Episode Transcript
As you look at the world around us in despair, and what it is doing to us, our children, our loved ones, our friends, our community, our society, our country, and our world, you need to think back as to how this has happened, because they don’t want you to.
It is Tuesday, November 4 and Ronald Reagan has just been elected President of the United States in a seismic political earthquake. He has defeated the incumbent president Jimmy Carter by a landslide, and it presages a fundamental gear change for America, and the rest of the West.
The national mood next day, on November 5, 1980, is therefore one of sharp division, but dominated by a powerful sense of momentum for change.
The prevailing feeling is one of a decisive break from the past. But it is only the recent past. They like the past before this past for that worked best for them. So, it is in fact a movement of Back to the Future.
Immediately, for his supporters, it is a joyful and hopeful break from the "malaise" of the Carter years toward a future of strength and prosperity. For his detractors, it is an anxious and fearful break from the social welfare state and détente of the post-World War II era. This dual mood of optimistic confidence and worried opposition sets the stage for the entire political climate of the 1980s.
However, this has been anticipated by the UK, the previous year, and it is part of a planned roll back to the past.
The weather in London on Friday, 4th May 1979, is pleasant and seasonally mild, but the mood electric and polarised, because the country has unleashed a yet unseen Tsunami by electing Margaret Thatcher as Prime Minister of the United Kingdom.
The mood in the country is mixed between glee from the Right Wingers who have finally realised their dream of winning, but more importantly, isolating and marginalising the ‘One Country Conservatives’ who have largely held sway since 1945, who supported, or at least not trashed, the socialist policies of the Labour governments that have given ordinary people the National Health Service, Free Education, genuine welfare including housing, so that for the first time in British history, the working people, are actually benefitting from the system, and are active players in it, in economic, intellectual, political and artistic terms.
The latter has seen the ‘Swinging Sixties’ explosion of working class inspired plays, films, fashion, and most significantly, pop music with iconic bands like The Beatles, The Rolling Stones, and many others pushing Britain to the forefront of the global cultural revolution.
This is what ‘Excess Democracy’ means in reality. It is what they are against.
Ronald Reagan, who combined the two, great American dream factories, politics and Hollywood, and Margaret Thatcher, the British Prime Minister, are the politicians created by, and representing, these elites whose regressive views of a rose-tinted and glorious past are in line with what they want to get back to; a world where their pursuit of wealth and power will be unhindered and unencumbered by legislative frameworks or social concerns for the wider society.
They understand that those who own the past, own the present.
However, they want to go a step further.
They literally want to go back to living in the better, for people like them, past.
This is reflected in their personal values.
Reagan and Thatcher coming to power means that the turnaround sought by those who were acolytes of the robber barons and the drug barons can now be completed.
They are going to be freed from the moral perimeters and the attendant social and legislative restraints that have been imposed on them in the previous fifty years.
We can look back now and see that The Age of Unrestrained Elite Greed, kept in check since the Great Crash of 1929, is ready to be fully unleashed.
So all social progress is now going to be brought to a gradual end because those they represent have no interest in culture, empathy for fellow citizens, and indeed, don’t accept the idea of a society.
This, of course, raises the never asked question, ‘If there is no such thing as a society, then how can you have shared values that you appeal to politically?’
They have a singular interest – money – which enhances and embeds their power.
One of the first key aims of Thatcher is to destroy the working class because it stands in the way of the regressive, elite instituted policies that will ensure that the power and wealth go back to where they have always resided in Britain, within a shady group of people who direct all that happens in Britain.
There are still limits to what Thatcher is able to do on her own because the pushback to her will be furious, but two things happen, not uncoincidentally, that will ensure she succeeds.
In one of his first actions, In August 1981, in echoes of what had happened to Knights of Labor in 1886, Reagan smashes the Professional Air Traffic Controllers Organization (PATCO) one of the most significant unions in America which has ironically supported his election by decertifying it and firing 11,359 air traffic controllers for not returning to work.
