Our Economic System Is No Longer Capitalism

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The battle of ideologies currently raging in America produces an attack from the left on everything that can be gathered and apprehended in a basket labelled with the catch-all term “Capitalism,” — catch-all  because what it refers to in today’s America can hardly be identified as Capitalism.

Wall Street Bull

 

For the most part those who attack industry, or too-big-to-fail businesses, or too-big-to-fail banks, or small to medium organizations, simply don’t understand the lexicon which yields their talking points.  They supposedly despise “big money” and yet the biggest bankers have financed the election campaigns of their party’s leader, the President — the end justifies the means, perhaps?  Those very same bankers have bought the influence of the Clintons through hundreds of millions in donations to the Clintons’ foundation, but don’t ask about the real purpose of Hillary’s traipsing all over the world while wearing the Secretary of State badge on her lapel.  All of Congress is guilty of capitulating to the wealthiest structures of society and even to foreign financial interest whether coming from banks, or from potentates such as those ruling Saudi Arabia.  Influence is for sale.

Senior bankers have bought the best seats at the table of government — Goldman Sachs for example has so intertwined itself into the fibre of U.S. Governance, it is impossible to distinguish any dividing lines which might inform us as to control, or if those divisions even exist.

Bankers long ago took control of America’s largest corporations. One of their powerful tools was the stock markets. First they changed corporate governance structures across all US businesses.  For example:  Once upon a time, in all medium, large and enormous companies, corporate management, including the Presidents, reported to independent Boards of Directors which included a Chairman, but the Chairman was not CEO. Gradually the magic wand of Wall Street created a new norm — CEOs would be anointed and everyone, including the Boards, would kiss their rings.

CEOs became America’s royalty, each responsible to himself. Egos had an open field.  IPOs became the desired exits for investors and made senior managers wealthy.  Bankers negotiated/dictated to the CEO what the deal would be and how it would be structured.  Bankers controlled the stocks and controlled the daily lives of senior managers.  They wanted CEOs to worry about stock price fluctuations — “The market needs an announcement,” or “You need an acquisition and we know one that will fit just fine.”  Bankers made hundreds of billions of dollars in fees, consulting and structuring, pretending that their work was a complex craft bordering on being a black art, requiring brilliance. One need not look very far up the hierarchy of primate intelligence to find capacity to be a banker —  spider monkeys, is high enough.  Although, spider monkeys, while instinctual and self-serving, seem to not be quite so ruthless.

Their schemes made life of the “banker” so much easier.  One guy to manipulate is so much easier than a crowd.  Want to do a new stock offering? The CEO will agree. Why? “Because we bought him with another offering we issued, and hey, we made sure he was loaded up with millions of options and we decide what the price is and when he can sell.  Yup, that CEO will do our bidding.”  Salaries, bonuses and stock options went through the roof, as we witness today. The more a CEO made, the more he was in the clutch of bankers.  No insane amount of cash seems too much these days.  Is the media full of incredulity when the CEO of a hedge fund pays himself $5 billion in one year?  Does it make any sense?  Well, to him and to his friends it does. But look, he donated a few million to a foundation everyone’s heard of, so what a great citizen.

Bankers already controlled The Fed and all central banks, however, while they were getting control of government, they also took control of the largest segments of the private sector.

The biggest bankers of Wall Street changed the economic landscape of the developed world forever.  American Capitalism became Financial Capitalism, and this Financial Capitalism can also be correctly ascribed the term Crony Capitalism.  A few individuals control the game, and control it unforgivingly.  Bankers deliver very little productive contribution to society, and yet they are now firmly in charge of our present and our horizon, with fawning media applauding and heralding their triumphs.

Bankers have morphed themselves into the single most destructive force in our modern societies, and average, hard working individuals have been placed under yokes of debt which cannot be repaid.  A mountain of excessive credit sitting on a system of fractional reserve banking, or fractional deposit lending, is not required for a free market system.  It is counter productive and counter constructive. Unable to grasp the nature of the catastrophe they have produced, their answer is to throw more trillions into the already excessive bonfire of debt, serving nothing and no one but themselves.   This is NOT capitalism and should not be misinterpreted as such.  We are in a new century of Financial Capitalism.

America is in urgent need of entrepreneurs and the progress, the jobs, and the wealth they infuse in society.  It must first jettison the influence that the too-big-to-fail banking and corporate leaches have secured to abuse willing politicians, while doing nothing to encourage and inspire a population yearning for encouragement and freedom to energize its creativity.  This will not come about with imposition of more regulation, such as ignorants like Yellen and the Administration call for to “feed” the ideologically dependent, and to appease Democrats.   Growth will come with changing the nature of the banking system, bringing back an understanding of Savings, promoting the positive effect of limits on Debt so that we don’t steal from our grandchildren while creating an artificial present, limiting all purchase of influence that comes from corporate funding of political campaigns, and putting an end to graft that comes from lobbying.

