If we dare look at the plain facts of the matter, we must conclude the US is a kleptocracy not unlike Greece, only on a larger and slightly more sophisticated scale.
Here' the evidence:
1. Neither political party has any real interest in limiting the banking/financial cartel. The original Glass-Steagall bill partitioning investment banking from commercial banking was a few pages long, was passed in a few days, and immediately had profound and lasting effects. Today our political oligarchy spends months passing thousands of pages of complex legislation that accomplishes almost nothing. What we are witnessing is a kind of political theater called Kabuki.
Here's what Federal Reserve Bank of Kansas City President Thomas Hoenig recently noted in a rare admission by an insider like himself:
"The problem with SIFIs ("Systemically Important Financial Institutions," a.k.a. too big to fail banks) is: they are fundamentally inconsistent with capitalism. They are inherently destabilizing to global markets and detrimental to worldwide economic growth. So long as the concept of a SIFI exists, and there are institutions so powerful, and considered so important, that they require special support and different rules, the future of capitalism is at risk, and our market economy is in peril."
When he was asked if he really thinks Dodd-Frank and all the other "fooled by complexity" legislation has accomplished anything, Hoenig cut that fantasy off at the knees:
"As late as 1980, the U.S. banking industry was relatively un-concentrated, with 14,000 commercial banks and the assets of the five largest amounting to 14% of GDP. Today, by contrast, we have a far more concentrated, and less competitive, banking system. There are fewer banks operating across the country, and the five largest institutions control more than half of the industry's assets, which equals almost 60% of GDP. The largest 20 institutions control 80% of the industry's assets, which amounts to about 86% of GDP.
In other words, the domination of the political process and the economy, by the financial cartel, has been masked by a welter of purposefully obfuscating legislation. This is of course the exact same trick Wall Street used to cloak the risk of the mortgage-backed derivatives it sold as "low risk" AAA rated securities: By design, the instruments were so complex that only the originators understood how they worked.
That is the current legislative process in a nutshell. Much of the 60,000 pages of tax code are arcane because they describe loopholes and exclusions written specifically to exempt a single corporation or cartel from Federal taxes.
The US is a kleptocracy because its political leadership actually has no interest in limiting the banking/financial cartel which today all but owns our legislators. When questioned why their "reforms" are so toothless, these legislators wring their hands and bleat, "Honest, I wanted to limit the banks but they're too powerful."
2. Our stock markets are dominated by insiders who have an extremely unfair ( if not illegal ) advantage: It is estimated that some 70% of all shares traded are exchanged in private "dark pools" operated by the TBTF banks and Wall Street, and the majority of the remaining 30% of publicly traded shares are traded by high-frequency trading machines that hold the shares for a few seconds -- however long is needed to skim the advantages offered by proximity to the exchange and the speed which that helps provide.
If that's your idea of an "open market," then you're the ideal citizen for a kleptocracy, i.e. you're someone who doesn't think much, and who quietly accepts their losses.
3. The rule of law in the US has been divided into two branches: one is a branch of law in name only -- it's for the financial elites and corporate cartels. The other branch, which actually has some teeth, is for the rest of us, we mere "citizens" (so-called citizens). Between corporate toadies on the Supreme Court who have granted corporations rights to spend unlimited amounts of money lobbying and buying legislators, as a form of "free speech" -- but how can something that costs billions of dollars be "free"? -- and vast regulatory bureaucracies that saw nothing wrong with MERS and the complete corruption of land and mortgage transfer rules, the US legal system is now part and parcel of a very refined and perfectly functioning kleptocracy.
As economist Hernando de Soto observed in The Destruction of Economic Facts, the ForeclosureGate mortgage mess is not just a series of petty paperwork mistakes -- it represents the actual destruction of the entire system of trustworthy transfer of property rights for non-elites:
Knowing who owned and owed, and fixing that information in public records, made it possible for investors to infer value, take risks, and track results. The final product was a revolutionary form of knowledge: "economic facts." However, o ver the past 20 years, the American and European elites, who now all but own their/our respective governments, have quietly gone about destroying these facts . The very systems that could have provided markets and governments with the means to understand the global financial crisis--and prevent another one--are being eroded. Governments have allowed what we might call "shadow markets" to develop and reach a size beyond comprehension. Mortgages have been granted and recorded with such inattention that homeowners and banks often don't know, and cannot prove, who owns their homes! In a few short decades the West has undercut 150 years of legal reforms that made the global economy possible. And we have yet to even begin to suffer the costs and repercussions of allowing this undercutting to take place.
The results are hardly surprising. In the U.S., trust has broken down between banks and subprime mortgage holders; between foreclosing agents and courts; between banks and their investors; and even between banks and other banks.