficial than it appears. Roderick Long explains:
Those who see government power and corporate power as being in conflict, and those who seem them as being in cahoots, each have a point. The alliance between government and the corporate elite is like the partnership between church and state in the Middle Ages: each one wants to be the dominant partner, so there's naturally some pushing and shoving from time to time; but on the other hand the two parties have a common interest in holding down the rest of us, and so the conflict rarely goes too far. The main difference between "left-wing" and "right-wing" versions of statism, as I see it, is that the former generally seek to shift the balance a bit farther in favour of the state (i.e., toward state-socialism) while the latter generally seek to shift the balance a bit farther in favour of corporatism and plutocracy. (In the U.S., the reigning versions of liberalism and conservatism are arguably both more corporatist than state-socialist; but the liberals are still a few notches farther toward state-socialism than the conservatives are.)
This disagreement is useful in discouraging spectators from discovering the radical alternative to statism, the free market. Those with an aversion to state socialism will be drawn to the plutocrats, thinking they represent the free-market choice — hence the free-market rhetoric from people who want no part of the free market. Meanwhile, those with an aversion to corporate abuse will find the "statocrats" (Long's term) appealing, believing they represent the only alternative to plutocracy. You know who wins — and who loses.
Alas, not even Nelson Mandela could see beyond this rigged framework. (Apartheid, of course, was the negation of the free market.) He came out of prison sounding like a state socialist. "Two years later, however," the New York Times' Andrew Ross Sorkin reports, "Mr. Mandela changed his mind, embracing capitalism, and charted a new economic course for his country." Sorkin conflates "capitalism" with free markets, but he means corporate statism, or plutocracy.
Mandela's change of mind occurred in 1992 at the World Economic Forum in Davos, Switzerland, not a known hangout for advocates of the radically freed market.
"They changed my views altogether," Mr. Mandela told Anthony Sampson, his friend and the author of "Mandela: The Authorized Biography." "I came home to say: 'Chaps, we have to choose. We either keep nationalization and get no investment, or we modify our own attitude and get investment."… Mr. Mandela's push toward free markets [sic] opened up his country to become the fastest growing in Africa and eventually brought in billions of dollars of investment from large companies outside the country. Barclays, for example, acquired Absa, South Africa's largest consumer bank, in 2005. Iscor, the country's largest steel maker, was sold to Lakshmi Mittal's LNM in 2004. Industrial and Commercial Bank of China bought a big stake in Standard Bank, South Africa's largest financial services company, in 2008. And Massmart, a South African supermarket chain, sold a majority stake to Walmart in 2011.
Note the odd equation of the free market with an environment hospitable to big corporations. As Kevin Carson notes, "The same corporate interests retained control of the South African economy — but with newly rich members of the ANC leadership buying in and new black faces on the boards of directors."
The results? Some economic growth, but lately nothing spectacular. (Conventional measures of growth are highly misleading.) Meanwhile, Sorkin reports:
The gap between the haves and have-nots is now higher than it was when Mr. Mandela became president. Inequality in South Africa is a real and growing issue. South Africa's National Planning Commission has said that in 1995, the proportion of its citizens living below the poverty line of $2 a day was about 53 percent; the figure has gone as high as 58 percent and as low as only 48 percent. The official unemployment rate hovers at about 25 percent and may, in truth, be much higher. According to Bloomberg News, the average white household earns six times what a black one does. Among young black men, unemployment is close to 50 percent. Whites still hold nearly three-quarters of all management jobs.
Too bad Mandela never learned there is a radical alternative to both plutocracy and statocracy. I hope it's not too late for us.
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