The Crash of 2016

by Thom Hartmann

  And these death sentences are ordered by technocrats, who are coldly overseeing massive transfers of wealth from the hands of the people to the hands of the Economic Royalists. They won’t settle until all of Greece is turned into Europe’s Disney World and the Coliseum and Parthenon are Lloyd Blankfein’s new mansions.

  These events in Europe prompted New York Times editorialist Ross Douthat to make this observation about the theft of democracy in an op-ed in November 2011 titled, “Conspiracies, Coups and Currencies.” He wrote, “[F]or the inhabitants of Italy and Greece, who have just watched democratically elected governments toppled by pressure from financiers, European Union bureaucrats and foreign heads of state, it evokes the cold reality of 21st-century politics. Democracy may be nice in theory, but in a time of crisis it’s the technocrats who really get to call the shots [italics added].”131

  It Spreads

  When the people of Greece saw Papandreou ousted, most were unaware of the bigger picture of what was happening all around them.

  Similarly, most of us in the United States were equally ignorant when, in 2008, despite the switchboards at the US Capitol crashing under the volume of phone calls from constituents urging a “no” vote, our elected representatives voted yes at the behest of Bush’s treasury secretary, Henry Paulson, and jammed through the biggest bailout of Wall Street in our nation’s history.

  Steadily—and stealthily—Goldman Sachs and other banking elite were carrying out a global coup d’état.

  There’s one tie that binds Lucas Papademos (the man who replaced Papandreou in Greece in 2011), Henry Paulson in the United States, and other prominent technocrats in important financial posts around the world, and that’s Goldman Sachs. All were former bankers and executives at the Wall Street giant, all assumed prominent positions of power, and all played a hand after the global financial meltdown of 2007–08, thus making sure Goldman Sachs and the rest of the Wall Street ilk weathered the storm and made significant profits in the process.

  The British newspaper The Independent reported in early 2012 that conservative technocrats who are currently steering or who have steered postcrisis fiscal policy in Greece, Germany, Italy, Belgium, France, and now the United Kingdom all hail from Goldman Sachs. In fact, the head of the European Central Bank itself, Mario Draghi, was the former managing director of Goldman Sachs International.

  And here in the United States, after Treasury Secretary and former Goldman CEO Henry Paulson did his job in 2008 securing Goldman’s multibillion-dollar bailout, he was replaced in the new Obama administration by Tim Geithner, who worked very closely with Goldman Sachs as head of the New York Fed and made sure Goldman received more than $14 billion from the bailout of failed insurance giant AIG.132

  As the Daily Kos summed it up in November 2012, “The normal scenario usually involves helping a nation hide a problem and sell its debt until the problem blows up into a bubble that bursts in a spectacular way… Goldman Sachs then puts their ‘man’ into a position of power to direct the bailouts so that Goldman gets all its money back and more, while the nation’s economy gets gutted.”

  We no longer have an economy that’s geared to benefit working people around the world; we have an economy that’s geared to exploit them for Wall Street profits.

  Trader Alessio Rastani told the BBC133 in September, before Goldman’s Lucas Papademos was installed as Greece’s prime minister, “We don’t really care about having a fixed economy, having a fixed situation, our job is to make money from it… Personally, I’ve been dreaming of this moment for three years. I go to bed every night and I dream of another recession.”

  Rastani continued, “When the market crashes… if you know what to do, if you have the right plan set up, you can make a lot of money from this.”

  And as we’ve seen over the last decade, the bankers know exactly what to do. They’ve had the right plan set up, and it’s nothing short of a global coup d’état.

  As Rastani bluntly told the BBC, “This is not a time right now for wishful thinking that governments are going to sort things out. The governments don’t rule the world, Goldman Sachs rules the world.”

  Little Dictators

  The people of Michigan know very well what the people of Greece are going through.

  What’s disguised as technocracy in Europe is a shadow corporate government in the United States (described in chapter 8), steadily working to undermine our current democratic government. And, just like in Europe, making sure that whatever wealth is left postcrisis gets sucked up by the Royalists.

  I was speaking to Reverend David Bullock, the president of the Rainbow/PUSH Coalition in Highland Park, Michigan, about what life is like under Governor Rick Snyder’s new “Emergency Financial Managers” law.

  The law—which has technically been on the books since the late 1980s, but was broadly expanded in 2011 when Republican Rick Snyder took over as governor—allows the governor of Michigan to appoint “financial managers” to take over cities that are struggling in the wake of the financial crisis.

  These financial managers selected by Michigan’s governor are typically paid six-figure salaries and have enormous power. They can fire local elected officials, stripping entire populations in places such as Highland Park of their voice, and their vote, to determine the best policies for their own community.

  They can break contracts, especially union contracts with local police, firefighters, and teachers. They can sell off the city’s assets—the commons—to corporate interests at a fire-sale price, such as what happened in the city of Benton Harbor. There, under the control of a “financial manager,” a ninety-acre Lake Michigan waterfront park (a part of the commons that’s enjoyed by mostly low-income kids in a minority neighborhood) was sold off to real estate developers, who wanted to build a golf course resort for the affluent white neighborhood across the river. And worse, Governor Snyder’s managers can completely redo local budgets without any input from local elected officials.

