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Industry Capture: How Wall Street is Destroying American Exceptionalism

17 | By Shah Gilani

America is slipping into darkness.

One by one the lights are being turned off in our “shining city on a hill.”

And Wall Street’s greedy hand prints are all over many of the darkened switchboxes.

Of course, politicians’ grubby, filthy fingerprints are everywhere too; but there isn’t enough cyberspace to launch into when discussing that black hole.

Besides, this e-letter specializes in Wall Street indictments.

You’ve heard about regulatory capture. I just wrote about its dark side in this space.

Regulatory capture is when regulators become captives of the individuals and firms they are supposed to be watching, regulating, and disciplining when they break the law.

“Industry capture” is beyond just regulatory capture.

Here’s what I mean…

Industry capture, which is unique to only a couple of American industries (hint: oil is the other one), is when the industry itself becomes so omnipotent, so all-consuming in our lives, so all-consuming of our money, so filthy rich that it buys and sells government officials, legislators, administrations, and presidents. So powerful that it has effectively captured the nation.

What isn’t spoken about, what isn’t generally seen (although most of you who comment here see it), is that Wall Street holds our nation captive.

Far from being mere unintended consequences on the road to facilitating capital formation and anchoring the capital markets, Wall Street turned a fairly straightforward one-way street leading to more, bigger, and better businesses across the country and the world into a superhighway with more twists and turns than a grand prix course.

And worse, there are no speed limits, and the roads go both ways at the same time, and the toll booths are manned by Armani-clad, Manolo Blanik-wearing bankers, traders and their flame-retardant and blame-retardant suit-wearing managers, and executives that tally the take.

How did an industry that accounted for between 5% to at most 7% of GDP in this country in the 1980s go to being responsible for between 17% and 20% of GDP by 2007?

That’s a lot of paper shuffling for some very lofty fees and fringe benefits.

But, of course, our GDP was made all the better and more stable and secure because of the Herculean efforts of all those banksters and pranksters… NOT!

We’ve been set up like bowling pins. Used like mailboxes in an alley where the Street’s bills pile up with public’s name on them, special-delivered at the direction of the new postmasters, Jamie D., Lloyd B., and Victor P., or DBP & Company for short.

Yeah DBP as in don’t bother pretending you don’t know we own your asses. Their mantra is “we make it rain, we bring the pain, we tally the gain, thank you again.”

Industry capture is a dead end for us, but a highway to riches for our captors.

If we’re ever going to get off this unlucky four-leaf clover interchange where we’re going round and round ending up at the same toll booths again and again, we’re going to have to fire most of the politicians in America, most of the bank executives, and most of the captured regulators.

And for that matter, the current president, who spoke a tough game but was himself captured by Wall Street money and fiddled with healthcare while Wall Street burned on.

Not that Mitt, whose glove is full of Wall Street money, will be any better. He might be worse.

Ron Paul, where in heaven’s name are you? Have you forsaken us?

By the way, I’m not leaving you hanging as to what the games are that are being played that turned Wall Street into easy street. Starting tomorrow in Money Morning, I’ll be detailing the cold, hard facts about what unintended consequences that have been planned all along.

Shah

17 Responses to Industry Capture: How Wall Street is Destroying American Exceptionalism

  1. Michael says:

    As I previously commented and never received a reply from Shah: how about Public Banking as an alternative to Wall Street manipulation, modeled after The State Bank of North Dakota?

  2. Phil Steinschneider says:

    Mr. Gilani,

    Unfortunately, everything you lament is directly attributable to a day in 1913: December 23rd, to be exact.

    It wasn’t the day the music died.

    It wasn’t the day the earth stood still.

    It wasn’t the day the clown cried.

    It was the day that sound money was killed.

    The reason the financial sector now makes up between 17% and 20% of GDP is because money can be created out of thin air from debt.

