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A republic a form of government in which the people, or some significant portion of them, could  have supreme control over the government and where offices of state are elected or chosen by elected people[2] In modern times, a common simplified definition of a republic is a government where the head of state is not a monarch.[3][4] The word republic is derived from the Latin phrase res publica, which can be translated as "a public affair", and often used to describe a state using this form of government." a "Democratic Republic"

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In the 12 hapless years of this millennium, we have looked on as 3 great bubbles have inflated and burst, each with consequences more dire than the last.
March 28, 2012 |

The following article is an excerpt of a piece that first appeared in The Baffler. Click here to subscribe to The Baffler and read articles by David Graeber, Barbara Ehrenreich, Chris Lehmann, Jim Newell, Maureen Tkacik, and James K. Galbraith in the current issue.

The “sound” banker, alas! is not one who sees danger and avoids it, but one who, when he is ruined, is ruined in a conventional and orthodox way along with his fellows so that no one can really blame him.

—John Maynard Keynes

In the twelve hapless years of the present millennium, we have looked on as three great bubbles of consensus vanity have inflated and burst, each with consequences more dire than the last.

First there was the “New Economy,” a millennial fever dream predicated on the twin ideas of a people’s stock market and an eternal silicon prosperity; it collapsed eventually under the weight of its own fatuousness.

Second was the war in Iraq, an endeavor whose launch depended for its success on the turpitude of virtually every class of elite in Washington, particularly the tough-minded men of the media; an enterprise that destroyed the country it aimed to save and that helped to bankrupt our nation as well.

And then, Wall Street blew up the global economy. Empowered by bank deregulation and regulatory capture, Wall Street enlisted those tough-minded men of the media again to sell the world on the idea that financial innovations were making the global economy more stable by the minute. Central banks puffed an asset bubble like the world had never seen before, even if every journalist worth his byline was obliged to deny its existence until it was too late.

These episodes were costly and even disastrous, and after each one had run its course and duly exploded, I expected some sort of day of reckoning for their promoters. And, indeed, the last two disasters combined to force the Republican Party from its stranglehold on American government—for a time.

But what rankles now is our failure, after each of these disasters, to come to terms with how we were played. Each separate catastrophe should have been followed by a wave of apologies and resignations. Taken together— and given that a good percentage of the pundit corps signed on to two or even three of these idiotic storylines—they mandated mass firings in the newsrooms and op-ed pages of the nation. Quicker than you could say “Ahmed Chalabi,” an entire generation of newsroom fools should have lost their jobs.

But that’s not what happened. Plenty of journalists have been pushed out of late, but the ones responsible for deluding the public are not among them. Standard & Poor’s first leads the parade of folly (triple-A’s for everyone!), then decides to downgrade U.S. government debt, and is taken seriously in both endeavors. And the prospect of Fox News or CNBC apologizing for their role in puffing war bubbles and financial bubbles is no better than a punch line: what they do is the opposite, launching new movements that stamp their crumbled fables “true” by popular demand.

The real mistake was my own. I believed that our public intelligentsia had succumbed to an amazing series of cognitive failures; that time after time they had gotten the facts wrong, ignored the clanging bullshit detector, made the sort of mistakes that would disqualify them from publishing in The Baffler, let alone the Washington Post.

What I didn’t understand was that these weren’t cognitive failures at all; they were moral failures, mistakes that were hard-wired into the belief systems of the organizations and professions and social classes in question. As such they were mistakes that— from the point of view of those organizations or professions or classes—shed no discredit on the individual chowderheads who made them. Holding them accountable was out of the question, and it remains off the table today. These people ignored every flashing red signal, refused to listen to the whistleblowers, blew off the obvious screaming indicators that something was going wrong in the boardrooms of the nation, even talked us into an unnecessary war, for chrissake, and the bailout apparatus still stands ready should they fuck things up again.

Keep on Dancing Till the World Ends

My aim here isn’t to take some kind of victory lap or to get in the granite faces of our eternal pundit corps one more time. Nor is it to blame Republicans for our problems. It is true that, from the scandal of CEO pay to the scandal of lobotomized regulators, each of the really monumental mistakes of our time arose from the trademark doctrines of the political right. And, yes, it was the Bush administration that muzzled government scientists and declared war on organized intelligence in a hundred other ways.

