President Barack Obama speaks to the media after meeting economic advisers in the Oval Office. Sitting from left are, Peter Orszag, the White House budget director, Ben S. Bernanke, chairman of the US Federal Reserve, Obama and Timothy Geithner, US treasury secretary. (Photographer: Roger L. Wollenberg/Pool via Bloomberg)
By Paul Street
This Op-ed was originally published on Truthdig: http://www.truthdig.com/report/item/it_takes_a_ruling-class_village_to_staff_the_white_house_20160828
The people our leaders surround themselves with say more about their policies than their rhetoric.
A recurrent theme in major speeches given in July at the 2016 Democratic National Convention in Philadelphia held that Democrats like Barack Obama and Hillary Clinton look to “we the people” instead of rich, powerful and purportedly great individuals like Donald Trump to guide the United States. Repeating a prominent refrain in Obama’s 2008 campaign, top Democrats said the operative words for Americans aren’t “I” and “me” but rather “we” and “us,” as in “si se puede” (“yes we can”) — a chant repeated during Tim Kaine’s and Obama’s speeches. Here’s how Clinton worked this leitmotif in Philadelphia:
Don’t let anyone tell you that our country is weak. We’re not. Don’t let anyone tell you we don’t have what it takes. We do. And most of all, don’t believe anyone who says: “I alone can fix it.” Those were actually Donald Trump’s words [at the Republican convention] in Cleveland. And they should set off alarm bells for all of us. Really? “I alone can fix it?” Isn’t he forgetting? … He’s forgetting every last one of us. Americans don’t say: “I alone can fix it.” We say: “We’ll fix it together.” Remember: Our Founders fought a revolution and wrote a Constitution so America would never be a nation where one person had all the power. Americans [will “Stand Together” to build] a country where the economy works for everyone, not just those at the top. Where you can get a good job and send your kids to a good school, no matter what ZIP code you live in. A country where all our children can dream, and those dreams are within reach.
The Revolving Door
That was all very stirring, but who actually comprises the “we” that makes executive branch policy in the name of the common good when either Democrats or Republicans hold the White House? Not the nation’s working- and middle-class majority, that’s for sure. The Dutch political scientists Bastiaan van Apeldoorn and Nana de Graaff recently constructed a richly detailed career profile of the US presidency’s top “grand strategy makers” (GSMs) — holders of key policymaking Cabinet and senior advisory positions — over the administrations of the 42nd, 43rd and 44th presidents: Bill Clinton (1993-2001), George W. Bush (2001-09) and Barack Obama (2009-17). Their findings are like something out of Karl Marx’s and Frederick Engels’ notion of “the executive of the modern state” as “nothing but a committee for managing the common affairs of the whole bourgeoisie.”
By van Apeldoorn and de Graaff’s calculations, 23 (more than 70 percent) of Obama’s top 30 GSMs had “top-level corporate affiliations” — executive, director, senior adviser or partner in a law firm — prior to their appointment to the US executive branch. These 23 were linked through a combination of board memberships, executive positions and advisory roles to 111 corporations. These “affiliations in many cases display a revolving door pattern, indicating that the actors are not just closely tied to but actually themselves members of the corporate elite.”
Elite travelers in and out of top positions in the Obama White House include Timothy Geithner, Jack Lew, Peter Orszag, Ken Salazar and Tom Donilon. Geithner went from being Citigroup Chair Robert Rubin’s handpicked head of the New York Federal Reserve Board to serving (Wall Street) as Obama’s first Treasury secretary to his current position as CEO of the leading Wall Street private equity firm, Warburg Pincus. Before replacing Geithner atop Treasury, Lew was chief operating officer at Citigroup’s alternative investment division, focused on risky and complex proprietary trading schemes.
Orszag left his position as Obama’s Office of Budget Management director to become vice chair of global banking and chair of financial strategy and solutions at Citigroup and now serves as vice chairman of investment banking and managing director at Lazard. (Salazar and Donilon will be discussed later in this report.)
“Perhaps,” Robert Reich writes, “it was not entirely coincidental that the Obama administration never put tough conditions on banks receiving bailout money, never prosecuted a single top Wall Street executive for the excesses that led to the financial meltdown and even refused to support a small tax on financial transactions that would have generated tens of billions of dollars in annual revenues and discouraged program trading.”
