Who makes up the oligarchy?

Commenter Jeff, in response to an earlier post, posed the question: Who or what constitutes the oligarchy and when did they come into being? Another commenter to that same post, named simply G, asked: What needs to be done to change things? I’ll address the first question here and keep the next for a subsequent post.

There are occasional attempts to portray the oligarchy as some secretive group of unidentified individuals such as the Masons or the Illuminati (or the Inebriati), meeting in secret with passwords and the like. They are not because that is not how things work. The modern transglobal oligarchy consists of figures in the government and private sector working largely in the open. They meet regularly at big public functions where a substantial time is spent in open meetings. But these gatherings also allow for private meetings such as dinners and parties and other social events where the spotlight is off and where a lot of the consensus is built up.

If you look closely, you will see such non-secret informal decision making systems all around you. Whether in your school or religious institutions or community or professional organizations or social circles, there will usually be some smaller grouping of like-minded influential individuals that talk privately to one another often and come to an informal consensus on what to do, and the open meetings are where those informal decisions are formalized, codified, and implemented. The influential people in those groups would be offended to be told that they are acting as a cabal, usurping the rights of the larger group to freely deliberate and make decisions. They see themselves as a positive force, making the organization run more smoothly.

The oligarchy works just like that. Some of the names of these influential groups which meet regularly are familiar: the Trilateral Commission, the Carlyle Group, the Bilderberg Group, the Bohemian Grove, etc. But there are many more. Chrystia Freeland in an article in the January/February 2011 issue of The Atlantic titled The Rise of the New Global Elite describes the process by which people become part of it.

To grasp the difference between today’s plutocrats and the hereditary elite, who (to use John Stuart Mill’s memorable phrase) “grow rich in their sleep,” one need merely glance at the events that now fill high-end social calendars. The debutante balls and hunts and regattas of yesteryear may not be quite obsolete, but they are headed in that direction. The real community life of the 21st-century plutocracy occurs on the international conference circuit.

The best known of these events is the World Economic Forum’s annual meeting in Davos, Switzerland, invitation to which marks an aspiring plutocrat’s arrival on the international scene. The Bilderberg Group, which meets annually at locations in Europe and North America, is more exclusive still—and more secretive—though it is more focused on geopolitics and less on global business and philanthropy. The Boao Forum for Asia, convened on China’s Hainan Island each spring, offers evidence of that nation’s growing economic importance and its understanding of the plutocratic culture. Bill Clinton is pushing hard to win his Clinton Global Initiative a regular place on the circuit. The TED conferences (the acronym stands for “Technology, Entertainment, Design”) are an important stop for the digerati; Paul Allen’s Sun Valley gathering, for the media moguls; and the Aspen Institute’s Ideas Festival (co-sponsored by this magazine), for the more policy-minded.

The people who attend these gatherings are well connected to key figures in the business world and have the ear of key policy makers in governments and in fact move freely between the two worlds. In the US, Goldman Sachs, the US Treasury Department, and the Federal Reserve Bank can almost be considered to be a single entity because of all the people who smoothly move between them. As Glenn Greenwald wrote in 2009:

[Michael] Paese went from Chairman [Barney] Frank’s office to be the top lobbyist at Goldman, and shortly before that, Goldman dispatched Paese’s predecessor, close Tom Daschle associate Mark Patterson, to be Chief of Staff to Treasury Secretary Tim Geithner, himself a protege of former Goldman CEO Robert Rubin and a virtually wholly owned subsidiary of the banking industry. That’s all part of what Desmond Lachman — American Enterprise Institute fellow, former chief emerging market strategist at Salomon Smith Barney and top IMF official (no socialist he) — recently described as “Goldman Sachs’s seeming lock on high-level U.S. Treasury jobs.”

Meanwhile, the above-linked Huffington Post article which reported on [Senator Dick] Durbin’s comments [that “The banks — hard to believe in a time when we’re facing a banking crisis that many of the banks created — are still the most powerful lobby on Capitol Hill. And they frankly own the place.”] also notes Sen. Evan Bayh’s previously-reported central role on behalf of the bankers in blocking legislation, hated by the banking industry, to allow bankruptcy judges to alter the terms of mortgages so that families can stay in their homes.

Matt Taibbi piles on the evidence on how this fairly close-knit but informal network of especially well-connected insiders share and use information that is not even available to the general business community, let alone us members of the hoi polloi.

Another extremely interesting detail, which I and others have reported on, involves the fact that all the big banks on Wall Street (including Goldman) and many of hedge funds (including Citadel) had a meeting at the Fed with Ben Bernanke just three days before the Fed announced its plan to subsidize the sale of Bear to JP Morgan Chase. This was on March 11, 2008; the only big bank that was not invited to this meeting was Bear, Stearns. It strains all credulity to imagine that the rescue of Bear was not discussed at that meeting and that none of the players at that meeting made moves based on those conversations.