But the problem goes far beyond politics. We have become a society that can’t self-correct, that can’t address its obvious problems, thatcan’t pull out of its nosedive. And so to our list of disasters let us add this fourth entry: we have entered an age of folly that—for all our Facebooking and the twittling tweedle-dee-tweets of the twitterati—we can’t wake up from.

Besides, the reign of corruption has taken plenty of right-wing scalps, too. In fact, one of the most interesting comments on the machinery that is making us stupid came from the libertarian Doug Bandow of the Cato Institute, after he had temporarily lost his job (he got it back a little while later, don’t worry) for puffing clients of Jack Abramoff in exchange for the lobbyist’s largesse. But what was the big deal? fumed Bandow in a 2006 cri de coeur called “The Lesson Jack Abramoff Taught Me. Living in Washington was expensive; and besides, everyone was basically on the take:

Many supposedly “objective” thinkers and “independent” scholar/experts these days have blogs or consulting gigs, or they are starting nonprofit Centers for the Study of... Who funds their books, speeches or other endeavors? Often it’s those with an interest in the outcome of a related debate. The number of folks underwriting the pursuit of pure knowledge can be counted on one hand, if not one finger.

Bandow had been caught, yes, but he wasn’t the only culprit, he insisted—with some accuracy. All opinions are paid for. Everything written in this city—everything in this land that is thought and tweeted and toasted with a hip hip hooray . . . is Abramoffed. We are all slaves to the market; there is no way to stand outside that condition.

I can remember the contempt I felt when I read Bandow’s essay, back in 2006. Of course there was a place where ideas weren’t simply for sale, I thought: the professions. Ethical standards kept professionals independent of their clients’ gross pecuniary interests.

These days, though, I’m not so sure. Money has transformed every watchdog, every independent authority. Medical doctors are increasingly gulled by the lobbying of pharmaceutical salesmen. Accountants were no match for Enron. Corporate boards are rubber stamps. Hospitals break unions, and, with an eye toward future donations, electronically single out rich patients for more luxurious treatment.

And consider the university, the mothership of the professions. For-profit higher education is today a booming industry, feeding on the student loans handed out to the desperate. Even the traditional academy, where free inquiry nominally lives, has become a profit center, a place where exorbitant tuition somehow bypasses the adjuncts who do the teaching but makes for lavish executive salaries; where economists pull in fantastic sums for “consulting”; and where the prospect of launching the next hot Internet startup is a gamble that it is worth bending any rule to take.

Another thing Doug Bandow got right was one of the basic reasons for all this: for most Americans, the building blocks of middle-class life—four years at a good college, for example—are growing ever more expensive and out of reach. For other people and other entities, though, they grow relatively cheaper; they are baubles to be handed out as necessity requires. The result is exactly what our nineteenth-century ancestors would have expected. Think of Jack Grubman, the superstar stock analyst of the nineties, who famously upgraded AT&T’s shares in exchange for getting his children into a ferociously competitive preschool. Or the congressional aides on Capitol Hill, surrounded by the inaccessible luxuries of Washington, D.C., who would do nearly anything for a lobbyist in exchange for a shot at a future job on said lobbyist’s staff. Or the actual members of Congress who sold their votes in exchange for little bits of sushi or a blowout party in Hawaii or good seats at sporting events.

And as we serve money, we find that money wants the same thing from us: to push everyone it beguiles in the same direction. Money never seems to be interested in strengthening regulatory agencies, for example, but always in subverting them, in making them miss the danger signs in coal mines and in derivatives trading and in deep-sea oil wells. You can have a shot at being part of the 1 percent, money tells us, only if you are first committed to making the 1 percent stronger, to defending their piles in some new and imaginative way, to rationalizing and burnishing their glory, to exempting them from regulation or taxation, to bowing down as they pass, and to believing in your heart that their touch will heal scrofula.

So money gives us not only the bond-rating scandal of 2008, in which trash investments were labeled super-wholesome so that the rating agency in question could win more business from the manufacturers of said trash; and not only the Enron scandal of 2001, in which head-spinning conflicts of interest were over- looked by Enron’s accountants in order to preserve the nice ka-ching those conflicts delivered to everyone involved; but also the analyst scandal of 2002, in which Wall Street insiders pushed certain corporate securities on their sappy middle-American clients in order to win those corporations’ business—and then while it is corrupting all the watchmen, money also dashes off an enormous body of literature assuring those sappy middle Americans that they are in fact financial geniuses who can outsmart any possible combination of Wall Street insiders, because together the saps reflect the wisdom of markets or some other such reassuring bullshit. And all of it— the airy populism of the market and its simultaneous complete negation by reality—is as determined by the current distribution of wealth as gravity is by the mass of the planet. Both of them will continue indefinitely regardless of the constant violence the one does to the other simply because that’s the way money wants it, and every dollar in the nation will strain at its leash to ensure that financial naïveté persists on into infinity in complete ignorance of financial fraud.

