I'm trying to remember what Simon Johnson saw as the time to the next financial crisis in a discussion with Bill Moyers two or three years ago (in what might have been one of the last editions of the Bill Moyers Journal before Moyers retired). Certainly, Johnson predicted no more than ten years to the next crisis, but my recollection is that he said something like three to seven years. That's just my recollection, but we can be sure of one thing — Barack Obama, Democrats and Republicans, despite weak public protestations to the contrary, have sent very clear substantive signals. Wall Street and megabank risk-taking, misconduct, and even criminality will be thoroughly underwritten by the United States government and, by extension, a willfully ignorant American populace.
This all fits into what a growing number (including Paul Krugman and Nouriel Roubini . . . I don't know about Messrs. Johnson and Kwak) have described as a large, perhaps the largest, transfer of wealth from labor to capital ever.
My own few is that the phenomenon is even broader than that, encompassing economic and legal, even constitutional, features. A transfer of wealth and economic and political power from the general population to an increasingly rapacious class of American oligarchs is underway. My view unifies developments across the economic and political spectrum:
- the Supreme Court's creeping grant of the status of personhood to corporations,
- the gross disparities in wealth and income (and all concomitant benefits, like health, education, longevity, etc.),
- Bush and Obama attacks on civil liberties (including Habeus Corpus, Posse Comitatus, whistleblower protections, protections for journalists — the few who actually investigate US government misconduct),
- the Democratic-Republican assault economic protections for elderly Americans.
- the effective criminalization of poverty,
- the cultural glorification of the New American Virtues — wealth, fame, good looks, longevity, fashion, etc.
I do not like the "tipping point" terminology, but the trends that accelerated in the Reagan years (having arguably begun in the Carter years) and that have continued through every president since may now have crossed some threshold, an increasingly formal grant of power to a tiny percentage of elite Americans. Any new bailouts will only be part of larger developments.