Corruption in America crosses, and supersedes, political boundaries


Charles Hugh Smith, whom we’ve met in these pages many times before, offers a very interesting – and troubling – article about how prevalent corruption has become in America.

Simply put, corruption is cost-free in America because most of it is legal. And whatever is still illegal is never applied to the elites and insiders, except (as per Communist regime corruption) for a rare show trial where an example is made of an egregious fall-guy (think Bernie Madoff: whistleblowers’ repeated attempts to expose the fraud to regulators were blown off for years. It was only when Madoff ripped off wealthy and powerful insiders did he go down.)

There are three primary sources for the complete systemic corruption of America. One is the transition from civic responsibility for the social contract and the national interest to winner-take-most legalized looting.

This transition is visible in the history of empires in the final stage of collapse. The assumption underlying the social order slides from a shared duty to the nation and fellow citizens to an obsession with evading civic duties: military service, taxes, and following the rules are all avoided by insiders and elites, and this moral/social rot then corrupts the entire social order as elites and insiders lean ever more heavily on the remaining productive class to pay the taxes and provide the military muscle to defend their wealth.

That corruption is now everywhere in America is obvious to all but those adamantly blinded by denial. The JP Morgans pay fines as a cost of doing corrupt business, while “public servants” game the system to maximize their pensions with a variety of tricks: colluding to boost the overtime of the retiring insider; finding a quack physican to sign off on a fake “heart murmur” so the insider pays no taxes on their “disability” check, and so on in an endless parade of lies, scams, skims and insider tricks.

The excuse is always the same: everybody does it. This is of course the collapse not just of the social contract but of morality in general: anything goes and winners take most. Insiders look the other way lest their own skims and scams be contested, and elites and insiders view those who aren’t skimming and scamming as chumps to be pitied.

The second dynamic is that financialization has completely corrupted the American economy, and that corruption has now spread to the political and social orders. Once the financial sector conquered the real economy, it began siphoning 95% of the economy’s wealth to the top .01% and their toadies, lackeys, apologists, enforcers and technocrats.

As they hollowed out the real economy, distorted incentives and made moral hazard the guiding principle of the American way of life, the recipients of financialization’s domination gained the wealth to buy political power from the pathetically corruptible political class.

The corruption that we call financialization corrupted democracy and undermined the social contract by eviscerating the value of labor and creating a pay-to-play political order that’s a mockery of democracy.

The third factor is the decay of America’s institutions into fronts for personal gain. While Higher Education insiders are masters of self-serving PR, the truth is they’re not concerned about their debt-serf “customers” (students) learning the essential skills needed in the tumultuous decades ahead–they’re worried that the revenues needed to pay their enormous salaries and benefits might dry up.

“Education” is nothing but a front for the corruption of self-enrichment by the elites and insiders at the top.

The same is true of “healthcare.” The concern of insiders isn’t the declining health of America’s populace, it’s the decline in revenues as fewer “customers” come in for the financial scalping of emergency care.

. . .

American Exceptionalism has been turned on its head: America is now as perniciously corrupt as any developing-world nation we smugly felt so superior to, and with extremes of wealth and income inequality that surpass even the most rapacious kleptocracies. This destabilizing “exceptionalism” is now the defining characteristic of the American economy, society and political order.

Systemic corruption and the implosion of the social contract have consequences: It’s called collapse, baby, and the rot is now too deep to reverse.

There’s more at the link.  Highly recommended reading (as are all his articles).

Mr. Smith cites a review of a new book, “On Corruption in America:  And What Is At Stake“.

I don’t agree with the author’s politics in many respects, but she makes this point in the interview/review that I think is very telling.

“Myth,” these days, is a word of contempt — meaning something patently untrue. But real myths are profoundly true. They are how our species has been examining itself and its way in the world for tens of thousands of years. When I witnessed the doings of our outsize public figures — caricatures, really — I found myself thinking: ‘We have turned our back on our cultural wisdom, and so we are condemned to live our myths.”