Thomas Frank is the founding editor of The Baffler and the author of Pity the Billionaire. To read the complete piece, visit The Baffler’s website, or go ahead and subscribe to The Baffler, by clicking here.

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Our Government Is Corrupt Through and Through -- Where's the Outrage?

When politicians get caught taking bribes, it's big news, but most people take the usual legal corruption for granted.


Last week, jurors in a federal bribery case got a taste of good, old-fashioned corruption as New Orleans' former chief technology officer, Greg Mefford, offered the prurient details of how one vendor, Mark St. Pierre, plied city officials with almost $900,000 in bribes and kickbacks that included luxurious travel, the use of a yacht and boozy, good-old-boy poker parties complete with the requisite hookers.

The story represents the kind of corruption that makes splashy headlines, and of course, rightly outrages people. But the impact of this kind of criminality on our governance pales beside that of the everyday, entirely legal kind of corruption most people seem to take more or less for granted.

Consider just a few items "ripped from the headlines" during the past few weeks.

  • On Monday, Politico reported that almost a third of the “blue dog” Democrats who left office or were defeated in last year's midterms are now working as corporate lobbyists. “The conservative Blue Dogs formed a key voting bloc for much of the last congressional session,” reporter Aaren Mehta noted, “drawing impressive fundraising from the energy, financial services and health care industries.” The blue dogs were instrumental in watering down or blocking key Democratic legislation in both the House and the Senate. With their mission accomplished on everything from health-care reform to financial regulation, Politico notes that “industry groups [then] abandoned the pro-business coalition in favor of its GOP opponents.”

  • An analysis by the Center for Responsive Politics found that “House members who defeated a measure to...end certain subsidies for oil companies received five times more in campaign contributions, on average, from the oil and gas industry in the 2010 election cycle than those who voted to proceed with the motion.”

  • House members who voted to continue the subsidies received, on average, five times more money in 2010 from oil and gas interests. Those voting to block debate received $36,066, on average, in campaign contributions from oil and gas interests. Those who voted to begin debate received, on average, $7,192 in campaign contributions from the industry.

  • Overall, members who voted to continue the subsidies received more than $8.7 million in campaign contributions from oil and gas interests in 2010 while those opposed raised just $1.2 million.

  • 16 of the 18 U.S. House members who received over $100,000 in campaign contributions from the industry in 2010 voted to block debate. One voted to proceed and a second did not vote.

  • Last week, in a move that would prove eye-opening for even the most cynical good-government types, FCC Commissioner Meredith Atwell Baker announced that she would be leaving her position early to take a cushy lobbying job for Comcast just months after approving its controversial merger with NBC. As Free Press director Timothy Karr noted, she wasn't the first: “Many have found the FCC to be a particularly lucrative launching pad,” he wrote. “Former FCC Chairman Michael Powell now earns millions as the top lobbyist for the National Cable and Telecommunications Association, a trade group that lobbies for the industry he was tasked to regulate.”

  • Even those supposedly neutral arbiters in the courts aren't standing above the political fray when big money is concerned. American University legal scholar Herman Schwartz noted last week that Justice Sam Alito attended a series of pricey fundraisers held by the right-wing American Spectator, and Clarence Thomas and Antonin Scalia have both “allowed their names and office to be used for fundraising and other partisan activities.”

Each has attended big strategy and fundraising meetings held semiannually by brothers Charles and David Koch, among the wealthiest and most active of all Tea Party and right-wing financiers....

What seems beyond dispute is that all three justices engaged in conduct inconsistent with the Code of Conduct for United States judges, which requires that a judge “not personally participate in fundraising activities; or use or permit the use of the prestige of judicial office for that purpose … make speeches for a political organization or attend or purchase a ticket for a dinner or other event sponsored by … an entity whose principal purpose is to advocate for or against political candidates.”