However there is a mounting pile of evidence suggesting a sort of widespread culture of insider trading in which a few players (specifically the major banks and a few of the biggest and best-connected hedge funds) have milked a seemingly endless stream of exclusive information, not occasionally or opportunistically but as an ongoing commercial strategy. I get about two or three letters a week from people in the finance business complaining that this or that company is openly advance-trading on a) information from the Federal Reserve about things like interest rate changes, or b) info about big client orders in things like commodities, or c) mergers and the like. Certainly there is a great deal to be suspicious of with regard to the behavior of certain companies in advance of major events like the rescue of Bear Stearns, the collapse of Lehman Brothers, the AIG bailout, the acquisition of Merrill Lynch by Bank of America, the emergency conversions to bank holding company status of Goldman and Morgan Stanley, and the announcement of major bailout programs like the TALF and the P-PIP.

Anyone who knew in advance how or when these deals were going down could make billions almost without trying, and we know that the heads of many of the major banks were in contact with key federal officials during this entire period.

That’s how the oligarchy works.

Next: The nature of oligarchic power

Tackiness in Arizona

I have written before that people tend to go overboard in their public expressions of grief. Ted Rall thinks that as a nation we are descending into tackiness when it comes dealing with the aftermath of tragic events. He cites the memorial service in Arizona as an example of our tendency to turn even solemn moments into kitsch and suggests some Basic Etiquette Following a Massacre:

(1) When interviewed on television never say that your “heart goes out to the victims and their families.” We have heard that hoary chestnut a million too many times. Keep your heart where it belongs, inside your ribcage.

(2) If you are a public official holding a press conference about a school shooting/workplace shooting/terrorist attack, refrain from thanking a long list of local and state officials for their help. This isn’t the Oscars. You haven’t won anything. You are not going to meet Joan Rivers.

(3) Whether attending a memorial service or actual funeral, leave your hoodies, baggy pants and tanktops at home. No baseball caps. No T-shirts. Don’t wear anything with a team logo. Appropriate clothing is formal, black or very dark blue. Men wear suits with ties. Women wear long dresses. Don’t got ‘em? Stay home. You don’t get to be on CNN.

(4) If you know one or more of the victims, ask their surviving relatives whether they would prefer flowers or a donation to a preferred charity. Otherwise simply choose an appropriate charity and make a donation in their name. Do not waste money on flowers and stupid stuffed animals.

(5) Unless the victims include at least one politician, no politician should speak at the service. If there is at least one dead or wounded politician, politicians who do speak should refrain from political rhetoric.

(6) No. Applause. Ever.

Good advice.

When cracks appear in the oligarchic system

Knowledge seeks to be free.

While oligarchic suppression of unauthorized messages can be very thorough, it can never be complete. There will always be people who have a strong urge to know the truth and disseminate it and they will find ways to do so. We have seen in the past that even under tightly-controlled state media systems, an underground press and radio and other low-cost news systems such as pamphlets and wall posters emerge to provide an outlet for those who challenge the system.

In relatively open societies in the US, the challenge for non-oligarchic alternative voices is both harder and easier. It is easier because there is (usually) no overt suppression of other voices by direct censorship. Instead the focus is on marginalizing them, by making them seem extreme so that these voices do not reach a mass audience.

It is harder because the seeming openness of the system makes it harder for ordinary people to see the control of the oligarchy and thus less likely to see the need for alternative views. I am sure that many people in the US think that we are exposed to the full range of news and opinions on TV, in newspapers, and in magazines because we have Fox News and MSNBC, the Wall Street Journal and the New York Times, the National Review and The Nation.

People tend to be not aware of what they are missing. It takes a great deal of media and political sophistication to be aware of what you are not hearing. A good example is Noam Chomsky. He is well known worldwide as an important political analyst and public intellectual and yet you will never see him anymore in the US mainstream media. To read his work or hear him, you will have to actively seek him out or read alternative media on a regular basis. The same is true for a whole host of people. If you do not appear in the major media venues, you and your views may as well not exist. The non-stop cacophony of voices that surround us in the media serves the purpose of creating that non-awareness. In fact, a good way to become better informed is to not watch TV or read the mainstream press but read only the headlines and the bare bones facts of a story and start just thinking for yourself about what it means.