The ultimate ruling-class, revolving-door role model is Rubin himself, mentor to both Geithner and Orszag. Before his positions at Citigroup and his continuing place co-chairing “Wall Street’s Think Tank” — the Council on Foreign Relations (CFR) — Rubin chaired Goldman Sachs and then became Bill Clinton’s top economic adviser and Treasury secretary, serving as the chief architect of the financial deregulation that helped set the stage for the epic financial crisis of 2007-09. Citigroup was the leading immediate beneficiary of that deregulation and would be the financial institution that exposed the federal government to the greatest potential loss during the great state-capitalist bailouts that followed the epic financial implosion that Citi and other top banks caused.
This oligarchic composition of top White House personnel is hardly unique to the age of Obama. Twenty-one (70 percent) of Bush II’s GSMs (linked to 87 corporations) and 18 (60 percent) of Clinton’s GSMs (linked to 48 corporations) held such elite corporate stations.
The numbers get worse when you include GSMs who took such positions after they served in those presidencies. Broadened that way, the numbers for Clinton are 25 of 30 (83 percent) linked to 197 corporations and 27 of 30 (90 percent) linked to 157 companies for George W. Bush. By last year, seven former Obama GSMs had rotated back into top corporate roles after their White House stints.
The leading faction of capital represented in these GSM positions across the last three two-term presidencies is the financial sector and is overwhelmingly linked to “transnationally oriented capital.” Van Apeldoorn and de Graaff find that the “overall composition of the corporate background of these grand strategy makers” is “broad in terms of sectors,” with “US transnationally oriented capital” in the lead and “the financial sector predominat[ing] among the corporate links of all three administrations.” Finance’s prevailing role indicates the global orientation of the Fortune 500 interests that hold sway in the US presidency, “as financial capital is by definition more transnationally mobile than productive capital.” The legal and consultancy firms (e.g., Kissinger Associates) that have together provided more than a fifth of all GSMs since 1993 principally represent multinational corporations and investment firms.
"Perhaps it is not entirely coincidental that the last three presidential administrations have overseen a significant loss of jobs and opportunity for the working-class majority in an ever more globalized New Gilded Age wherein the top 0.1 percent owns roughly as much wealth as the bottom 90 percent."
Perhaps it is not entirely coincidental that the last three presidential administrations have overseen a significant loss of jobs and opportunity for the working-class majority in an ever more globalized New Gilded Age wherein the top 0.1 percent owns roughly as much wealth as the bottom 90 percent — an age of neoliberal austerity for the many, and vast governmental subsidy, protection and bailout for the wealthy few.
The Policy Planning Group Filter
The revolving door between top corporate/financial and government positions and the promise of heightened remuneration in the “private” sector (after one does Big Business’ bidding while “serving” in the “public” one) is a very big and often underestimated part of this overall system of class rule. Also unduly neglected is the role that elite neoliberal and corporate-financial-networked policy planning bodies play in staffing, socializing, solidifying and doctrinally schooling top US executive branch personnel. The key institutions here are the CFR, The Trilateral Commission, the Bilderberg Group, the Rand Corp., The Aspen Institute, the Atlantic Council, the Brookings Institution, the Center for Strategic and International Studies, the Peterson Institute for International Economics, the Hoover Institution, the Carnegie Corporation of New York/Carnegie Endowment for International Peace, The Rockefeller Foundation, the Foreign Policy Association, the Committee for Economic Development and The Bretton Woods Committee.
These core policy organizations (with the CFR in the lead) share three basic properties: a strong commitment to the domestic and global “Open Door” expansion (non-territorial but not without considerable reliance on the US and US-sponsored military force) of American transnational “free market” capitalism (corporate, state and financial); principal funding by transnationally oriented Fortune 500 corporations and financial institutions; the ubiquitous presence of their top personnel both in the elite “private” (corporate, financial and legal) sector and in White House GSM positions.
Of Obama’s 30 GSMs, van Apeldoorn and de Graaff find, fully 25 (83 percent) held prior top affiliations with one or more of these planning groups, totaling 162 such affiliations. The elite policy groups’ presence was slightly higher in the Clinton White House (26/209) and similar in the Bush presidency (22/211).