Thatcher has to move more cleverly in the more complex British society.
After a short, sharp, shock recession, which she survives in no small part because of the Falklands War, and during which trade union power is reduced by both political legislation, and also the policy instituted decline in manufacturing industry where trade unions were strong, Thatcher makes her move.
In 1984, she provokes the most powerful union in Britain, the National Union of Mineworkers, into a strike by proposing the closure of twenty collieries with the loss of twenty thousand jobs.
By splitting the union, controlling the narrative, using the police as strike breakers and crushing the strike, Thatcher succeeds in her long-term goal of side-lining unions in the British workplace.
Unprotected, the British working class is marginalised and gradually destroyed to be replaced by large sections of what are now termed, 'the lower class' or 'underclass' or 'precariat', definitions don't matter, a significant group of people without long-term prospects, living hand-to-mouth but without being able, or in some cases, willing to contribute gainfully to the system that has abandoned them.
In 1986, Thatcher deregulates the British financial system in what is called the Big Bang, signalling a new universe and new masters of it.
Again, this is a policy of the American and British elite working in tandem.
Soon after Reagan’s election, the Savings & Loan (S&L) scandal occurs in the USA, and its sets another precedent for things to come.
Reagan's policies turn what has been a source of solid and reasonable mortgage funding for working people, the S&L industry, into a speculative source of wealth generation for the few at the expense of the many including the American taxpayer.
Martin Mayer, guest fellow at the Brookings Institution and author of The Greatest Ever Bank Robbery, outlines it in the following terms, "The theft from the taxpayer by the community that fattened on the growth of the savings and loan (S&L) industry in the 1980s is the worst public scandal in American history. Teapot Dome in the [President] Harding administration and the Credit Mobilier [of America] in the times of [President] Grant have been taken as the ultimate horror stories of capitalist democracy gone to seed. Measuring by money, [or] by the misallocation of national resources … the S&L outrage makes Teapot Dome and Credit Mobilier seem minor episodes."
This legalised theft by the elite, because that is what it is, where rules are changed or bent for them by the president and the political elite, is a consistently recurring pattern in America.
What helps the process is to create a revolving door between business and politics so that they virtually become synonymous with each other.
The politician today is a board member of a corporation tomorrow, and the corporate leader becomes a key decision-maker when placed by a president into major political position, like the Treasury.
This is exactly what happened under Reagan and Thatcher.
Names of presidents change but the system stays the same. See Biden and Trump in the USA. Sunak and Starmer in the UK.
We now call it corporate capture of the political system.
Of course, even Martin Mayer is not to know what is to come in 2008 which will make the S&L scandal look like a gang of Dickensian pickpockets at work.
To ensure Reagan and Thatcher are not followed by others who think differently, the elite established Thinktanks and Institutes work overtime to control the narrative and embark on the wholesale buying of the political system from the inside because it has dared to fail their self-interest, and to make sure it will tow their line of ever bigger yachts carrying their ever bigger demands.
There will never be another FDR in the USA. Or a Clement Attlee or Aneurin Bevan in the UK. That is their expectation and hope.
People who can fundamentally challenge, affect and change the existing system.
They are further helped by the collapse of the Soviet Union in 1991, and the ensuing unipolar period which will last nearly thirty years.
This apparent victory over the Soviet Union (unseen and unexpected by those who claim to know about these things) give the American elite their absurd 'End of History' thinking that their system is now unchallengeable, built to last a millennia, and provides full justification for their rollback actions.
Basically, they can do whatever they want.
This ongoing process by the elite continues by undermining the concept of government for the people, dubbed 'big government', as reflected in the actions of FDR, under the banner of 'small government' being good.
When Thinktanks, and their paid talking heads, declaim about 'small government' they, the system criers for the wealthy, mean a government that works for a small number of people, that is, the elite.
