The Quiet Coup-How the financial industry took over the government

[kpete]

..... a description of how the financial industry took over the government, much like in most banana republics, and how the only way to properly wind this down is to shrink the power and influence of the industry, as would be done in any other emerging country when the bankers grow too big and the elites start stealing everything. This is must reading

http://www.dailykos.com/storyonly/2009/3/27/713563/-If-you-read-one-article-about-the-financial-crisis...

The Quiet Coup

May 2009 Atlantic

The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.

by Simon Johnson

One thing you learn rather quickly when working at the International Monetary Fund is that no one is ever very happy to see you. Typically, your “clients” come in only after private capital has abandoned them, after regional trading-bloc partners have been unable to throw a strong enough lifeline, after last-ditch attempts to borrow from powerful friends like China or the European Union have fallen through. You’re never at the top of anyone’s dance card.

....................

But I must tell you, to IMF officials, all of these crises looked depressingly similar. Each country, of course, needed a loan, but more than that, each needed to make big changes so that the loan could really work. Almost always, countries in crisis need to learn to live within their means after a period of excess—exports must be increased, and imports cut—and the goal is to do this without the most horrible of recessions. Naturally, the fund’s economists spend time figuring out the policies—budget, money supply, and the like—that make sense in this context. Yet the economic solution is seldom very hard to work out.

....

http://www.theatlantic.com/doc/200905/imf-advice
4 pages

[midnight]

1. Can't we just send these jobs to other countries to have our

accounting done, or import foreign workers. I'm sure that would get things under control quickly.

[Lasher]

2. Great idea! And how about massive tax cuts for the richest among us?

They would use the extra money to create high paying jobs for all. And with all the resulting prosperity, government refenues would be greater than before!

[glitch]

3. Wow, good article and kos thread, thanks for posting. K & R nt

[BlueIris]

4. Frightening and fascinating. nt

[malaise]

5. Excellent article

K & R

[leveymg]

6. So someone finally figured it out, we're being "restructured"

Bad karma comes back to bite America. Thank Wall Street. Get used to austerity, or fight back.

[inna]

7. this says it all:

"But there’s a deeper and more disturbing similarity: elite business interests—financiers, in the case of the U.S.—played a central role in creating the crisis, making ever-larger gambles, with the implicit backing of the government, until the inevitable collapse. More alarming, they are now using their influence to prevent precisely the sorts of reforms that are needed, and fast, to pull the economy out of its nosedive. The government seems helpless, or unwilling, to act against them."

rec'd!

[burythehatchet]

8. /

[specimenfred1984]

9. Great article: "break the oligarchy" is exactly right

In gov't, the banking sector and health care sector/insurance sector. The U.S. is way too corrupt.

[Kaleko]

10. This nails it. Recd.

[bluesmail]

11. It can't happen here.

:evilfrown:

[Gin]

13. The government seems helpless, or unwilling, to act against them.

says it all (IMO)

[acmavm]

18. Dammit, you took my post. But I'm glad you caught it too.

[tomp]

12. since when has finance capital not been in control?!?! nt

[MadHound]

14. Nice article, better late than never I suppose

The signs of this corporate takeover became obvious during the eighties, under Reagan/Bush. One could simply have thought it was a Republican abberation(after all, they are the party of big business), but Clinton came in and continued to enable the takeover of government and this country by the financial sector. Hell, he deregulated the financial sector more than Reagan did. Bush the Idiot was just more obvious than the others, and Obama looks like he's going to continue in the grand tradition of Clinton, talking a good populist game while handing more and more of the keys to our country over to Corporate America.

It just goes to show that we're living under the two party/same corporate master system of government.

[Name removed]

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[WillyT]

16. Must Read !!!

:kick:

[azul]

17. The financial-governemnt incest produced a monster that keeps kicking

our dead ass for more debt opportunities. Oligarchs in charge of policy and regulations is what we get for glorifying the professional crooks and gamblers, and allowing their influence into government.

From p.2 of article:


Instead, the American financial industry gained political power by amassing a kind of cultural capital—a belief system. Once, perhaps, what was good for General Motors was good for the country. Over the past decade, the attitude took hold that what was good for Wall Street was good for the country. The banking-and-securities industry has become one of the top contributors to political campaigns, but at the peak of its influence, it did not have to buy favors the way, for example, the tobacco companies or military contractors might have to. Instead, it benefited from the fact that Washington insiders already believed that large financial institutions and free-flowing capital markets were crucial to America’s position in the world.

One channel of influence was, of course, the flow of individuals between Wall Street and Washington. Robert Rubin, once the co-chairman of Goldman Sachs, served in Washington as Treasury secretary under Clinton, and later became chairman of Citigroup’s executive committee. Henry Paulson, CEO of Goldman Sachs during the long boom, became Treasury secretary under George W.Bush. John Snow, Paulson’s predecessor, left to become chairman of Cerberus Capital Management, a large private-equity firm that also counts Dan Quayle among its executives. Alan Greenspan, after leaving the Federal Reserve, became a consultant to Pimco, perhaps the biggest player in international bond markets.

These personal connections were multiplied many times over at the lower levels of the past three presidential administrations, strengthening the ties between Washington and Wall Street. It has become something of a tradition for Goldman Sachs employees to go into public service after they leave the firm. The flow of Goldman alumni—including Jon Corzine, now the governor of New Jersey, along with Rubin and Paulson—not only placed people with Wall Street’s worldview in the halls of power; it also helped create an image of Goldman (inside the Beltway, at least) as an institution that was itself almost a form of public service.

[bluesmail]

19. I flashed on John Perkins Confessions of an Economic Hit Man

I wonder if he ever thought it could happen here. I have great respect for him confessing. I wonder what he thinks of this quiet financial coup.