Another part of the not-so-popular profile for those who become GSMs, supposedly planning domestic and foreign policy on behalf of “we the people” in the US presidency, is training at one or more of the nation’s and world’s elite ruling-class universities, where neoliberal ideology and values prevail. Twenty-five of Obama’s (himself Harvard Law-pedigreed) first 38 Cabinet and top advisory picks had a degree from an Ivy League university, MIT, Stanford, the University of Chicago, Oxford or Cambridge.
“Lady Klynton Kissinger Sachs”
Will things be any different in the likely Clinton 45 White House? One would have to be very naive to think so. It’s not for nothing that Hillary Clinton is known on Wall Street as “Lady Klynton Kissinger Sachs.” The consistently war-hawkish Clinton is the quintessential power-elite and ruling-class insider. She was minted and socialized at such ruling-class institutions as Oxford, Yale Law, Rose Law, the Walmart board of directors, the Democratic Leadership Council (dedicated to pushing the Democratic Party further to the corporate-friendly right during the 1980s and 1990s), the White House (eight years as a highly policy-empowered first lady), the globalist Clinton Foundation, the CFR and the US State Department. She and her husband “operate in … a world awash in money and connections … [a] very privileged place,” as The New York Times’ Carolyn Ryan recently said. She is the candidate of campaign finance and of (exorbitant) speaking-fee choice for Goldman Sachs, Citigroup, the CFR, the Chicago Mercantile Exchange, Robert Rubin and the rest of the nation’s transnationally oriented corporate and financial aristocracy — including a remarkable number of pinstripe Republicans who do not trust the “unhinged” Trump. As New York Times columnist Maureen Dowd cleverly reflects:
All these woebegone Republicans whining that they can’t rally behind their flawed candidate is crazy. The GOP angst, the gnashing and wailing and searching for last-minute substitutes and exit strategies, is getting old. They already have a 1-percenter who will be totally fine in the Oval Office, someone they can trust to help Wall Street, boost the US Chamber of Commerce, cuddle with hedge funds, secure the trade deals beloved by corporate America, seek guidance from Henry Kissinger and hawk it up. … The Republicans have their candidate: It’s Hillary.
Personnel Is Policy
But it’s not just about Hillary Clinton. It takes a ruling-class village to make policy for the few in the name of the many. Clinton’s vice presidential pick, Tim Kaine, is a financial-sector darling who backed fast-tracking the arch-global corporatist, Wall Street-backed Trans-Pacific Partnership (TPP). Her campaign manager, John Podesta, is a legendary ruling-class inside-outsider. A former chief of staff for President Bill Clinton, Podesta has headed a major Washington, DC, lobbying firm whose clients have included BP, Citigroup, Walmart and Lockheed Martin. He founded the Center for American Progress (CAP), which has become a virtual policy arm of the neoliberal Obama White House and — as The New York Times reported after Obama appointed him as a special adviser in December of 2013 — “taken millions of dollars in corporate donations and has its own team of lobbyists who have pushed an agenda that sometimes echoes the interests of those corporate supporters.” The CAP poses as a “progressive,” even “left-leaning” alternative to right-wing think tanks like the Heritage Foundation, but it really embodies a kind of reconstructed “Third Way neoliberalism” that is deeply captive to global corporate and financial interests. Podesta also is president of the Clinton-Kaine Transition Project.
Clinton’s presidential transition team is what the liberal-left political commentator and activist Norman Solomon calls “a corporate presidency foretold.” Besides Podesta, the team’s chair is Salazar, a former US senator who strongly supports the highly unpopular TPP and angered environmentalists and cheered Big Carbon by backing offshore drilling and fracking during his years as Obama’s secretary of the Interior. He’s a partner at WilmerHale, one of the world’s most politically powerful law firms, representing multinational capital at home and abroad — making him another example of the revolving-door phenomenon.
Also on Clinton’s transition leadership team is Donilon, a member of the Bilderberg Group’s steering committee. After serving as Obama’s national security adviser from late 2010 through the spring of 2013, he became a distinguished fellow at the CFR and resumed his prior longstanding position as a partner in the leading multinational corporate law firm O’Melveny & Myers.
