The banking system and the politicians

The political corruption in this country is no longer whispered about. It is out in the open and fairly well recognized. Productive society is getting plundered by the parasite class in Washington DC and their friends.

The MF Global collapse is merely the latest scandal that has harmed citizens. The lack of prosecutions in the banking system and the politicians who made the thefts possible only provides signals to others that such behavior is acceptable, so long as you know the right people and pay the proper favors.

The linkage between Wall Street and Washington is goes well beyond traditional lobbying. Both sides are getting rich off insider information, favors and special deals. The MF Global implosion (and theft) is a real inconvenience for the political class. As described by Kevin Hayden:

MF Global collapsed while under the leadership of Jon S. Corzine, who was previously governor of New Jersey, a U.S. senator, and the head of Goldman Sachs. MF Global made costly bets on European government bonds.

Mr. Corzine was rumored to be the next Treasury Secretary. He also was a key economic advisor to the Obama Administration.

We may never learn whether Mr. Corzine is guilty of any crimes or not. Thus far, there are no signs of an investigation. Just like all the other questionable Wall Street matters.

The cozy relationship between politics and Wall Street is not capitalism. It is crony capitalism, or less politely, the exploitation of the many by the political class and their buddies. The arguments of the OWS movement, as misguided as many of these folks are, have some validity when the maligned 1% is dissected.  Many in the 1% have earned their money honestly and competitively by providing goods and services and jobs.

The other part of the 1% makes its money not via free markets and competition but via political corruption and connections.  These people are not representative of capitalism; they are part of the nexus between politicians and cronies. These people do not make money by providing goods and services, they make it off of insider information and favoritism. They are part of the political exploitation scam that has ruined the economy and the country.

The following diagram was developed by Dave Cohen:

This diagram of the political process is mostly self-explanatory. The process is self-contained. The only real participation allowed to the general public is rubber-stamp voting every 2 years.

Mr. Cohen’s article details the appalling deterioration of honesty, ethics and morality in the political class. This corruption has now progressed so far that in his opinion:

All we can do now is document the decline and fall. Economic theories regarding how to proceed don’t matter much at this point. The political “debate” about current and economic policy has become almost wholly irrelevant to the nation’s future.

Chalk Mr. Cohen up for someone who (at least now) believes in what Albert J. Nock observed many decades ago:

Taking the State wherever found, striking into its history at any point, one sees no way to differentiate the activities of its founders, administrators and beneficiaries from those of a professional-criminal class