Arrogant Capital: Washington, Wall Street, and the Frustration of American Politics
a book by Kevin Phillips
(our site's book review)
The author outlines how money talks way too loudly in Washington, and then he furnishes us a blueprint for taking Washington back in this prescient 1995 book. The capital has become: “. . . so enlarged, so incestuous in its dealings, so caught up in its own privilege that it no longer seems controllable or even swayable by the general public.” He sees hopes that grassroots pressures and/or movements can still push for change and get it, but the chances that the D.C. elites will self-correct are two in number: slim and none.
U.S. neocons' imperialism and warmongering is out of control yet the Congress tasked with stopping such abuses is mute—something smells rotten in Washington! The game is rigged. Bailouts? The biggest companies got help while the little guy got the finger.
He says that historically, “aging great-power capitals often become parasitic cultures.” He draws parallels with other empires from times past that have shown this type of decline before their fall. Special interests usually germinate the seeds that become the biggest dangers. He sees a corrupt capital as part of a larger cultural picture characterized by polarization, inequality and walled and guarded enclaves. Political, financial and business elites that constantly bail each other out and bend the rules have given those not in on the game a sense of pessimism.
The fall of Rome—is the U.S. next?
He sees Washington as the castle of the aristocracy presiding over the serfs (that are America’s ordinary breadwinners) in a feudalistic manner. Jefferson warned of concentrated big government power in Washington, wanting to see it stay decentralized to the places where it is responsible locally and must serve rather than exploit. Phillips: “No bloated great-power capital has ever made itself over.”
The coming Feudalism, where the serfs carry the aristocratic royalty
Phillips points out that the U.S. government’s entire annual budget before World War II was less than what it now takes just to keep our criminals in jail for a year. Also, America has learned to transform itself whenever needed without bloodshed and revolution, unlike most other countries. But the extreme disaffectedness of the electorate in the 90s and into the 21st century is pointing toward a change that the elites had better heed—or expect dire consequences.
Too many hogs at the trough
Why? Because, in words that echo Howard Beale in the 1976 film Network, We're mad as hell, and we're not going to take it anymore! This type of corrupt, shortsighted greed tends to be self-limiting as the greedy hogs eventually overturn the feeding trough in their feeding frenzy, trampling all and sundry, and they run amok into the countryside like so many demented Frankenstein monsters.
We're throwing open our windows and hollering: 'we're mad as hell, and we're not going to take it anymore!'
The Frankenstein monster runs amok like the greedy hogs in Washington will soon do
Bloodshed is the usual way bloated great-power capitals have made themselves over—but we hope our corrupt country is still enough of a democracy to avoid that
The author takes various conservative authors to task for saying that our current problems have nothing to do with economics, and, instead, are only about cultural deterioration via liberal values. He points out that Reaganomics and the rich getting richer while the poor get poorer are both demonstrably part of the problem as well. An unusually insightful section about the national debt demonstrates why the government was so willing to get itself trillions of dollars into debt and stay there: “As massive debt becomes a major national problem, it also becomes a major financial opportunity and vested interest.”
How much money is enough? Will the greed ever end?
Unless American citizens start defecating money, the debt has put us all in deep doo-doo
This is because powerful investment firms can trade in U.S. government debt and speculative derivatives thereof. The combination of speculation and the special interests who profit so handsomely from it represents central weaknesses in the politics and economics of the U.S. Deregulating finance and letting urban infrastructure deteriorate are other areas where the 80s and 90s were times of irresponsibility and decay for our country.
Like other authors such as the Tofflers, he sees the possibility of an electronic electorate (via computers and the Internet) giving populism a shot in the arm as semi-direct activist democracy and rule by the people become more likely, and political parties become more unnecessary, and the era of rule by special interests possibly drawing to a close. On the plus side of the ledger, the Phillips blueprint for a political revolution is a fairly well thought out prescription for decentralization, opening up the entrenched, corrupt, petrified, two-party system, empowering the tools and processes of direct democracy (2/3 of U.S. citizens favor binding national referendums on policy/tax/law questions), disempowering interest groups, reducing incentives for speculation and litigation and bringing national and international debt under control. He should have added completely dumping corporations' right to influence elections with money.
