Looking back, you have to wonder how we could have ignored the warning signs. In the 1970s, Big Business began to refine its ability to act as a class and gang up on Congress. Even before the Supreme Court's Citizens United decision, political action committees deluged politics with dollars. Foundations, corporations, and rich individuals funded think tanks that churned out study after study with results skewed to their ideology and interests. Political strategists made alliances with the religious right, with Jerry Falwell's Moral Majority and Pat Robertson's Christian Coalition, to zealously wage a cultural holy war that would camouflage the economic assault on working people and the middle class.
To help cover-up this heist of the economy, an appealing intellectual gloss was needed. So public intellectuals were recruited and subsidized to turn "globalization," "neo-liberalism," and "the Washington Consensus" into a theological belief system. The "dismal science of economics" became a miracle of faith. Wall Street glistened as the new Promised Land, while few noticed that those angels dancing on the head of a pin were really witchdoctors with MBAs brewing voodoo magic. The greed of the Gordon Gekkos -- once considered a vice -- was transformed into a virtue. One of the high priests of this faith, Lloyd Blankfein, CEO of Goldman Sachs, looking in wonder on all that his company had wrought, pronounced it "God's work."
A prominent neoconservative religious philosopher even articulated a "theology of the corporation." I kid you not. And its devotees lifted their voices in hymns of praise to wealth creation as participation in the Kingdom of Heaven here on Earth. Self-interest became the Gospel of the Gilded Age.
No one today articulates this winner-take-all philosophy more candidly than Ray Dalio. Think of him as the King Midas of hedge funds, with a personal worth estimated at almost $16 billion and a company, Bridgewater Associates, reportedly worth as much as $154 billion.
Dalio fancies himself a philosopher and has written a book of maxims explaining his philosophy. It boils down to: "Be a hyena. Attack the Wildebeest." (Wildebeests, antelopes native to southern Africa -- as I learned when we once filmed a documentary there -- are no match for the flesh-eating dog-like spotted hyenas that gorge on them.) Here's what Dalio wrote about being a Wall Street hyena:
""when a pack of hyenas takes down a young wildebeest, is this good or bad? At face value, this seems terrible; the poor wildebeest suffers and dies. Some people might even say that the hyenas are evil. Yet this type of apparently evil behavior exists throughout nature through all species... like death itself, this behavior is integral to the enormously complex and efficient system that has worked for as long as there has been life... [It] is good for both the hyenas, who are operating in their self-interest, and the interests of the greater system, which includes the wildebeest, because killing and eating the wildebeest fosters evolution, i.e., the natural process of improvement... Like the hyenas attacking the wildebeest, successful people might not even know if or how their pursuit of self-interest helps evolution, but it typically does."
He concludes: "How much money people have earned is a rough measure of how much they gave society what it wanted..."
Not this time, Ray. This time, the free market for hyenas became a slaughterhouse for the wildebeest. Collapsing shares and house prices destroyed more than a quarter of the wealth of the average household. Many people have yet to recover from the crash and recession that followed. They are still saddled with burdensome debt; their retirement accounts are still anemic. All of this was, by the hyena's accounting, a social good, "an improvement in the natural process," as Dalio puts it. Nonsense. Bull. Human beings have struggled long and hard to build civilization; his doctrine of "progress" is taking us back to the jungle.
And by the way, there's a footnote to the Dalio story. Early this year, the founder of the world's largest hedge fund, and by many accounts the richest man in Connecticut where it is headquartered, threatened to take his firm elsewhere if he didn't get concessions from the state. You might have thought that the governor, a Democrat, would have thrown him out of his office for the implicit threat involved. But no, he buckled and Dalio got the $22 million in aid -- a $5 million grant and a $17 million loan -- that he was demanding to expand his operations. It's a loan that may be forgiven if he keeps jobs in Connecticut and creates new ones. No doubt he left the governor's office grinning like a hyena, his shoes tracking wildebeest blood across the carpet.
Our founders warned against the power of privileged factions to capture the machinery of democracies. James Madison, who studied history through a tragic lens, saw that the life cycle of previous republics had degenerated into anarchy, monarchy, or oligarchy. Like many of his colleagues, he was well aware that the republic they were creating could go the same way. Distrusting, even detesting concentrated private power, the founders attempted to erect safeguards to prevent private interests from subverting the moral and political compact that begins, "We, the people." For a while, they succeeded.
When the brilliant young French aristocrat Alexis de Tocqueville toured America in the 1830s, he was excited by the democratic fervor he witnessed. Perhaps that excitement caused him to exaggerate the equality he celebrated. Close readers of de Tocqueville will notice, however, that he did warn of the staying power of the aristocracy, even in this new country. He feared what he called, in the second volume of his masterwork, Democracy in America, an "aristocracy created by business." He described it as already among "the harshest that ever existed in the world" and suggested that, "if ever a permanent inequality of conditions and aristocracy again penetrate the world, it may be predicted that this is the gate by which they will enter."
And so it did. Half a century later, the Gilded Age arrived with a new aristocratic hierarchy of industrialists, robber barons, and Wall Street tycoons in the vanguard. They had their own apologist in the person of William Graham Sumner, an Episcopal minister turned professor of political economy at Yale University. He famously explained that "competition... is a law of nature" and that nature "grants her rewards to the fittest, therefore, without regard to other considerations of any kind."
From Sumner's essays to the ravenous excesses of Wall Street in the 1920s to the ravings of Rush Limbaugh, Glenn Beck, and Fox News, to the business press's wide-eyed awe of hyena-like CEOs; from the Republican war on government to the Democratic Party's shameless obeisance to big corporations and contributors, this "law of nature" has served to legitimate the yawning inequality of income and wealth, even as it has protected networks of privilege and monopolies in major industries like the media, the tech sector, and the airlines.
A plethora of studies conclude that America's political system has already been transformed from a democracy into an oligarchy (the rule of a wealthy elite). Martin Gilens and Benjamin Page, for instance, studied data from 1,800 different policy initiatives launched between 1981 and 2002. They found that "economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy while mass-based interest groups and average citizens have little or no independent influence." Whether Republican or Democratic, they concluded, the government more often follows the preferences of major lobbying or business groups than it does those of ordinary citizens.
We can only be amazed that a privileged faction in a fervent culture of politically protected greed brought us to the brink of a second Great Depression, then blamed government and a "dependent" 47% of the population for our problems, and ended up richer and more powerful than ever.
The Truth of Your Life
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