Why are bankers and politicians so determined that our grandchildren NOT have a better life than we do?

Let’s allow Capitalism to function effectively, instead of the system now enabling bankers to suck the oxygen out of society.

 

Postscript:

Yesterday Yellen (The Fed Chair) told the American people, “Central bank independence in conducting monetary policy is considered a best practice around the world,”

Translation, “We don’t want an audit, and won’t allow you to conduct one. We know better what’s good for you.  Get lost.”

Who’s in control again?

A constituent of the vast baby boomer generation with a career which has been fortunate to know the ponderous corporate worlds, as well as the intimately pressurized, and invigorating entrepreneurial domains of high tech and venture capital, I have harvested my share of mistakes meandering through corridors of enterprise from Silicon Valley, to London and endless, colourful, sometimes praetorian points in between. The voyage has provided an abundance of fodder for a pen yielding to an inquisitive keyboard, a foraging mind, and a passionate spirit. Whether political or business or social or economic or personal, is it not all political? It is a privilege to write, and an even greater privilege to be read by anyone, and sometimes with the wind at my back the writing may occasionally be legible. I do not write to invite scorn, nor to invite respect, but if I get really lucky the writing can stimulate thinking. I also write for the very selfish purpose of animating my own processes, and engaging the best of what life offers. Above all, whether biting fire or swatting shadows, I am grateful to be gifted the freedom to write and publish whatever flows down to the keyboard. To all those who enabled this freedom, and to all those standing guard to preserve it, I am indebted.

8 Responses to “Our Economic System Is No Longer Capitalism”

  1. 1

    Skook

    author

    JR, this was brilliant. I have never understood the power of bankers; yet, you have aptly described the phenomenon in a few paragraphs.

    The ugliness of the Clintons with their sanctimonious foundation, that serves to keep them living in the elite circles of money and influence, has become the template for others to “Play” the system and play the rest of us for fools.

    Please consider an expose on the business of foundations.

    Well done, JR, well done indeed.

  2. 2

    James Raider

    author

    @Skook: #1
    Thank you for the positive note. It took about 40 years for bankers to complete the process of “taking” corporate America. Obviously they used many tactics, but I think the sampling above give a sense of their use of that powerful motivator — Greed.

    Others were part of the incestuous maneuvers, like the largest Head Hunting firms — making sure the “deals” they negotiated for their clients with Boards and CEOs were seriously Rich, “The more you pay him, the more you’ll have to pay yourself.” After all, you can’t have a CEO making less than a President or VP, can you?

    Still, bankers were at the epicentre of it all, manipulating the strings. Most CEOs have no grasp of the stock market or how it’s rigged. They are told what to do by their senior bankers, and when to do it.

    That also had much to do with the larger corporations, moving away from Long Term thinking and long term visions. Bankers pushed them to think in 30 day terms. Too many large corporations don’t have independent and visionary CEOs. Wall Street doesn’t want them. We have witnessed the carnage which this has caused across the country.

    As you know, too many “foundations” are simply feel-good vehicles serving vanity more than anything else. They produce acclaim which washes some of the unsavoury odour of extreme wealth. Some foundations like Gates’ seem to “intend” to do some good, but so often miss the mark completely such as Gates’ incomprehensible Common Core effort. He’s done some good trying to eradicate malaria, but on the other hand, he’s misguidedly spent billions on things like genetically modified foods such as corn that he thinks will feed arid corners of Africa – and instead of developing arable land perhaps through dispersions of crushed shale (as example), he brings artificial fertilizers, pesticides, etc..

    Some, like the convoluted Clinton deal, isn’t a foundation financed by its wealthy founder, but is financed by collecting cash from those who want access. Reports indicated recently that only 10% of the Clinton $2 Billion cash raised actually went to where the rubber meets the road. This mismanaged foundation serves its 3 owners lifestyle. There’s little question that the Clintons sell “access,” as Forbes quite effectively described in an article a few years back — just multiply that article x 10. Dictators and kings love Billy so he provided access to deal makers looking for natural resources etc., and Hillary flowed right along that track when she became Secretary of State.

    It’s hard to do the right thing right. You’re an entrepreneur, Skook, with knowledge and expertise which society needs, and you are exactly what America has to invigorate in order that many, many, more grow, become productive and produce jobs, . . . or Vince who is launching a new business trying to break through with a new service to fill a need he’s uncovered.

    We don’t need more whining narcissists implementing bigger government intrusion into our lives, supporting bankers who have turned the people of North America and much of the Western world into an “Indentured Species.”