Other senior Clinton transition officials are longstanding, Democratic Leadership Council-style operatives Neera Tanden (a Yale Law graduate and president of the CAP), Maggie Williams (partner in a leading Washington, DC, management consulting firm and former director of a top mortgage lending firm that collapsed in late 2007) and Harvard Law graduate Jennifer Granholm (whose pro-Big Business record as a two-term Michigan governor helped score her lucrative positions on the boards of Universal Forest Products Inc. and Dow Chemical).
According to William K. Black, who has held top federal regulatory positions, what we are seeing in this group “is complete domination by what used to be the Democratic Leadership Council. … Very, very right-wing foreign policy. What they call a muscular foreign policy … a euphemism for invading places. Very, very tough on crime … [and pro-] mass incarceration. And the economic side, all in favour of austerity. All in favour of privatization. Tried to do a deal with Newt Gingrich to privatize Social Security. And of course, were all in favour of things like NAFTA.”
It’s no small matter. “The transition team,” Black notes, “is the one that is both deciding what are we actually going to make our policy priorities in the magic — again a cliché — first 100 days? But more than that, who will the top people be?”
There’s something of a false dichotomy in Black’s knowledgeable reflections. A longstanding and accurate Washington maxim reminds us that personnel is policy.
Clinton’s Wall Street bankrollers have always known populace-pleasing, egalitarian-sounding rhetoric is just part of the game. It goes with the populism-manipulating territory that lies at the longstanding, dark heart of American ‘capitalist democracy.’
And there’s a translation for what Black calls “our policy priorities.” The real meaning is their policy priorities, with “they” referring to the 0.1 percent.
“It’s Just Politics”
What about Clinton’s widely advertised, Bernie Sanders-influenced “shift to the left” during the recent primary campaign? A report published last year in the widely read insider Washington journal Politico was titled “Hillary’s Wall Street Backers: ‘We Get It.’” As Politico explained, “Populist rhetoric, many say, is good politics — but doesn’t portend an assault on the rich. … It’s ‘just politics,’ said one major Democratic donor on Wall Street.” A Democrat at a top Wall Street firm told Politico that Clinton’s outwardly populist rhetoric was “a Rorschach test for how politically sophisticated [rich] people are. … If someone is upset by this it’s because they have no idea how populist the mood of the country still is.”
Clinton’s Wall Street bankrollers have always known populace-pleasing, egalitarian-sounding rhetoric is just part of the game. It goes with the populism-manipulating territory that lies at the longstanding, dark heart of American “capitalist democracy.” They reasonably expect a President Hillary Clinton to drop her current, nominal opposition to the TPP as soon as possible.
The People Who Own the Country …
It’s common to see all of this as discontinuous with, and even as a betrayal of, the US founders. It’s a comforting but historically gullible sentiment. While Clinton is correct that the nation’s founding elites rejected monarchy, she failed to note that they led a national independence movement and wrote a Constitution to create a militantly undemocratic property-owners’ (including slave owners’) republic founded on the belief that — in the words of leading constitutional framer John Jay — “the people who own the country ought to govern it.” The New England clergyman Jeremy Belknap captured the fundamental idea behind the founders’ curious notion of what they liked to call popular government. “Let it stand as a principle,” Belknap wrote to an associate, “that government originates from the people, but let the people be taught … that they are unable to govern themselves.”
There is a difference, however, one that actually reflects better on the aristo-republican founders than on today’s corporate and financial ruling class. Prior to the onset of the neoliberal era in the 1970s, Noam Chomsky has noted, the United States “had been, with ups and downs … a developing society, not always in pretty ways [quite an understatement — see this at once brilliant and horrifying history of US cotton slavery], but with general progress toward industrialization, prosperity and expansion of rights.” Since the triumph of finance capital, however, it’s been about “de-development … a significant shift of the economy from productive enterprise — producing things people need or could use — to financial manipulation.” It’s also been about obliterating decent American jobs through technical displacement and capital and jobs export and the ruination of livable ecology — the cancellation of a decent future and the economy and society “where all our children can dream, and those dreams are within reach.”
The only reason that a dangerous, white-nationalist, uber-narcissist and Breitbart-wielding hatemonger like Trump — with his bombastic promise to “make America great again” partly by restoring lost US industrial supremacy — is even still in shouting distance of Clinton is that millions of working- and middle-class Americans know in their bones that she is part of that great dark cancellation, foreclosure and enclosure.
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