  In other words, they can do on a local level all the things austerity-obsessed technocrats can do in Europe.

  “This is a state takeover,” Reverend Bullock told me. “The vote does not count—it’s null and void. We’ve got Michigan, the new Mississippi, where liberty is being lynched.”134

  Snyder’s “financial managers” had been installed to replace democratically elected officials in the cities of Flint, Ecorse, Benton Harbor, Pontiac, and Reverend Bullock’s Highland Park.

  “What’s it like to live under tyranny? What’s it like to live under dictatorship?” Reverend Bullock asked rhetorically. “How about no police officers? How about limited firefighters? How about taking streetlights out of cities so that people are in the dark from five p.m. to roughly eight a.m.? How about living with low morale and despair?

  “This is about dismantling democracy,” Reverend Bullock concluded.135

  In November 2012, organized people of Michigan gathered enough signatures to put Governor Snyder’s little-dictators law on the ballot for repeal. And voters did indeed repeal the law in that election.

  But at the beginning of 2013, the Republicans in the Michigan state legislature passed a carbon copy of the law, Snyder signed it, and it was again back on the books, against the people’s will. Within months, Snyder announced he deemed the entire city of Detroit to be in a “financial emergency” and appointed one of his little dictators to oversee the city’s deconstruction.

  One-half of the entire black population in Michigan is now shut out of democracy and under the control of these “financial managers.”

  Reporter Andy Kroll at Mother Jones magazine traces the origins of this law to the Mackinac Center for Public Policy, noting, “the free-market-loving center published four recommendations, including granting emergency managers the power to override elected officials (such as a mayor or school board member) and toss out union contracts. All four ended up in Snyder’s legislation.”136

  The Mackinac Center is affiliated with the Heritage
Foundation, one of the many Royalist think tanks spawned from the Powell Memo, and the Center has received tens of thousands of dollars in funding, that we know of, from the Koch brothers.

  When corporate-funded think tanks are doing the work of our democratically elected lawmakers, there’s something seriously wrong.

  The ALEC Shadow Government

  For more than a decade, Marc Pocan (now a member of the US House of Representatives) was regularly elected every two years by his constituents in the Seventy-Eighth District of Wisconsin to represent their interests in the Wisconsin State Assembly. In fact, he won 93 percent of the vote in his first bid back in 1998.

  But, Representative Pocan soon learned, in Royalist America, there’s no place for him, or his constituents, in government anymore.

  Pocan realized this when he attended the annual convention of the American Legislative Exchange Council, better known as ALEC, down in New Orleans back in August 2011.

  Established in 1973, ALEC claims on its website that its mission is “to advance the Jeffersonian principles of free markets, limited government, federalism, and individual liberty, through a nonpartisan public-private partnership of America’s state legislators, members of the private sector, the federal government, and general public.”137

  But Representative Pocan had a different take on ALEC. “Literally, it’s a dating service setting up corporate lobbyists and state legislators,” he told me. “The culmination is the passing of special-interest legislation.”138

  Over the past few decades, the job of writing and passing legislation, which used to take place in the halls of state governments across the nation and in Congress by lawmakers who were elected by the people, has been outsourced to—or hijacked by—ALEC.

  And contrary to any definitions of democracy we were taught in school, less than half of the policy makers of ALEC are actually elected officials. The majority are very, very wealthy corporate interests residing in the top 1 percent who are trying to occupy the thrones once belonging to feudal lords.

  State representatives such as Mark Pocan and other members of Congress can join ALEC for an annual membership fee of $50. Currently there are about two thousand members of ALEC who are elected officials and they make up less than 2 percent of the organization’s annual funding, which in 2009 was nearly $7 million.139

  The majority of policy makers within ALEC are corporate executives and lobbyists, who pay a membership fee of between a few thousand dollars and as much as a couple hundred thousand dollars, depending on how much influence they want within ALEC, plus annual dues. That’s where ALEC gets roughly 98 percent of its funding, along with stand-alone, hefty corporate, foundation, and personal contributions. For example, at the 2011 convention, BP—fresh from its oil catastrophe in the Gulf—was at the top of the list of donors to ALEC, likely dishing out as much as $100,000.140 Other donors included ExxonMobil (the most profitable corporation in the history of the world), Shell, Chevron, Wal-Mart, Visa, and a name Americans have increasingly come to know: Koch Industries.141

  All that money dished out by all the corporations buys them equal standing in the ALEC “democracy.”

  In the same way state and federal governments divide their work into committees (such as the House Energy and Commerce Committee in Congress, or the Public Health and Public Safety Committee in the Wisconsin State Assembly), ALEC also breaks up into committees—or what it calls “task forces.” There are seven of them in total, involving all the same areas congressional committees cover:

  Commerce, Insurance, and Economic Development

  Communications and Technology

  Education

  Energy, Environment, and Agriculture

  Health and Human Services

  International Relations

  Tax and Fiscal Policy

  Within each ALEC “task force,” both elected legislators and corporate lobbyists are represented equally—fifty-fifty. The two sides sit together and then discuss and mark up what they aim to one day make actual legislation, based in large part on what was taught in earlier workshops.

