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This
is a reprise of an interview with MIT economist Simon Johnson which was posted here in February, 2009.
Have
we heeded Simon Johnson's warning? Has he proven to be prescient? Is crony capitalism and the kleptocracy
becoming bolder, more aggressive, ever more demanding?
"I
think I'm signaling something a little bit shocking to Americans, and to
myself, actually. Which is the situation we find ourselves
in at this moment, this week, is very strongly reminiscent of the situations
we've seen many times in other places.
But they're places we don't like to think of ourselves as being similar to.
They're emerging markets. It's Russia or Indonesia or a Thailand type
situation, or Korea. That's not comfortable. America is different. America is
special. America is rich. And, yet, we've somehow find ourselves in the grip
of the same sort of crisis and the same sort of oligarchs...
But, exactly what you said, it's a small group with a lot of power. A lot
of wealth. They don't necessarily - they're not necessarily always the names,
the household names that spring to mind, in this kind of context. But they
are the people who could pull the strings. Who have the influence.
Who call the shots...
...the signs that I see this week, the body language, the words, the op-eds,
the testimony, the way they're treated by certain Congressional committees,
it makes me feel very worried.
I have this feeling in my stomach that I felt in other countries, much poorer
countries, countries that were headed into really difficult economic
situation. When there's a small group of people who got you into a
disaster, and who were still powerful. Disaster even made them more powerful.
And you know you need to come in and break that power. And you can't. You're
stuck....
The powerful people are the insiders. They're the CEOs of these banks.
They're the people who run these banks. They're the people who pay themselves
the massive bonuses at the end of the last year. Now, those bonuses are
not the essence of the problem, but they are a symptom of an
arrogance, and a feeling of invincibility, that tells you a lot about
the culture of those organizations, and the attitudes of the people who lead
them...
But it really shows you the arrogance, and I think these people think that
they've won. They think it's over. They think it's won. They think that
we're going to pay out ten or 20 percent of GDP to basically make them whole.
It's astonishing....
...these people are throughout the system of government. They are very
much at the forefront of the Treasury. The Treasury is apparently calling
the shots on their economic policies.
This is a decisive moment. Either you break the power or we're stuck for a
long time with this arrangement."
Bill Moyer's Journal - Interview with Simon Johnson, February,
2009.
Johnson
also wrote a piece in the Atlantic Magazine titled The Quiet Coup. It may be worth re-reading.
Here is the introduction to this in The Fall of the American Republic:
The Quiet Coup d'Etat in
August 2010.
"I
am not so optimistic that this reform is possible, because there has in fact
been a soft coup d'etat in the US, which now
exists in a state of crony corporatism that wields enormous influence over
the media and within the government.
Let's be clear about this, the oligarchs are flush with victory, and feel
that they are firmly in control, able to subvert and direct any popular
movement to the support of their own fascist ends and unslakable
will to power.
This is the contempt in which they hold the majority of American people and
the political process: the common people are easily led fools, and everyone
else who is smart enough to know better has their price. And they would
beggar every middle class voter in the US before they will voluntarily give
up one dime of their ill gotten gains.
But my model says that the oligarchs will continue to press their advantages,
being flushed with victory, until they provoke a strong reaction that
frightens everyone, like a wake up call, and the
tide then turns to genuine reform."
As far as I can tell, we are right on track for a very bad time of it. And
you might be surprised at how far a belief in exceptionalism
and arrogant superiority can go before it finally ends, or more likely,
falls.
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