When they also disparage 'big government' they are attacking a government that works for the many, that is, the people.
The equation is simple but easily muddied.
The reality is that government, both federal and state, is intrinsically involved in people's daily lives.
The only aim of this talk is to make sure the government works for a few while keeping the many herded, and in check.
What is not clear to the people is that this also signals an attack on the concept of civic society, where all citizens are seen as equal and there are no 'little people,' and by implication, 'big people,' that most people had come to take for granted after the Second World War.
There is one other thing they, and those they represent, need to ensure that the new, old world they are re-constituting will become unchallengeable.
They know they require control of language to achieve that.
We see it all around us today.
Just one ubiquitous example gives us a clear idea of how it works.
'Neoliberalism' refers to the economic and social framework that we live in, but the words, 'Neo' meaning 'New' and 'Liberalism' meaning ‘Belief in the value of social and political change in order to achieve progress' do not reflect what 'Neoliberalism' is.
It is neither new or progressive, but is in fact, the Nineteenth Century economic and political outlook with a language makeover.
However, it has been adopted by the progressive, political elite in the West as their philosophical framework, think Bill Clinton and Barack Obama in the USA and Tony Blair in the UK, which shows how manipulating language allows the world to be manipulated so the reverse of reality suddenly becomes the real world.
One of the many tools associated with this new, old world was the propounding of the myth of 'The (Free) Market,' by Milton Friedman, yes, that one, in his book, Capitalism and Freedom, first published in 1962.
This myth asserts that 'The Market' is an independent, self-correcting framework which always works towards an equilibrium so needs little or no government regulation, just freedom for those who utilise it.
Same message as Ayn Rand.
Different messenger.
Our real-life experiences show that this is a lie.
A mendacious front.
An intellectual sleight of the mind.
The market, like everything in our society, is made by humans.
There is nothing natural about it.
Therefore, how it works depends on those who can engineer it for their purposes.
Those most active and powerful.
The history of America is a prime example in revealing this.
As we all know, and worth repeating here, history has shown that if you place enough wealth and power in the hands of the few, their natural instinct will be to consolidate all that they have in unchallengeable, unchallenged and unchanging economic, political and social frameworks.
In the last forty years, the market has been decisively tilted towards the American elite and each step only accentuated this tilt until today when the market and the economy only works for them. America is a plutonomy.
There has been no peace dividend for the American people who have seen ever more of their dollars diverted to the military-industrial-tech complex when the military threat that had justified previous spending has disappeared.
The euphoric American elite get what they really want in 1999, the repeal of Glass-Steagall Act of 1933, and its replacement by the Gramm-Leach-Bliley Act, also known as the Financial Services Modernization Act, from a compliant Congress and Democrat president, Bill Clinton who is acting against the work of FDR, a previous Democrat president.
The financial sector is to be both the tool and beneficiary of 21st Century American hegemony.
What it signifies, in reality, is that the unleashed financial sector, symbolised by the increasingly active economic role of central banks, can now embark on the voracious creation of wealth for those within the system, and as the wealthiest nation in the world, America can then use this financial muscle to impose its will globally.
This will see private equity, better known as 'corporate raiders ‘ in the Eighties, freed even more to stride the globe from then on like a plague of 24carat gold locusts destroying all economic, social, environmental and political life in their path as they hoover up more and more of the world's wealth.
On the streets and communities, it will lead to the rise of the 'rentier class,' that is, a definable group of people who will live on income from property or securities while not engaging in a socially useful economic activity.
The dollar becomes the leading geopolitical tool that the American Establishment has intended by Nixon removing it from the gold standard a generation earlier, and globalisation under American control is to be its philosophical twin.
What is less apparent, and hidden in the optimised haze of self-congratulation, is that finance has completely stopped working for the benefit of American people.
The existential implications for American society by this series of actions becomes obvious in the 2008 crash.
The daily implications become clearer sooner.