Although right, his advice that the U.S. should disempower interest groups will happen only when pigs learn to fly
On the minus side of the ledger, he wants progressive tax systems to take from the Haves and give to the Have-nots rather than having an equal tax burden for everyone (to his credit, though—he at least considers a progressive flat tax). Next, he feels that there’s a built-in win-lose structure to the relationship between the average American and the corporate health of America, which he says is helping to create a privileged class, and this is bad on general principles. Outrages like the infamous bailouts that Obama handed out like it was his money are all part of this pattern of privilege—only the richest and biggest companies got help while the little guy got the finger.
The majority of Americans were benefiting from the great corporate successes registered in the stock market in the 90s and some of the more modest gains in the 21st century. And more are getting on board daily—especially since CD rates are very low now (in 2014). American corporate success, when it's occurring, is mostly their success these days, not our success. The rich are getting richer and everyone else is getting poorer. Phillips’ diagnosis of corporate America being part of the problem is true, but, in truth, corporate America is also part of the solution—or at least could be.
The rich are getting richer and everyone else is getting poorer—the game is absolutely, positively rigged!
However, we fear that those in the know (insider info?) are earning more (per dollar invested) from the stock market than the little guy, so the fairness of the stock market situation is, admittedly, questionable. In addition, the 2008 bailouts on the backs of the taxpayers seem little better than burglary on a cosmic scale. But the general income redistribution schemes of liberals pale beside the far superior income opportunity ideas conservatives favor. Let's get the poor earning money, not getting handouts or income redistribution funds. The more we socially engineer GIVING to them, the more dependent they get on us. The TV-reported situation of slackers stopping job searching because the government is giving them such nice handouts as food stamps, and other gifts, has made many of us hard-working Americans see red, since it is we taxpayers who are stuck with the bill.
"Work? Hell no—I've got food stamps!"
Phillips’ suspicion of globalization and the U.S. becoming a Third Wave Information Age economy more involved in thinking and serving than making things, his dislike of NAFTA, his over-eager support of nationalism (which gets more obsolete daily), and his protectionist tendencies all reveal him as a person not quite ready for the Third Wave and the Powershift it involves. He’s still operating from the old paradigm when he mistrusts service workers and cites historical economic powers and points out how service workers could never have kept an economy vital in any of them. He doesn’t see the liabilities of nationalistic sentiments nor the anachronism of a manufacturing mindset. He’s still willing to see government as a solution, and reluctant to look into grassroots movements actually having the best potentials for any long-term solutions. (To his credit, however, he advocates grassroots empowerment via national referendums, whether electronic or not.)
Registering for MC search and match
The desires of the constituents that politicians represent are often irrelevant and usually secondary to special interests—so politics will not be fixing our lives any time soon
In general, it could be said that he hasn’t quite accepted the new reality that power is higher quality if it comes from knowledge rather than wealth or coercion. Giving those that have less more of what the Haves have is not the social empowerment he thinks it is. Instead, he’d be better off advocating giving those with less the opportunity to create more wealth of their own via better knowledge, better lifestyles, and fuller utilization of the best information and wisdom that science has to offer (think MC—and see Why Register for an MC?).
Phillips wisely wants us to pull the rug out from under special interests
His populism tendencies are refreshing and right on track, as are his support for empowering the individual via national referendums, decentralization and pulling the rug out from under special interests. But he relies too much on what the politicians can potentially do to fix the lives of the citizens—an old liberal flaw—rather than what citizens can do to get their own lives working and what they can do with grassroots movements that can force the politicians to either lead, follow or get out of the way. See Who Will Tell The People?.