  Walking around an ALEC convention, you’d probably feel like you were at a high school civics fair or a Model UN Conference. There’re a few thousand men and women in suits milling about, attending corporate-funded workshops, all with one central theme: profitization.

  From ways corporations can make a profit from our public education system, to ways corporations can skim more and more off the top of Medicare, to ways corporations can avoid pollution regulations—it all comes down to finding new ways to convert the public good and the public trust into the private profit, just as the Goldman Sachs–trained technocrats in Europe are doing.

  And, like attentive students, state lawmakers sit quietly and are spoon-fed by faux, corporate-funded climate change “scientists,” speakers who twist the words of Jefferson and other Founders to unintelligibility, and free-market “economists.”

  “They literally referred to the legislators as the football team,” Pocan said, “and the corporate lobbyists making presentations were our coaches. Those were their words.”142

  It’s the ultimate culmination of the Powell Memo.

  As Pocan put it, the legislators were “being given their game plans” before they were shuffled off to the next phase of the ALEC convention—the “task force” meetings.

  “You need a majority vote from each group for something to advance,” Pocan told me, referring to the corporations on the ALEC task forces.143 “So not only do they write the legislation but then they vote on the legislation for it to move forward.”

  Once the ALEC task force approves legislation, it’s then handed off to the legislators to take back home and introduce in their respective state governments.

  Florida State Representative Rachel Burgin didn’t even bother to remove the ALEC mission statement from the top of the “model legislation” that she introduced in the Florida House of Representatives back in February 2012. Right below the header of her bill, “urging Congress to cut the federal corporate tax rate,” were the words “Whereas it is the mission of the American Legislative Exchange Council…”144

  She realized her mistake the next day and immediately withdrew the bill.

  ALEC, however, makes no secret of its legislation-writing wing, bragging on its website, “ALEC’s Task Forces have considered, written and approved hundreds of model bills on a wide range of issues, model legislation that will frame the debate today and far into the future. Each year, close to 1,000 bills, based at least in part on ALEC Model Legislation, are introduced in the states. Of these, an average of 20 percent become law.”145

  But in states where Republicans control both chambers of the state legislature as well as the governor’s mansion, such as Wisconsin, the success rate is much higher.

  I asked Representative Pocan how much of the legislation he’s seeing introduced in the state legislature in Wisconsin is coming out of ALEC.

  “The vast majority,” he said. “All the attacks on collective-bargaining rights, all the changes to pension law, all of the cuts and ‘reforms’ to education, all of these are part and parcel of workshops and task forces that I’ve been to.”146

  Nine different states have passed ALEC-written legislation to reject efforts to bring transparency to our elections by requiring shareholders to approve corporate election spending. Those states include Massachusetts, Michigan, Minnesota, New Hampshire, North Carolina, Ohio, South Dakota, West Virginia, and Wisconsin.

  Coincidentally, ALEC’s leading corporate contributors have funneled more than $16 million into state political campaigns since 2001.147

  The group Common Cause identified several pieces of legislation that are virtual carbon copies of model ALEC legislation (minus the mission statement), introduced by at least nineteen members of the Republican-controlled Minnesota state legislature, giving tax breaks to tobacco companies, striking down greenhouse-gas-emissions regulations, and taking away the rights of people to vote.148<
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  After the ALEC members in the Minnesota legislature passed four bills that would have given corporations more protections from lawsuits, Democratic governor Mark Dayton vetoed them and then called out his state’s Republican legislators for copying ALEC’s “boot camp manual.”

  “I’ve found that Minnesotans do not want their laws written by the lobbyists of big corporations,” he said.

  “Since these Republican bills so closely follow ALEC’s instructions on tort reform and since ALEC’s opinion on these subjects are evidently more important to Republican legislators than mine, their fellow DFL legislators or the Minnesota Supreme Court’s, perhaps they would share with us all of the other ALEC boot camp manuals so we can know in advance what to expect from them for the rest of the session.”149

  The democracy-stealing agenda of ALEC is most evident in the spate of voter ID laws that have been passed in Republican-controlled state legislatures around the nation. These new laws, virtual carbon copies of ALEC’s model legislation, will disproportionately affect low-income, minority, elderly, and college-age voters (people who usually vote for Democrats). According to a Brennan Center for Justice study, as many as five million people will be disenfranchised by voter ID laws.

  Ironically, ALEC’s founder was conservative strategist Paul Weyrich, who, according to Republican Speaker of the House John Boehner, is a “giant of the Conservative movement.”150

  Weyrich was instrumental in organizing this corporate takeover of our democracy, funding the politically powerful “Moral Majority” as well as the right-wing think tank the Heritage Foundation. In 1980, Weyrich revealed a key conservative strategy and the game plan for ALEC thirty years later, saying in a speech, “I don’t want everybody to vote. Elections are not won by a majority of people. They never have been from the beginning of our country and they are not now. As a matter of fact, our leverage in the elections goes up as the voting populace goes down.”151