The Hightower Report

Plutonomism

For the superrich hoity-toities of our land, the democratic populism arising among the hoi polloi is unpleasant, messy, and ... well, so common. Instead of that, they sniff, America should be ruled by an "-ism" of its invention: plutonomism.

Yes, it's an actual word, derived from "plutocracy." It was coined in 2005 by a team of global equity strategists at Citigroup, the Wall Street financial giant. While populism is based on the egalitarian principle of the common good, plutonomism unabashedly espouses the virtue of the rich getting richer.

In a 2006 memo to Citigroup's wealthy clients, lead "strategist" Ajay Kapur declared: "Our thesis is that the rich are the dominant drivers of demand" in the U.S. and other plutonomies. How does a country become a plutonomy? One essential factor, he writes, is "favorable treatment by market-friendly governments [to allow] the rich to prosper." Another is to have corporate CEOs who "lead the charge" on globalization and automation to transfer more of the nation's wealth into corporate profits "at the expense of labor."

Kapur notes that the wealthiest 1% of Americans – whom he calls "the plutonomists" – had benefited disproportionately from recent increases in worker productivity, and he happily forecasted that "global capitalists are going to be getting an even greater share of the wealth pie over the next few years."

Gosh, in this happy world of plutonomics, does anything ever go badly for the rich? Well, it's possible, he admits, because the ever-widening rich-poor wealth gap could lead to a populist backlash. After all, he warns, even in the United Plutonomy of America, the "one person, one vote" system still exists.

Of course, the plutonomism movement is working furiously to replace that with "one dollar, one vote."

Don't Regulate – Restructure

Boy, Obama and the Democratic Senate really socked it to Wall Street with their financial reform bill, didn't they? The American people demanded reform, said the Senate banking committee chairman, and, "This [bill] is their victory."

Hey, those banksters who wrecked our economy deserve to be hit hard. But ... wait. If the bill is so tough, why are all the big bankers smiling? Because, despite Washington's populist rhetoric, they know that the White House and Congress are letting them escape with a mere increase in regulations, keeping their destructive power, overwhelming size, and monopolistic market control intact. They wriggled out of the real populist proposals to break up all "too-big-to-fail" banks and to decentralize Wall Street power. "If you talk to anyone privately," says one investment banker, "there's a sigh of relief."

How did the banksters so deftly dodge the public's demand for real change? Money. In the past year, while Congress' banking committees have been writing the reform bill, Wall Street executives and lobbyists have held 845 fundraising events for the members of those committees, putting millions of dollars into their re-election campaigns.

Lest you think bankers will now meekly accept the regulations in the bill, note that a top hatchet man for the Chamber of Commerce has said, "This is not the end of the process." Even before the House-Senate Conference Committee was appointed to finalize the bill, lobbyists were swarming its likely members, demanding that various regulations be weakened or killed. They're also looking for loopholes in the bill's language, and their lawyers are already preparing court challenges.

Regulations are a rabbit's warren of escapes. The only reforms that will actually stop Wall Street's destructive gambling with our economy are those structural reforms that outlaw, downsize, and decentralize the gamblers.