    Because the Federal Reserve and bankers have the right to print money that is worth nothing and backed by nothing at will, we are now owned by them. And so is Congress along with the president.

    But the day will come when the debt is so great, no matter what’s done, it will no longer be worth the paper…err…air…from which it was created.

    Shame on us.

  3. siera says:

    I believe that you are absolutely correct in the finance and oil industries being in regulatory capture. But I believe you could also include the medical industry to. If combined they represent a big slice of our annual GDP.

  4. Bill McKinney says:

    Makes me want to run to the tall grass. You and your group will profit from the information you plan on passing along. I guess we all need to eat. This world is seeming inside out and upside down.

  5. Sailor Jo says:

    Dear Shah,
    your thoughts are good food for more thoughts.

    Allow me to add the thought of an outsider. As there is no country or city named “America” I do not know which place you are talking about. There is a continent with that name that includes everyone from Alaska to Chile. So I assume you mean the USofA. Secondly, you are mentioning something that you call exceptionalism. If I understand you right, the people in the US are exceptional. I agree. There are more murders than anywhere else, there are more people incarcerated than anywhere else, the country is more backward on social issues than any other country, and people think, when it comes to science as if they were living in the 19th century by using inches and pounds and gallons, and so on.

    If that is the “American Exceptionalism” you mean you are right. The country is heading for darkness.

  6. Frank B. says:

    Where, indeed, is Ron Paul? I’m trying every avenue to get the word out to write-in RP! However, I think the fix is in and it won’t much matter what we do. Our congressmen and women were NOT intended to become CAREER politicians, constantly feathering their nest at the expense of the rest of the country. Term limits and balanced budget amendments need to be put in place! Of course, ABOLISHING the federal reserve and return to the GOLD standard are much needed!

    Shah, please keep on keeping on, you help keep hope alive!

    FB

  7. Doris Kelsey says:

    I agree, Ron Paul would be a better choice that what the corporatocracy is offering. Have you looked into Jill Stein (green party)? Rocky Anderson (justice party)? Or, Gary Johnson (libertarian)? Another bought off regulator is our Secretary of Agriculture, Tom Vilsack, ex-lawyer for Monsanto. Seems his wife is running for office in Iowa but is taking money from the anti-meat industry scammer, the Humane Society of the United States. Yup, the H$U$ has it’s finger in the USDA. No wonder they are promoting ‘meatless mondays’. Then there is Sarah Conant, a H$U$ plant in APHIS, regulating plants and animals, and refusing to permit horse slaughter even though congress mandated it last november. Refusing to do her job, because her ‘other’ employer directs her to screw the ranchers.

  8. EdInvests says:

    I find you odd, and not much different from most of the PHD’s I have known in the past. That is not a compliment, You are the exception in one respect because you meddle in things beyond your industry, or at least try to expand your understanding beyond your tunnel focus. The enery industry is undoubtedly key to mankind’s survival as we know it. Neither you or I change that, but we can make the next generation’s life a little better if we do it right. It starts and ends not necessarily with the President ,but with Congress. We no longer have people representing the best interests of the Country, but worrying more about the party, re-election, and using their position to gain personal wealth. I take that back on the President comment. GWB took us on a horrible course of wars and deficits, but it was Congress that let it happen.
    You may think I am a nut, but I am far from it. I look at things from a very big vantage point with no pre-conceived notions. You have a far better voice to fix it than I can. We learn nothing from the past and when we finally figure it out, it may be too late.
    Ed

  9. Bill Shepherd says:

    You are absolutely correct.
    This is the very point made in detail by Stiglitz in his book The Price of Inequality. Everyone should read his timely book.

  10. Richard Washburn says:

    Shah…I could not agree with this piece. But I would also include the European banks in this industry capture.scenario. From my perspective everything that the EU and ECB have been doing the last three or four years it to protect the big European banks. The world is increasingly being controlled by one big banking oligarchy!! …Regards, Richard

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