By shifting focus of the American economy towards finance, America's real strengths, production and innovation are undermined, and the attendant need for a well-paid, domestic, consumer class able to pay for quality goods produced in America is no longer needed.
This includes moving American production chains to cheaper countries, because it means greater profitability for the corporations, the main beneficiary of which is China.
The American elite see it as a win win.
How can they be so myopic?
The American elite have no greater historic perspective than their own short-term gain, and their country's brief history, which is a pre-written justification of elite action, rarely disputed, without wider, global perspective and reliably arrogant.
They think they have an unchallengeable system built to last a millennium so why should they care, laughably supported, and called 'End of History' by Francis Fukuyama and others who should know better, that history ends when no one remains to write it.
It also inadvertently hands a major win to the Chinese political elite whose position is immeasurably strengthened by these actions.
They term it, 'groping for stones to cross the river.'
This reflects how hesitant and unsure the initial steps by CCP are.
There are many reasons for this flight towards unintended consequences.
They also believe that all those who come into contact with this system, and its benefits, will invariably buy into it in all its aspects, including political, because there is no other choice.
This will both extend and increase their wealth and power because all elites are corruptible in the same way.
Yet they have chosen to overlook what both America and China know.
That in a two-party system like America, the party in ostensible power may change but the system remains the same.
In a one-party system like China, the party and the system are one and the same thing.
If the system changes, the Chinese Communist Party (CCP) will lose power.
In essence, the American elite believe that by buying into the capitalist model, the CCP is signing its own death warrant and ensuring eternal American hegemony.
The CCP, faced with this existential choice, does what has previously been thought impossible; they combine communism and capitalism into a hybrid, you could call it communalism, 'social organization on a communal basis,' that works better for its people than American-style capitalism. This move makes the CCP indispensable and unchallengeable within its own national boundaries and thus outmanoeuvres the American political elite.
Most importantly, by breaking the perception that socialism is synonymous with poverty and lack of opportunity two decades earlier, Chinese Leader, Deng Xiaoping, had begun a new narrative which the new Belt and Road Initiative (BRI) reinforces worldwide.
It is the first successful geopolitical countering of the American world narrative in a generation.
And this is what makes China America's number one enemy today.
The impact within America itself is similarly striking but less positive for the American people.
By freeing capital to search for global and unlimited profit, it ensures America becomes a shell of the industrial country it was. This locks its working and middle classes into the service sector, and long-term stagnant wages, which in real terms are lower today than they were a generation ago.
In fact, pre-Covid Americans have the lowest national minimum wage, relative to the median wage, of any of the wealthiest nations represented in the Organization for Economic Cooperation and Development (OECD).
To put it in stark terms, white middle class people, the apparently privileged section of American society, are in a worse economic position today than their parents, and grandparents.
However, in the rush to line their pockets, the elite ignore that exclusivity, limiting the rewards to a select few, is the ultimate enemy of capitalism.
Most importantly, they also do not care that when money is freed to make more money using ever more money in a shiny, inviting, death spiral, eventually nothing; economic, political, social, moral, and even money, has any value because it is not connected to anything.
This ultimately undermines the idea of nationhood and rips away its gossamer fabric.
This is even more true in a young country like America which has not worked at creating a framework that embraces all its people as equal citizens who, therefore, do not all share the same national identity and cultural values.
The timer on a nuclear, political, social bomb right in their own playground has been pressed.
Ostensibly, bank lobbyists say they need change in law that will permit banks to engage in hedge fund trading with derivatives to compete with foreign firms, but they assure the legislators that they will only invest in low-risk securities to protect their customers.
The following year, the Commodity Futures Modernization Act, exempts credit default swaps and other derivatives from regulations.
This federal legislation overrules the state laws that have formerly prohibited this form of gambling, and it specifically exempts trading in energy derivatives at the behest of Enron.