This is why the internet has been so unsettling for the oligarchy. It lowered the cost of admission to the media club to almost zero and so one has had an explosion of voices, most of whom are free to say what they want. The government does not have to worry about the New York Times or CNN ‘going rogue’ because their dependence on advertisers and stockholders is sufficient to keep them in check and to even support government efforts to suppress dissenting voices.

The internet’s openness was tolerable as long as those new voices were scattered and diffuse and uncoordinated, each commanding just a small audience. But the emergence of outfits like WikiLeaks that are able to command widespread attention has really thrown a wrench into the media propaganda model which is why we should expect to see attempts to ‘regulate’ the internet to prevent ‘irresponsible’ (translation: anti-oligarchic) voices form gaining a foothold or by making the cost of business higher by governments using their vast resources to take legal action against smaller entities, thus driving up their costs and putting them out of business.

The WikiLeaks episode has opened a window on the oligarchic structure in the US. The US media likes to portray itself as independent of, and even adversarial to, the government. But when a true challenge to the government emerged, they quickly reverted to their true role of government ally. For example, see how the US media has disowned WikiLeaks and refused to fight or even speak out on their free speech rights, leaving it up to international media to call upon them to protect the First Amendment. It is the US media that fights the idea that WikiLeaks is a journalistic enterprise just like them and thus deserving of all First Amendment protections.

It is important to understand that this abandonment of WikiLeaks is not due to normal business competition. They are not doing this because of business reasons, because they fear that their subscribers and advertisers will shift away from them to WIkiLeaks because the latter is not that kind of operation and does not present that kind of danger. After all, they are giving away their information free to the mainstream media. Those mainstream media organizations that are distancing themselves from WikiLeaks are clearly doing this for ideological reasons, because they are opposed to what WikiLeaks represents which is a source of information that is outside oligarchic control. They act this way because the US media is part of the oligarchy and thus unconsciously picks up the cues that tell it what to do. The US government does not need to do anything. What better propaganda system is there?

WikiLeaks poses a challenge to the oligarchy because even those journalists that have passed through the filters and risen within the system realize that at some basic level, attempts to shut down WikiLeaks is wrong and this is creating cracks in the system. We need to widen those cracks by driving home the message that this is an important First Amendment issue and that what WikiLeaks does is no different from what Bob Woodward does except that he serves the interests of the oligarchy and WikiLeaks does not.

Next: Who makes up the oligarchy and what can we do about it?

Hypocrisy on internet freedom

Glenn Greenwald lists some of the hypocrisies of the US government when it comes to internet freedoms.

He leads off with the one concerning cyberwarfare. While the US government condemns it, it does nothing when Israel openly boasts about using it against Iran.

So as is the usual pattern, it is never the principle that determines what is right and wrong but who is doing it.

Film review: Good Hair (2009)

Hair is an important issue in the black community, getting way beyond the level of attention that people of other ethnicities give it. I first became aware of this fact a long time ago back in Sri Lanka as a student when I first read The Autobiography of Malcolm X (1964). As a young man of the streets, he adopted the then common practice of ‘conking’ (straightening his hair) and he vividly describes his first experience. As he became radicalized he decided that this attempt to adopt the hair styling of white people was a symbol of how much black people had internalized their sense of inferiority and subservience and he went back to his natural look. The 1960’s was probably the high point of black acceptance of their natural hair. Nowadays it seems like the black community, especially women, has gone back to accepting straight hair and to even see it as desirable. One wonders what Malcolm X would have thought about this development.

I had not paid much attention to this question until I saw the documentary Good Hair (2009) last week. It is produced by comedian Chris Rock who acts as the viewer’s guide through the incredibly complex world of hair products and styles aimed at the black community. Rock said his interest in this topic was piqued when one of his very young daughters came to him one day and asked him why she did not have ‘good’ hair. In searching for an answer, he and his film crew explored the economics, psychology, and sociology of the hair business and its users and it is a fascinating journey.

One way to get ‘good’ (i.e., straight) hair is to simply straighten it. I was vaguely aware that this involved the use of some chemicals but was stunned to learn that the main chemical in question in the ‘relaxers’ (as they are called) was sodium hydroxide. I recall almost nothing from my high school chemistry classes but one thing I do remember is being warned about how dangerous this chemical was (it even goes by the name ‘caustic soda’, which should be warning enough) and to avoid any contact with skin. And here were people regularly and routinely putting it on their heads.

Rock does not shy away from pointing out the dangers, having many of the people he interviews describe the pain of the process. They report that is produces an excruciating burning sensation and that if it is not washed off in time can result in serious scalp burns. If it gets into the eye it can cause blindness. To emphasize the dangers, Rock has a scientist put a few drops of it on a piece of supermarket chicken and shows how it burns a hole through the skin and into the flesh. The scientist also keeps an aluminum soda can in a vat of sodium hydroxide and after a few hours the entire can had dissolved. But despite this, even the parents of children as young as three put this product on their heads.

