- Bankers rule the world. A new Swiss Federal Institute
of Technology study says so. Written by Stefania Vitali, James Glattfelder
and Stefano Battiston, it's titled "The network of global corporate
- "We find that transnational corporations from a
giant bow-tie structure and that a large portion of control flows to a
small tightly-knit core of financial institutions. This core can be seen
as an economic 'super-entity' that raises new important issues both for
researches and policy makers."
- The study says 147 powerful companies control an inordinate
amount of economic activity - about 40%. Among the top 50, 45 are financial
firms. They include Barclays PLC (called most influential), JPMorgan Chase,
UBS, and other familiar and less known names.
- Twenty-four companies are US-based, followed by eight
in Britain, five in France, four in Japan, and Germany, Switzerland, and
the Netherlands with two each. Canada has one.
- Moreover, "top ranked" companies "hold
a control ten times bigger than what could be expected based on their wealth."
- As a result, they have enormous influence over political,
financial, and economic activity.
- In his book titled, "When Corporations Rule the
World," David Korten said they're able to transfer enormous amounts
of power, wealth and resources from public to private hands with government
complicity. Money power and concentrated wealth in few hands especially
- "These forces have transformed" financial institutions
and other corporate predators "into instruments of a market tyranny
that is extending its reach across the planet like a cancer, colonizing
ever more of the planet's living spaces, destroying livelihoods, displacing
people, rendering democratic institutions impotent, and feeding on life
in an insatiable quest for money" and profits as a be and end all.
- Only bottom line priorities and market dominance matter,
not human welfare, environmental sanity, peace, equity and justice.
- Transnational giants are the dominant institution of
our time - especially financial ones with money power control of everything.
- They decide who governs and how, who serves on courts,
what laws are enacted, and whether or not wars are waged. Corporate dominance,
especially financial power, and democratic values are incompatible.
- They operate ruthlessly as private tyrannies. They're
predators. We're prey, and every day we're eaten alive. They do it because
they can, and in America by mandate.
- Publicly owned US corporations, including financial ones,
must serve shareholders by maximizing equity value through higher profits.
They do it by exploiting nations, people and resources ruthlessly.
- Social responsibility doesn't matter. Neither does being
worker-friendly, a good citizen, or friend of the earth. Bottom line priorities
alone matter. Failure to pursue fiduciary responsibilities means possible
dismissal or shareholder lawsuits.
- Yet nothing in America's Constitution or statute laws
endow corporations with their rights. They usurped them by co-opting Washington,
the nation's courts, state capitals, and city halls.
- As a result, over half the world's largest economies
are corporations. Financial ones controlling the power of money are most
- Corporate personhood enhanced their power, yet imagine.
Although corporations aren't human, they can live forever, change their
identity, reside in many places globally, can't be imprisoned for wrongdoing,
and can transform themselves into new entities for any reason.
- They have the same rights and protections as people without
the responsibilities. As a result, they operate freely unrestrained, especially
financial giants controlling the power of money at the public's expense.
- Beginning in the late 1960s, financialization grew more
dominant. Economic control began shifting from industry to finance. Corporations
are now seen as bundles of assets, the more liquid the better. A new monopoly
finance capitalism developed to exploit it.
- FIRE sector (finance, insurance, and real estate) predators
capitalized. Casino capitalism gained prominence. Today it thrives. Major
players took advantage, profiting hugely from speculation, chicanery and
- A burgeoning financial superstructure gained a life of
its own. Today it's omnipotent, especially in America and Europe. Their
business model involves grabbing everything that smells money, no matter
what harm is caused.
- Money doesn't buy everything, but it buys enough influence
to matter. The smartest guys in the room take advantage, buying politicians
like toothpaste. Democracy's just a figure of speech.
- Only wealth and power matter. Enough of them turned financial
giants into monsters. Whatever they want, they get, including the right
to operate freely outside the law, manipulate markets, bilk investors,
strip-mine nations and people for profit, and get bailed out at public
expense if overreach.
- Under Obama and European leaders, the worst of bad practices
flourish. Foxes guard the henhouse. Inmates run the asylum. Regulators
don't regulate. Investigations aren't conducted. High-level criminal fraud
gets wink and nod approval. Nothing is done to curb it.
- Nor do public considerations matter nor is sustained
low inflation long-term growth pursued as long as bankers get paid. Today,
it's issue one in America and troubled Eurozone countries.
- Wall Street dominance matters most in America. In Europe,
"Troika" power is omnipotent - the IMF, EU and European Central
Bank (ECB). Nations trapped under euro straightjacket rules can't devalue
their currencies to be more competitive, monetize debt freely, or legislate
fiscal policies to stimulate growth.
- Instead, they're entrapped by banker diktats demanding
tribute. In other words, financial coup d'etat authority runs sovereign
governments. They occupy them rapaciously, making rules, setting terms,
issuing demands, and pressuring, bribing or otherwise forcing political
leaders to acquiesce. If not, they're replaced.