There’s a lot of wisdom in mythology. A grateful god offered Midas a single gift. “Gold!” he cried. It took about seven seconds till the king’s delight transformed to despair. He reaches for an apple to crunch on; it’s gold. He pours out some wine and can’t drink it. Hawthorn wrote a version of the tale, giving Midas a daughter, the light of his eyes, who at his kiss is transfigured into a statue. This is a story about the “Midas disease” — the compulsion to reduce irreplaceable values down to lifeless metal. Or, these days, to zeroes: in bank accounts. Today, the Midas disease is pandemic.

While researching the origins of this myth, I was dumbfounded to discover that Midas was real and ruled in Phrygia — approximately where and when money originated. The Midas myth is about money. This innovation was an entirely new way of storing value, which may have plenty of upsides, but when societies turn it into a yardstick for measuring social worth, there’s no getting enough. So, everything of value is game for being reduced into zeroes. If you put people sick with the Midas disease in charge of your society, devastation will ensue.

Jesus spills money all over the temple floor, throws the furniture around, a whip in his hand. Quite a dramatic action for the Prince of Peace! Did you know the temple of Jerusalem in his day was the most magnificent building complex east of Rome? I didn’t … The high court sat there, the main bank and money exchange. You could say Jesus took on a combination of Washington DC, Wall St., the Vatican, and the military base in Qatar.

At the top of this edifice was a tight-knit coalition of the wealthy and powerful — in today’s parlance, the billionaires. And it was at that moment, according to all four gospels, that this cabal “started looking for a way to kill him.” That is, the billionaires murdered Jesus. Not the “Jews” — who were, in fact, his own community. Interestingly, it couldn’t be done just then, because he was surrounded by a cross-cutting coalition of that community. You might call it the broad-based egalitarian coalition.

There is a lot to learn here: Billionaires in charge of a community’s most sacred values, and the public trust, will ruin their society. The only chance of curbing them is to join together in a broad-based coalition, crisscrossing all identity divides – what Jesus was getting at with “love thy neighbor” — and to relentlessly keep the focus trained on the corruption of that ruling clique. We can’t get distracted by manipulative efforts to divide us.

Again, more at the link.

Speaking as a pastor and chaplain, I find it hard to disagree with Ms. Chayes on this point.  To support her interpretation of the Cleansing of the Temple, Wikipedia notes – and on the basis of my own studies, I agree – that it was far more than just a symbolic cleansing.  “A common interpretation is that Jesus was reacting to the practice of money changers routinely cheating the people, but Marvin L. Krier Mich observes that a good deal of money was stored at the temple, where it could be loaned by the wealthy to the poor who were in danger of losing their land to debt. The Temple establishment therefore co-operated with the aristocracy in the exploitation of the poor. One of the first acts of the First Jewish-Roman War was the burning of the debt records in the archives.”

(Institutional corruption in the religious establishment?  Say it ain’t so!  Where else have we seen this in more recent years?  It’s not just about money . . . )

The danger, of course, is that in tackling corruption, we get sidetracked into opposing all personal ambition and desire for a better life.  That’s a motivator for all of us – or should be – and that drive is what lifts all of society along with those who are lifting themselves.  That’s not a bad thing at all.  Socialism’s great flaw is that it seeks to distribute outcomes equally, rather than allow those who work harder and smarter to earn – and keep – more of the fruits of their labors.  We dare not allow our focus on corruption to snuff out entrepreneurship and hard work at the same time.

Nevertheless, I agree with Mr. Smith;  corruption has become endemic in our business, political and economic spheres.  Consider the prescient warnings of past leaders:

  • President Eisenhower:  “In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.”
  • President Ford:  “A government big enough to give you everything you want is a government big enough to take from you everything you have.”
  • UK Prime Minister Margaret Thatcher:  “The problem with socialism is that you eventually run out of other people’s money.”