As I watched this, my mind immediately connected it to the former practice of foot binding in China, in that this was another sign of the extreme burdens imposed on women by the demands of society. A group of young high school graduates said that they felt that a black woman with natural hair simply would not be taken seriously in the business world and would be at a strong disadvantage when it came to being hired at all. It seems bizarre that if a black woman lets her hair grow naturally, she is perceived to be making some sort of militant political statement. This may be a relic of 1960s attitudes.

The other process of getting ‘good’ hair is known as ‘weaving’ and this involves braiding the hair tightly onto the scalp, sewing a tight mesh onto the hair, and then sewing hair that has been bundled into thick strands onto it. This process is also quite painful but at least it avoids putting dangerous chemicals on the scalp. The downside is that it is expensive (running into thousands of dollars) because it has to be done by a professional and takes a long time to complete, almost a whole day. Furthermore, once you get a weave, you are quite restricted in your activities. Going to a steam room or swimming, or even getting your hair wet in the rain, are some of the things that are out of the question. You cannot let anyone touch your hair either.

Where does the hair in the weaves come from? It turns out that it comes mostly from India. Apparently when Hindu women make vows to their god, in return for the sought-for favor they have their heads shaved. Hair is a sign of vanity so shaving one’s head is a sign of one’s devotion, a willingness to sacrifice for god. This shaving happens at the Hindu temples in assembly line fashion with people lining up to get it done, a process known as ‘tonsure’. The hair that is cut is then collected by temple officials and sold to hair dealers, and one suspects that some religious leaders may be cynically exploiting the devotion and gullibility of believers to make a tidy profit by encouraging this practice and selling something that they are given for free. India has about a billion people and Rock says that about 85% of them have had their heads shaved at least twice in their lives. That is a lot of hair.

The hair dealers then clean and sort the hair into thick, long clumps (10-14 inches is about the desired length but the longer the better) that are then sealed in plastic packs and shipped off to the US. One Beverly Hills dealer who had a carry-on sized suitcase containing these packs of hair said that he could sell the whole lot in a few hours for about $10,000 to $15,000, which gives you some sense of the scale of the business. Some black women will spend enormous amounts of money on weaves and other hair products, even as they are struggling to pay the rent and utilities and buy food. The irony is that while the majority of customers who buy any kind of hair product are black (they purchase 80% of all hair products sold), the industry is owned and controlled by mostly white or Asian people.

The documentary spends quite a lot of time on the Bronner Brothers International Hair Show held in Atlanta. This is a huge extravaganza where vendors show off their latest products and it culminates in a contest in which four finalists compete to win the award for best stylist. But don’t think that this contest consists of people simply styling hair. It is more like performance art with elaborately costumed choreographed dancers on sets with lights and music and involves stunts like cutting hair while hanging upside down or underwater. It is quite an amazing thing to see.

The politics of hair is tricky and Rock has to walk a fine line. While he clearly wants his own daughters to take pride in the hair they were born with and not want to straighten it or add weaves, he avoids being judgmental about the people who have taken the other road. He wanders through the world of hair with a genial attitude and a bemused expression and gives the film a nice light touch.

This is an excellent documentary that I can strongly recommend. To people like me, it opened up a world that was all around me and yet of which I was almost completely unaware.

Here’s the trailer:

How the US treats its citizens/Glenn Greenwald fundraiser

Glenn Greenwald continues to highlight the plight of US citizen Gulet Mohammed in Kuwait, which I wrote about before.

The Kuwaiti government was willing to release him provided he had a ticket for a direct flight to the US. His family provided it and he was taken to the airport where he was denied boarding with no reasons given, presumably because the government has put him on a no-fly list. If you leave the US, they put you on the list so you cannot return. Since the list is secret, you do not know why you were put on it and how to get off it.

Gulet Mohammed is a Muslim so the government assumes that no one will make a fuss. For others, they use different methods, such as harassing you at the port of entry with lengthy questioning and taking away your computer and any electronic devices each and every time you return, as is happening to WikiLeaks supporter Jacob Appelbaum

This is what the US government under that great Democratic constitutional scholar Barack Obama does to people it does not like.

Glenn Greenwald is holding a fundraiser to enable him to continue his work. As readers would know from the many, many times I link to him and quote him, I consider him to be one of the most important political commentators and defender of civil liberties in the US right now. If I had to identify one blogger whom I consider to be essential, it is Greenwald.

You can see that he is very uncomfortable asking for this support. Please support him if you can.