- Working households bear the burden through layoffs, wage
and benefit cuts, higher taxes, and other austerity measures to assure
bankers are paid.
- According to Michael Hudson, the system:
- "shift(s) planning power into the hands of high
finance on the claim that this is more efficient than public regulation.
Government planning and taxation is accused of being 'the road to serfdom,'
as if 'free markets' controlled by bankers given leeway to act recklessly
is not planned by special interests in ways that are oligarchic, not democratic."
- "Governments are told to pay bailout debts taken
on not to defend countries in military warfare as in times past, but to
benefit the wealthiest layer of the population by shifting its losses onto
- As a result, social inequality proliferates. A new Organization
for Economic Cooperation and Development (OECD) report discusses the damage
over the last three decades among its 34 member states. They include America,
Japan, Western Europe, and others.
- Titled "Divided We Stand: Why Inequality Keeps Rising,"
it discusses conditions from the early 1980s until the 2008 global economic
crisis. Its impact alone left 200 million workers unemployed compounded
by more imposed austerity.
- Among OECD countries, the top 10% is nine times better
off than the bottom 10%. America, Israel and Turkey are the most unequal
industrialized nations at 14 to 1. In Britain, Japan, Italy, and South
Korea, the gap is 10 to 1.
- Rising inequality also affected "traditionally egalitarian
countries" like Germany, Denmark, and Sweden. They went from 5 to
1 in the 1980s to 6 to 1 today. Mexico and Chile are worst off with gaps
of 25 to one.
- In America, the top 1% controls 20% of all income plus
a far greater percent of total assets. Concentrated wealth extremes also
affect European countries, following America's pattern.
- The report says income inequality "first started
to increase in the late 1970s and early 1980s in some English-speaking
countries, notably the United Kingdom and the United States, but also in
- Since the late 1980s, it's grown more widespread. At
the same time, labor rights were sacrificed to benefit corporate bottom
line priorities. In addition, finance capital grew omnipotent. As a result,
money power rules everything.
- Imposed austerity greatly impacted working households
in troubled Eurozone countries and others facing economic hard times. Greece
has been especially hammered by repeated layoffs, wage and benefit cuts,
as well as higher taxes.
- In early December, unelected Prime Minister Lucas Papademos
(a former Bank of Greece governor and ECB vice president) force-fed through
parliament more austerity cuts. Receiving an eight billion euro loan was
conditional on doing so.
- As a result, imposed measures include another five billion
euros in spending cuts, 3.6 billion in new taxes, pensions cut 15%, and
wages slashed more than already. In addition, more ahead is planned.
- Papademos said "(t)he financial crisis in our country
is not a passing storm....It will take many years" of greater worker
sacrifices to assure bankers are paid.
- In fact, the more wage, benefit, pension, and other cuts
ordinary people bear, the weaker Greece's economy becomes from lost purchasing
power with a working population heading toward serfdom in a nation no longer
fit to live in.
- Millions of Greeks are now impoverished. Unemployment
approaches 20%. For youths between 15 and 24, it's nearly 50%. Years more
imposed pain is planned to assure bankers are paid. As a result, expect
Greece sooner or later to explode.
- In addition, the more debt Greece assumes, the less it's
able to service it, and faster it heads toward debt peonage. According
to Michael Hudson, moreover, "(a) basic mathematical as well as political
principle" explains that "(d)ebts that can't be paid, won't be."
- In early December, unelected Italian Prime Minister Mario
Monti (former EU official installed by Goldman Sachs, known to some as
"three-card Monte") introduced his own austerity package.
- To service Italy's $1.6 trillion debt, it includes attacking
its social security pension system. In retirement, families depend on it.
Nonetheless, retirement age eligibility will be raised to 66 from 58 by
2018, inflation-adjusted increases will end, and to qualify fully, workers
must contribute from wages for 42 years.
- In addition, value-added taxes will increase by 2%, and
firing workers will be easier than ever. As in Greece, more cuts are planned,
targeting workers to benefit bankers, other corporate favorites, and Italy's
- Portugal's new austerity cuts will see take-home pay
down 27% since 2010. Its 2012 budget reduces spending by 4.4% of GDP by
cutting healthcare and other benefits.
- It also raises value added and other taxes, extends working
days by 30 minutes with no added pay, and eliminates bonuses equal to two
- These measures follow earlier ones. They included cutting
public sector wages 10%, eliminating four holidays, slashing overtime pay
50%, reducing pay for shift work, imposing "time banks" for greater
employer flexibility over when employees must work, making firings simpler
and cheaper, imposing shorter fixed-term contracts, ending rest breaks,
and lowering unemployment benefits.
- A Final Comment
- Financial tyranny runs America and Europe. As a result,
public anger grows.
- Can revolutionary sparks be far behind? Expect pain levels
eventually to cross thresholds of no return. Anything after that is possible,
good or bad.
- Hopefully a better world will emerge, free from banker
occupation. It's our only chance!
- Stephen Lendman lives in Chicago and can be reached at
- Also visit his blog site at sjlendman.blogspot.com and
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