Enron, the poster energy company, wants to engage in derivatives trading using its online futures exchanges, and argues that foreign derivatives exchanges are giving overseas firms an unfair competitive advantage.
Both bills are written and advocated by Texas Senator Phil Gramm, Chairman of the Senate Committee on Banking, Housing, and Urban Affairs.
Senator Gramm's wife, who has formerly held the post of Chairwoman of the Commodities Future Trading Commission, is an Enron board member.
Enron, dubbed the "smartest guys in the room," by sycophants, is a major contributor to Senator Gramm's campaigns.
Federal Reserve Chairman, Alan Greenspan, and former Treasury Secretary, Larry Summers, also lobby for the bill's passage.
Before its bankruptcy in December 2001, Fortune magazine names Enron "America's Most Innovative Company" for six consecutive years.
Enron exposes part of the more obvious reality of how America works, with the political elite, aided by a sycophantic media, in service to the corporate elite who basically are given license to do whatever they want including, in Enron's case, lawless profit-gouging blackouts of their fellow citizens in California.
The indefensible defence of the Enron hierarchy to its theft, lies and cheating is the ultimate cop out of American corporatocracy because it is there in the law made for, and by, people like them, "We were working in the best interests of the shareholders."
Shareholders, individually, tend to be the wealthier sections of society in the first instance.
It suits all parties of power, privilege and ability -politicians, legislators, regulators, accountants, analysts, bankers, media, to make huge money in partnership with the corporate sector.
So, it is in everyone's interest except that of ordinary people, to present Enron as an aberration rather than a prime example of a system, and a country that only works for the few.
At the same time as Enron is engaged in its fraud, contrary to what they is promised to the legislators in 1999, the banks have done exactly the reverse by creating a high-risk investment bubble in mortgages sold as derivatives.
By early 2000, the financial institutions have gamed the system so much and are making so much money on the madly spinning money wheel, that they are offering mortgages to just about anyone including ninja loans-no income, no jobs, no assets-to people with no ability to pay them back.
This is how it works.
" A bank lends money to a homebuyer,
" The bank then sells the mortgage to Fannie Mae which is under the conservatorship of the Federal Housing Finance Agency. The U.S. Department of the Treasury owns all its senior preferred stock. This gives the bank more funds to make new loans,
" Fannie Mae resells the mortgage in a package of other mortgages on the secondary market. This is a mortgage-backed security (MBS). Its value is derived by the value of the mortgages in the bundle,
" A hedge fund or investment bank divides the MBS into different portions. For example, the second and third years of interest-only loans are riskier since they are farther out. There's more of a chance the homeowner will default. But it provides a higher interest payment. The bank ostensibly uses sophisticated computer programs to figure out all this complexity. It then combines it with similar risk levels of other MBS and resells just that portion, called a tranche, to other hedge funds,
All goes well, everyone in the chain is making money, until housing prices decline or interest rates reset, and the mortgages start to default.
The bankers are greedy, and in an environment created for them to function without restraint, but they also understand the deep need people in America have for security because their wider environment of 'Every man for himself' is anything but secure.
Unsurprisingly, they are selling a nightmare as the American Dream.
The demand for mortgages drives up demand for housing which homebuilders try to meet.
By 2005, homebuilders have finally caught up with demand but continue building more and more. At the same time, interest rates are rising so many homeowners are hit with payments they cannot afford. Double whammy!
Falling home prices mean they cannot sell their homes for enough to cover their outstanding loan.
It is the perfect storm.
The 2008 financial crisis is a rinse and repeat of the 1929 stock market crash.
Both involve reckless speculation, loose credit, and too much debt in asset markets, namely, the housing market in 2008 and the stock market in 1929.
Alan Greenspan, Federal Reserve chairman between 1987 and 2006 under four different presidents, a disciple of Ayn Rand and a free marketeer of the Friedman school, is the perfect man in a position of major influence for the economic framework that has blown up.
