"There is no actual democracy in any part of the world which is attached to the Wall Street centered financial system" (Ian Welsh)

"Politicians aren’t paid by you (their salaries are the least part of their real income); why would you think they care about your concerns? . . . Politicians compete for the money and favors of the rich, and what they sell is the ability to wrangle you: to pass the austerity bills, to cut the benefits, to privatize the jewels of the public system, to force through the multi-trillion dollar bailouts. They control government for the benefit of the rich."

-- Ian Welsh, in his post
"What passes for smart on the Greek debt crisis"

by Ken

I had set aside a post of Ian Welsh's which contains an important point about the relationship between the current world financial system and democracy, the point that, by forcefully maintained design, there is no connection, owing to "the complicity of all major political parties in the process (notice there is no party to vote for if you want to default)." I set the post aside because it's made in the context of debunking a left-friendly post by Kevin Drum (endorsed by Digby) arguing, as near as I can tell, that the Greek debt situation has no solution; in any case, Ian considers so far off the mark as to require debunking, and I needed to be able to take time to try to digest the argument.

I think I get it, sort of. The gist is this:

those countries could simply slap on currency controls, which experience shows (most recently and clearly in the Asian currency crisis of the 90s), works. And permanent austerity, which is what France and Germany want to impose on Italy, Greece and Spain (with the apparent cooperation of their political classes, I might add) will erode the value of the bank holdings in time anyway. Drum’s not exactly wrong, but it’s the other options, which never get mentioned, which matter.

There are economic tools for dealing with these issues. Capital and currency controls are one of them, the distinction between default (we’ll pay you eventually, as opposed to we’ll never pay you) is another. The question of who is being bailed out (private investors, in large part) is another. And bailing out those investors is a political act, their money is their political power. The current political class, who is complicit with the current monied class, of course wants to bail them out.

All of this is before we even get to the horribly anti-democratic nature of all of this: the repeated refusal of the political class to allow referendums, the complicity of all major political parties in the process (notice there is no party to vote for if you want to default), and so on.

This is discussed in more detail in the actual post, but what really brought me back to the post is the original point that I always wanted to come back to, which is more or less encapsuled in the potted quote I've put at the top of this post. Here's the relevant section of the post:

There is no actual democracy in any part of the world which is attached to the Wall Street centered financial system. Calls can run up to 1000:1 against TARP and it will pass. Strong majorities can be for or against particular policies and if the elite disagrees, that’s all that matters. There are no parties to vote for if you are against the current system.

In a sense, this is fair. Westerners thought that they could have consumer democracy: they didn’t have to participate in it except at election time, when they would vote for parties and platforms paid for and produced by someone other than them. Coke(tm)/Pepsi(tm) politics -- you have a choice, you can choose either Coke or Pepsi! Politicians aren’t paid by you (their salaries are the least part of their real income); why would you think they care about your concerns?

You don’t pay for politicians or politics. This is the Facebook rule: if you don’t pay the freight, you aren’t the customer, you are the product. Politicians compete for the money and favors of the rich, and what they sell is the ability to wrangle you: to pass the austerity bills, to cut the benefits, to privatize the jewels of the public system, to force through the multi-trillion dollar bailouts. They control government for the benefit of the rich.

And the rich pay all the way down the line. They control the media, right down to the bottom, to make sure that what is discussed is what they want discussed, in the terms they want it discussed. That default isn’t that bad: forbidden. That currency controls mitigate damage in these circumstances: forbidden. That lenders will lend to defaulting countries almost immediately: forbidden.

I will discuss the pointlessness of media and “popular sentiment” in a post soon. In the meantime, realize that even the supposed left feeds you intellectual sewage on a regular basis.

This isn't likely to be a brand-new idea for most DWT readers, but I think we tend to set it aside -- what else can we do with it? -- and pretend that it isn't the case. You may recall the point Ian made way back when that the OccupyWallStreet uprising is "necessary but not sufficient," in terms of bringing about actual change. I don't know what to do with this knowledge, but I do know that pretending it isn't so probably won't work.

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