All true, and all harbingers of the corruption we see today embedded throughout our society.  The question is, what can we do about it?  I suggest the “Tea Party” movement, the “Occupy Wall Street” movement, and the outcome of the presidential election of 2016, are all signs of growing unrest and rejection by the electorate of the corrupt and unequal status quo.  I think we should encourage more of the same, on both sides of the political aisle.  Get rid of corrupt office-holders;  elect fresh, non-corrupted representatives;  and limit how long they can stay in office, so there’s less time for them to become corrupted in their turn.



  1. Our representatives aren't the only ones who need term limits. The civil service needs term limits even more.

    Philip Hamburger, for example, claims (with good reasons) that the civil service has co-opted elected officials' power to set policy, and has become the leading threat to civil liberties in our era.

    See The Administrative Threat, which is a distillation of his scholarly tome Is Administrative Law Unlawful?

  2. In watching the political debates in the USA, I'm intrigued by the accusations of socialism being bandied about in debates and in the media. I suppose what is defined as socialism largely depends on where your perspective lies, but as an Australian very little of what I've seen or heard in the USA is anywhere near the true definition of socialism.
    No doubt, as in my country, there is a very small cohort who believe in the establishment of a "workers paradise" based on Marxist principles. Also, many of these socialists have also adopted the causes of other social movements such as environmentalism, feminism and progressivism. However, the corollary rarely holds true, namely a belief in some or all of these movements doesn't make you a socialist. Naming people as such is simply lazy, bordering on defamatory.
    If a person believes in some or all of these causes, none requires the implementation of a classic socialist state. Indeed, they prosper best in a healthy, open, vibrant free market environment. A classic example is the issue of climate change. The most successful countries in this field are those that have thrown the issue open to innovation by establishing the trading of carbon in open markets, enabling companies to invest in new solutions and technologies, open new markets and developing long-term sustainable jobs for the future. The people running these companies probably care for the environment, I doubt they are socialists.

  3. The big problem with the 'vote them out' and 'term limits' movements, good first step tha tthey are, is that they ignore reality. For every 1 in office, behind them stands 100+ just as bad ready to take their place. The people in office are a symptom of the problem, not the root of the problem.

  4. I have to agree with Eric – the government bureaucracy is a bigger problem than folks spending 50 years in office. We already have rogue agencies ignoring the officials placed in nominal charge of them, extending term limits would make that problem even worse. Term limits are good but I'd add going back to the 'spoils' system of the early US government, where the incoming administration could get rid of any government employee without cause, just because.

  5. Insiders look the other way lest their own skims and scams be contested, and elites and insiders view those who aren't skimming and scamming as chumps to be pitied.

    I disagree with that characterization, for it is more evil than that. The elites think you should use "the chumps" honesty as a weapon against them. (Saul Alynski) After all, if they weren't chumps, they would be doing the same thing, and when that belief becomes accepted by a majority, our society based on morality & trust disappears.

    “When a society establishes criminals-by-right and looters-by-law, men who use force to seize the wealth of disarmed victims, then money becomes its creators' avenger. Such looters believe it safe to rob defenseless men, once they've passed a law to disarm them. But their loot becomes the magnet for other looters, who get it from them as they got it. Then the race goes, not to the ablest at production, but to those most ruthless at brutality. When force is the standard, the murderer wins over the pickpocket. And then that society vanishes, in a spread of ruins and slaughter.” – Ayn Rand [my emphasis]

    Thus our society is in a race to the bottom, where Antifa & BLM looting businesses form the next step down in the collapse of the US into the 3rd world. And that decent is praised and protected by Democrat officials, the MSM, and University professors. Because in the New World Order they are attempting to create, they see themselves as the Nomenklatura, and not as one of the ruled.

  6. I find that it would help me if I really knew what the term 'corruption' entails. It's easier to understand in a political than in an economic context, at least for me.

  7. Regarding Eisenhower’s much quoted warning of a military- industrial complex, the far more prophetic warning began by mentioning the spread of computers (in 1961!) then warned “of the equal and opposite danger of public policy becoming a captive of a scientific-technological elite.”
    Is this not where modern society stands today?

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