This kind of ubiquitous, legal corruption raises occasional eyebrows, but it doesn't result in the kind of outrage it deserves. Most people simply take it for granted that moneyed interests get their way in a democracy, and indeed, a series of studies have found that politicians are far more sensitive to the interests of wealthy constituents than those of the poor, at both the federal and state levels.

But it's important to recognize that this kind of moneyed influence is not evident in all wealthy democracies, or at least not to the same degree it is in the U.S., with its world-leading level of economic inequality. Political scientists call it “state capture” -- private interests effectively gaining control of one or more organs of state and using the power vested in those institutions—publicly financed and ostensibly serving the greater good—to feather their own nests. Usually, the term is applied to banana republics, and the means of capture are nefarious: corruption, threats and even violence.

We do it differently. We have a private campaign finance system that requires members of Congress to start raising hundreds of thousands of dollars to get reelected the moment they take office; a government overrun with well-heeled lobbyists, many of whom are ex-staffers visiting offices in which they once worked to call on former bosses; and a well-oiled revolving door between regulatory agencies and the industries they’re supposed to be watching.

The result is that Corporate America does more than merely fend for itself on Capitol Hill. Its efforts amount to state capture, even if subtle in form, and that has a measurable impact.

In my book, I discuss what forensic economists—the CSIs of the dismal science, people who follow economic clues to unearth crimes—have to tell us about the relationship between corporate profits and the political fortunes of the politicians close to those companies.

In their book Corruption, Violence, and the Poverty of Nations, scholars Raymond Fishman and Edward Miguel noted that forensic economists look carefully at how ups and downs in the careers of government officials impact the stock prices of firms to which they’re connected. They consider it to be among the more methodologically sound ways of rooting out government corruption.

In an article for Foreign Policy magazine, Fishman and Miguel laid out the rationale behind the approach:


Whether through hefty campaign contributions or cushy jobs for former politicians, corporations are constantly accused of trying to profit through political ties. (Just think Halliburton or Russia’s Gazprom.) But what’s the real value of these companies’ connections? If you ask politicians or investors, you’re likely to hear a lot of denials. To get the truth, we could ask insiders to put some money where their mouths are, making them bet some of their own cash on whether particular companies are making back-alley deals with politicians to increase their profits. In this political betting pool, raw financial self-interest would lead bettors in the know to reveal their true beliefs about corruption. 

That betting pool is, of course, the stock market. The scholars wrote, “If connections buy tax breaks, valuable licenses, and advantages in bidding for government contracts, then strengthening political ties should boost profits. These higher profits translate directly into higher stock prices, and conversely, removing those ties should send profits—and stock prices—tumbling.”

Purdue University economist Mara Faccio studied those ties in every country that had a functional stock market. Not surprisingly, Faccio found strong connections between business and government across the board, but she also noted that the value of those connections in terms of stock prices varied greatly. In the United Kingdom, for example, stock prices don’t move at all when a firm’s political ties wax or wane. When Rolls-Royce chairman John Moore was appointed to the House of Lords, Rolls-Royce’s stock price remained unchanged. But in Italy, the picture is quite different. When Fiat chief Giovanni Agnelli was appointed to the Italian Senate, the automaker’s stock soared by 3.4 percent, adding millions of dollars in value to the company in a single day.

We’re a lot closer to Italy’s infamous level of public corruption than we are to that of our British cousins. And, as Fishman and Miguel noted, that’s already been pretty well established in this country:


Numerous studies have found that the economic fortunes of well-connected U.S. companies mirror the political fortunes of their connections. When U.S. Sen. Jim Jeffords defected from the Republican Party and handed Senate Democrats a slim majority in 2001, Democratically connected companies benefited in the immediate aftermath. Similarly, the stock value of companies with former Republican lawmakers on their boards increased an average of 4 percent when the Supreme Court handed the 2000 election to George W. Bush, while companies with former Democratic politicians on their boards declined.

All of this represents the most significant structural barrier to passing progressive policies, even those with extensive popular support. It explains why a Congress and White House controlled by Democrats were unable to fulfill a number of the party's key campaign promises – while those with a “D” next to their names enjoyed a majority in 2009 and 2010, it was the “Money Party,” as David Sirota calls it, that maintained a numerical advantage throughout.

Chris Hedges (WikiLeeks) on Moral Courage