Whereas the principle has been for 900 years that if you break the law then you will be punished but if you are innocent than you are supposed to be let free, the new principle is that everyone is a suspect and the government has been giving itself the right to act in the manner depicted in the Tom Cruise film The Minority Report (based on the sci fi short story by Philip K. Dick) where it will pre-emptively arrest and hold people who they think might do something. One extreme expression of this is Obama's publicly ordering the assassination of US citizens that he regards as terrorists. This is without trial and conviction, just by presidential fiat. Some people might say that this is not that different or even identical to what has de facto gone on for some time where innocent people are prosecuted successfully and presidents order the CIA or some other clandestine agents to assassinate foreign or domestic leaders. They're right that this goes on, but what should not be missed here is the momentousness of the explicit changes in the law that have been underway. When you make it the law and the norm to do these things in the open that is a whole different level of danger for the society. It is the difference between rule by law, with some deviations from that going on, and rule by fascist principles where there is no rule of law and there is no presumption of innocence, just rule by force and fear.
There are a lot of facets to this, including most notably problems with the fundamental nature of modern bureaucracies and the looming disasters that are inevitable under neoliberal principles (with Katrina, the Deepwater Horizon oil catastrophe in the Gulf of Mexico, mass extinction of species, the ruination of the ocean within the next generation, and global warming just a few that we could talk about) but I can't go into all of that now and you'll have to read the book to get this full argument.
I do, however, want to briefly mention here the issue of the financial system. This issue's in the news again as you know.
In the years leading up to the housing bubble's bursting, investment banks and mortgage companies were raking in so much money that they did not concern themselves with what would happen when these loans and investments became unsustainable.
"The problems that led to the last crisis have not yet been addressed, and in some cases have grown worse, says Neil Barofsky, the special inspector general for the trouble asset relief program, or TARP. . . .
"'Even if TARP saved our financial system from driving off a cliff back in 2008, absent meaningful reform, we are still driving on the same winding mountain road, but this time in a faster car,' Barofsky wrote."
L. Randall Wray, Professor of Economics at University of Missouri, Kansas City, provides a broader analysis of the underlying structural problems at work:
"'[F]inancialization' of the economies concurrently meant both 'globalization' as well as rising inequality.
"The weight of finance moved away from institutions--that were guided by a culture of developing relations with customers--toward 'markets' (the 'originate to distribute' model of securitizing pools of mortgages is a good example). This virtually eliminated underwriting (assessing credit worthiness of customers) and also favored the 'short view' (immediate profits) of traders (you are only as good as your last trade) over the long view of financial institutions that hold loans... A 'trader mentality' triumphed, that encouraged practices based on the 'zero sum' approach: in every trade there is a winner and a loser. As practiced, the bank would be the winner and the customer would be duped.
"This transformation helps to explain why fraud became rampant as normal business practice... In the end, the US financial system (and perhaps many others) became nothing but a massive criminal conspiracy to defraud borrowers."
Let me summarize Wray's remarks: Our financial system and many others have become a massive criminal conspiracy. This is not an anomoly. This is the standard practice now.Professor Wray does not explain why the weight of finance capital moved towards "markets." To answer that question very succinctly, finance capital's dominance reflects the natural flow of capital into the areas where the quickest and biggest profits can be made. For a system premised on the pursuit of profit, this shift to financialization and what Wray describes as a "massive criminal conspiracy" are to be expected. Short-term logic trumps any long-term logic; profits made today override any serious considerations of longer time horizons. Arguing as some do that finance capital's focus on short-term gains is jeopardizing the system's long-term stability and viability misses the point. The system can only be governed, so long as it continues to be the system in place and is not replaced by a different system, by profit. Doing what is best for it in the long-run is not how the system operates. (pp. 172-174).
In response to this some people advocate a return to pre-monopoly capitalism and "free markets." As I show in my book, there is a reason why free markets inevitably turn into monopolies and the main reasons are because monopoly is an extension upon the very logic of capital's pursuit of profit and maximizing market share and because of the economies of scale. Free markets become unfree in the same way that caterpillars turn into butterflies. It's in their nature and a product of the forces that animate them and make them what they are.
I want to turn now to extremely briefly examine the third quote on the back of my book's contents to complete my remarks today and then we'll open this up for any questions or comments and then I'll be happy to sign any books people would like to get.
There is a tremendous amount of mystification out in society about the real nature of political rule, a point I attack from many different angles throughout the book. In Chapter Five I examine specifically the fundamental principles of democratic theory. In short I show that there are fatal flaws in the premises of the theory, which is the main reason why democracy as people understand it somehow always seems like that pot of gold at the end of the rainbow. You chase it and chase it and it remains elusive. The problem with democratic theory isn't that it just needs fine-tuning. The problem lies in the theory itself.
There are other books that have been and are being published on globalization but the ones that talk about solutions at all advocate as a solution some version of "more democracy." What I show in Chapter Five is that "more democracy" as people generally understand that isn't the solution because we cannot obtain authentic popular rule under the existing electoral, political, and economic system. Let me read the quote on the back cover that concentrates my argument regarding democratic theory:
"Democratic theory fails to give proper weight to the initiating and decisive power of the state and media relative to the populace. Under normal circumstances, media and the state possess virtually all of the advantages--and dominate the process--by which the public agenda gets set. They set the table. The public must decide what to eat from the offerings placed there by the media and state, and in that sense the public 'democratically' chooses what it likes, but the public does not decide what will be on the table in the first place." (p. 229)
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