  3. 3

    Skook

    JR, there is a serious book lurking in your commentary. I will help you with initial or rough editing. I would be glad to help as a favor. I am not a finish person, but I am fast. Please consider it as a possibility.

  4. 4

    James Raider

    author

    @Skook: #3
    Skook, you’re being too kind to my rants. I really appreciate your generous and unselfish offer and promise you that I will take time to seriously think about your proposition and encouragement.

    I’ve written other books which I’ve begun to put out there on Amazon etc., — it is a very tough go, very time consuming, and editing is actually the most difficult and challenging part, so I am really grateful for your offer.

    One of the elements I most value in FA is being able to contribute a stream of consciousness which may or may not be coherent, or even welcomed, but hell, it’s enjoyable just to deposit some thoughts that with luck may alter percepts. I know that a book takes on a life and demands of its own, nevertheless, I’ll think about maintaining the “process,” from writing articles to writing a book. Bottom of my heart, . . . thank you for offering your time and talent.

  5. 5

    Ditto

    @James Raider:

    A good read James. However I would argue that what is missing from your analysis is that, (rather than encourage middle class entrepreneurship, ingenuity, and the profitable capitalism it creates,) those in the financial hierarchy are all over the world doing everything they can to break the middle class. We have a business environment where mergers, takeovers and the eventual creation of competition absorbing behemoth monopolies are seen as good things. (if you check the boards of directors, you often find a network with same people rubbing elbows on multiple corporate boards of so called “competitors”,)

    My theory is that the end plan of these globalist elite is not to push global financial capitalism at all, but to create a carefully reined one-world-governemnt ruling body enacting and supporting global feudalism, with governments headed by political elites hand-picked, nurtured and put into power by the wealthy world elite. These possible (near future?) overlords would not care one whit what form of political central control the anointed nation-state leaders rule by, so long as they keep the serfs in control. Of course those who might threaten the overlords status quo, must needs be discovered, disabled or destroyed through either a controlled press or other nefarious means. The internet will also have to be stringently controlled to stifle free thought or possible threats, which also requires massive information gathering and processing to identify those who would be a threat.

  6. 6

    James Raider

    author

    @Ditto: #5
    Ditto, I suspect we agree on the broad stokes of the process and the end game.

    My premise is that at the pinnacle of the hierarchy sit the bankers. On the corporate front, CEOs have in large part been convinced that rapid market capitalization rise of their companies is achieved through mergers and acquisition rather than through market penetration. Along with size, comes political influence. So we agree. Who’s pulling all the strings? Bankers.

    Our world has over the past 50 years been convinced of consumerism through big debt. We probably agree that the EU should never have been formed, but it portends the banker’s goal of omnipotence.

    Whether or not all or some bankers care about forming one world government, is moot IMHO, when they we see what the EU experiment delivered. They’ll continue to work on using money to spread control, not really caring who’s in political seats of power. They’ll manipulate as they are doing in Washington quite effectively.

    When a nation gives up control over its currency, it surrenders the last vestiges of its culture. Europe is learning this the hard way. Bankers in Brussels through the ECB pretended otherwise when they sold the concept — “we’re not controlling you politically, you’ll be independent, but you’ll just have a common currency and free movement of goods and people. What’s so bad about that?”

    There are wing nuts who promote a world government concept, however, the abject failure of the EU experience has curtailed their wet dreams. This Admin has tried hard to increase the power and reach of the UN, but that won’t float far down the river. The concept of imposing heavy new billions in taxes on the American public, to be distributed to dictatorships around the world is unlikely to gain any more support than the support it’s received from sycophants and unquestioning media. The taxpaying public isn’t biting.

    Your point on the Internet is a good one — a new Internet Tzar extruded from nauseating minds like those of Jarrett and Obama is a sly, underhanded and dangerous thing. Big companies in that space will be afraid of retaliation, just like Google and Yahoo caved to the Chinese communists. This is going to be a very big affront to freedom, and yet so few understand it, and the media isn’t terribly upset. Sigh!

  7. 7

    Rasputin

    You just figure this out now? The economic system hasn’t been “Capitalistic” in over a hundred years.

    Your Nation is a joke…the land you grew up in doesn’t exist any more and if you had balls you’d do something other than bitch about it.

  8. 8

    Rasputins Conscience

    Rasputin

    It is very obvious that you are unaware of what the word “blog” means. So I took the liberty of looking it up for you.
    Blog:
    A Web page that serves as a publicly accessible personal journal for an individual. Typically updated daily, blogs often reflect the personality of the author.

    Blog:
    Freedom of expression written chronologically.

    Welcome to America! It isn’t my nation, your nation or the writers nation. It’s OUR nation and a nation that says we have something called….Freedom of speech!

    So rather than bitch about someone talking about truth possibly you should open your own blog and let some steam out. Probably would do you some good.

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