His long-standing disdain for regulation plays a significant role, and he admits that he has "made a mistake in presuming" that financial firms could regulate themselves.
One paradox the proponents of the free market, neoliberal economists like Greenspan, cannot seem to answer is why corporations when they are making money are all in favour of government keeping out of their activities, but as soon as they become unprofitable or teeter on verge of failure they want the government to bail them out?
The structural failure the collapse reveals should signal an end of the system that has been created, and then run out of control after the end of the Cold War, but by then those in power have completely stopped even keeping up the pretence that the established system works for all Americans.
The crash signifies that the problem in crony capitalism as practiced in America is foundational, systemic, will recur, and a decade or more later the signs point to another upcoming crisis because there is no effort to correct the imbalance, punish the guilty, and bring support where needed to the people affected.
The crash, therefore, is viewed not as a disaster in national terms by the elite, but as a direct threat to the benefitting system established for them.
That is why Barack Obama as president of 'Change You Can Believe in' instructs the Federal Reserve to hand out trillions of dollars, as ordered by them, to bail out the same 'too big to fail' corporations and individuals who have caused the collapse, while millions of innocent ordinary people lose their homes, jobs and families.
It is an economic coup on behalf of the elite by another 'people's president.'
And a congratulatory slap on the back for the ingordigious.
This is reinforced over subsequent years by the Fed 'quantative easing,' printing of trillions of dollars, which has been used to inflate asset values so the very wealthy have got significantly wealthier because they were already significantly wealthy.
It's an ever whirling merry go round for the wealthy with golden tickets and golden cushions, noise cancelling headphones to keep out the cries of the dispossessed and dying a special add on for those lucky enough to get on the ride.
Of course, what is always missing in every crash and the greed rush is counting the cost of natural resources expended, wasted and unable to be replenished - energy, sand, cement, bricks, slate, marble, wood on and on - and damage to the environment for houses that stand empty. Examples are not limited to America. All vouch to a failing, global system.
However, the best analogy for what happens in 2008 is like having dinner at the most expensive restaurant in the world with an exclusive group of your kind where you order copious amounts of Taste Of Diamonds champagne, Romanee-Conti Grand Grand Cru wine. Each of the select you is waited on by an unlimited team of minions who will not only present your 1000 course tasting menu one by one over the course of as many days as you choose but actually put it into your mouth.
While you're deciding which delicacy to eat next, you experience laser light shows, sensual massages, virtual reality showing you the world as you imagine it, and projection mapping of you as masters of the universe to help enhance your experience. But when it comes to paying the bill you throw your hands up in the air and say you are broke
And here's where it gets totally other-worldly.
The maître d' instead of beating you, and your exclusive friends, to a bloody pulp, and then forcing you all into washing the dishes forever with your bare hands actually gives you the money to pay for the meal including a large bit on top so you can get a limo home.
And to pay for it, he lays off half his staff.
Because the restaurant was only ever open for you.
And he needs you back.
Yet Obama's actions should not be a complete surprise.
The issue of who the American president represents, as we have seen, has been a key question running throughout American history.
The elite espousal of the idea of an Imperial Presidency, an emperor in everything but name, openly in the last two decades is not only a dangerous contradiction in terms for a republic, but more transparently, makes clear who the president represents, and flies in the face of America's greatest boast, that it had done away with this inherently undemocratic institution at its founding.
The Emperor has no clothes.
People are living in their vehicles, storage units, RVs, tents - these are people that can no longer pay rent because landlords are doubling the cost. Corporations are buying up buildings and evicting people, including Seniors. Middle America is dying.
So, we are back to the future. With the time machine destroyed, and are being told, there is no way back.
They, it is not about left or right but systemic, want us to stay where we are. Getting ever poorer, losing our liberties and our sense of ourselves as individuals and as a society. That is what the current status quo is.
Do you agree? Is a better world possible, if we do something about it together?
