GC: The reason I mention it" many of my "progressive" friends are critical of Hamilton as the founder of the Central Bank, and so forth". Do you have any feelings about that?
PCR: When you're forming a new country, no one really knows exactly what to do, and there were differences among these Founding Fathers" and I am not really the kind of historian to handle this issue. He was right and he was wrong. I think everybody was trying to do what they thought was right, and, on the whole, they succeeded. But" the troubles since then are not entirely due to their inability to anticipate".
GC: Everything changes".
PCR: Well, they knew that power would accrue to Government. That's why they tried to break it up into 3 coequal branches, hoping that the jealousies between the branches would keep the overall power low. Unfortunately, they did not anticipate the War Against Southern Secession, which destroyed States' Rights and elevated the power of the Central Government". Since then, we've had other interest groups step forward: the Bankers who wanted the Federal Reserve so that they would have a way of endlessly expanding credit; and, of course, we've had the so-called "War on Terror," which is a way to get rid of the Constitution itself! We can't really say that the Founding Fathers should have anticipated all of this".
GC: I'm going to ask you a question that most journalists will never ask you. Because you do touch on these matters in your books and in your articles". You talk about the Arts" You mention in LOST that we need a new Orwell". I think we need a new Shakespeare as well--someone to help us define our language better, to use it as a cutting tool. So, let me ask you: What is the role of the Arts in creating a new political culture?
PCR: Well, ah, you're getting over my head here, Gary. I'm not" I don't have the kind of background to answer that question in any satisfactory way.
GC: Okay" this is somewhat related". In the 60s and early 70s, there was a flourishing of political and cultural energies. Is anything like that happening now? How can we help it along?
PCR: Well, I think there was some output with the Occupy Movement. It was put down with force and intimidation". In a very real sense, those forces in the 60s and 70s have been bought off". You don't see [for example] the kind of Black leadership that you had in the days of Martin Luther King". Just think about the Rappers--when they came on the scene they were socially conscious, the songs were challenging. Now, some of them are billionaires! I saw the other day that someone was selling out and, ah" Apple" Apple was going to buy his company and the guy's going to end up a billionaire! So" where are these energetic forces going to come from? That has been the success of the elites! They just co-opt whatever movement comes along.
GC: Okay" thanks for indulging me in my particular field". Back to your expertise now". You make a strong case that it wasn't "supply side" economics that screwed up our economy and destroyed our middle class; rather, that had more to do with the Clinton Administration's de-regulation and off-shoring of jobs". Now, one definition of "government" is "to regulate." When we accepted "deregulation" weren't we basically "de-governing" ourselves--giving up the protections of government, oversight functions, etc.? And when that happened, didn't we turn into one big neo-con/neo-liberal hairball--liberalism and conservatism blurred into a crazed Godzilla whose main "business" is war?" How can we get back to better, sensible, more humane regulation and governance?
PCR: I've always regarded regulation as a factor of production. If you have too much, you're in trouble; and if you don't have enough, you're in trouble. The judgment of getting the right amount is open to debate. But, certainly, financial deregulation was irresponsible" because we had had the experience of a deregulated financial system [during the Great Depression] and we saw what an unsatisfactory outcome that was! So, repealing safeguards against repeating those mistakes was a great error. And, it was done by the Banks, which essentially purchased enough "Think Tanks" with grants and donations, and enough university faculty--with grants and donations and speaking opportunities--, and purchased enough senators and Congressmen to get the Glass- Steagall Act repealed--and this was a fundamental error! Among other serious mistakes: the position limits on speculators was removed" and now they can control the markets; they no longer provide a positive function, they basically loot! They use their power for their own profits". Also, allowing the kinds of financial concentration, where you have the banks "too big to fail." Whoever heard of such a thing? If banks are too big to fail, you don't have Capitalism! The justification for Capitalism is that it eliminates those corporations that don't make efficient use of resources. Those are the ones that fail! If you don't let them fail, then you have a subsidized system that makes inefficient use of resources! All of this was a disaster.
GC: And this all happened under Clinton, basically".
PCR: The repeal of Glass-Steagall happened under Clinton. The subsequent deregulations happened under George W. Bush. For example, when Brooksley Born, the head of the Commodities Futures Trading Corporation, tried to perform her federal duty and regulate over-the-counter derivatives, she was blocked by the Chairman of the Federal Reserve, the Secretary of the Treasury and the head of the Securities and Exchange Commission! They took this to Congress and shouted her down and forced her out of office. The position they had was an ideological position for which I know of no evidence: that markets are "self-regulating"" and, therefore, that markets are better regulated without regulators! This is absolute nonsense! And, it's hard to believe that people in Congress didn't know it was nonsense! I attribute it to the influence of the Banks--the money". And, lo and behold, the senator who led the deregulation was very quickly rewarded--he was made Vice-Chairman of one of the "too big to fail" banks; somebody who's paid millions of dollars to go around giving speeches! This is the way this System works when private interests become too powerful. In the United States today, the public and private sectors have merged--because the powerful private sectors essentially determine the policy of the government. There isn't really a government independent of Wall Street, the military-security complex, the Israel Lobby, the mining, energy and timber business, agribusiness--these groups write the laws that Congress passes and the President signs". And, the Supreme Court has made it even easier for them because it has ruled that it's legitimate for corporations to purchase the government--
GC: "Citizens United" and--
PCR: That was the first one" and then the most recent one--
GC: Made it even easier--
PCR: In other words, there are no limits for wealthy corporations to elect the government they want! It's like former President Jimmy Carter said a short time ago: At this time, the United States does not have a "functioning democracy." Well, he's right! We have an oligarchy. And the oligarchy rules, and the government is some sort of cloak for the rulers. You never see anything happen against the oligarchs! For example, one of the senior prosecutors for the Securities and Exchange Commission retired recently; and, he gave a speech and said that his most important cases had been blocked by the "higher-ups" who hoped to get good jobs with the banks that they were protecting! This is the way the government works today. When you try to say, we need more regulation--you can't! The regulators are "captured" by private interests. It was about 30 years ago, that economist George Stigler said that regulatory agencies invariably wind up "captured" by the industries they're supposed to regulate.