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To remind, this is our quarterly request for donations. If you want the information and analysis that this site provides to continue, you must support the site. As the alternative is the presstitutes or Ministry of Propaganda, it is a good decision to support this site.
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commitment with my own. PCR
Many thanks to those who donated. I appreciate the commitment that readers have to this website. I match your commitment with my own. PCR
A Conversation with Paul Craig Roberts by Gary Corseri
Transitions; Morals; Alliances and Dissolutions
CounterPunch, June 2, 2014
“This old anvil laughs at many broken hammers.
There are men who can’t be bought.
The fireborn are at home in fire.”
GC: I’ve been reading your work fairly regularly over the past 4 years. Within this year, I’ve reviewed your two most recent books: The Failure of Laissez-Faire Capitalism and How America Was Lost. I know something about your background as Assistant Treasury Secretary during the Reagan Administration, and as a former associate editor and columnist for the Wall Street Journal, etc. You and I have corresponded a little, mostly about setting up this interview. I’m glad to meet you in person.
At one point in Lost you relate the story of a friend who had lunch with former colleagues of yours who lamented your shift in politics from a conservative “Reaganite” to someone now writing radical articles (posted, I’ll add, at some of the best websites in the world!). These former colleagues took the attitude of “Poor Craig! He could have been really rich, like us. He just had to play along… he just had to tone it down!” So, my first question is: What’s the matter with you? Why didn’t you take the easy path? What kind of credo drives you?
PCR: Well, you know, being a prostitute is not an easy path! It’s not a role that anybody really wants. . . . it’s just people who don’t have alternatives who get stuck in that role. I had alternatives. I held the William E. Simon Chair in Political Economy, Center for Strategic and International Studies, Georgetown University for 12 years after I left Treasury. I was Business Week’s columnist for about 15 years and also columnist for Scripps Howard News Service. I was an adviser to important financial institutions back when they still invested instead of gambling. I think that what some of my former colleagues were saying is that they had made more money by selling out. That was their claim to fame—that they were now rich. [He laughs here. ] So, I felt sorry for them. My friend who related the story told me that he stood up and told them that he didn’t know he was having lunch with a bunch of whores and left! [More laughter]
GC: I like to read history—to get a grip on where we are now, to see the great continuum. You often write about the generation of our Founding Fathers; their intentions in our Constitution, our Declaration of Independence. One of the pictures on your Web articles shows you standing in front of a painting of what looks like a Revolutionary War leader—I think he’s Alexander Hamilton. Can you tell me who is in the painting and how do you identify with him? What values do you share?
PCR: That’s Alexander Hamilton, the first Secretary of the Treasury. It’s a copy of the original. It was given to me when I was appointed Assistant Secretary of the Treasury. It hasn’t any other kind of meaning…. A lot of people think it implies that I’m a Mason, because the person in the portrait has his hand in his waistcoat—like Napoleon–and some think that this is a secret sign of Masons. But, of course, Napoleon wasn’t a Mason. It has been explained to me by art historians that the reason for this is that it’s very difficult to paint the human hand, and that the price for a picture with the human hand was much greater, so at the time it was the convention to get the human hand out of the picture! I don’t know if that’s true or not….
GC: It sounds apocryphal!
PCR: That could be….
GC: The reason I mention it… many of my “progressive” friends are critical of Hamilton as the founder of the Central Bank, and so forth…. Do you have any feelings about that?
PCR: When you’re forming a new country, no one really knows exactly what to do, and there were differences among the Founding Fathers… and I am not really the kind of historian to handle this issue. He was right and he was wrong. I think everybody was trying to do what they thought was right, and, on the whole, they succeeded. But… the troubles since then are not entirely due to their inability to anticipate….
GC: Everything changes….
PCR: Well, the Founding Fathers knew that power would accrue to Government. That’s why they tried to break it up into 3 coequal branches, hoping that the jealousies between the branches would keep the overall power low. Unfortunately, they did not anticipate the War Against Southern Secession, which destroyed States’ Rights and elevated the power of the Central Government…. Since then, we’ve had other interest groups step forward: the Bankers who wanted the Federal Reserve so that they would have a way of endlessly expanding credit; and, of course, we’ve had the so-called “War on Terror,” which is a way to get rid of the Constitution itself! We can’t really say that the Founding Fathers should have anticipated all of this….
GC: I’m going to ask you a question that most journalists will never ask you. Because you do touch on these matters in your books and in your articles…. You talk about the Arts… You mention in LOST that we need a new Orwell…. I think we need a new Shakespeare as well–someone to help us define our language better, to use it as a cutting tool. So, let me ask you: What is the role of the Arts in creating a new political culture?
PCR: Well, you’re getting over my head here, Gary. I’m not… I don’t have the kind of background to answer that question in any satisfactory way.
GC: Okay… this is somewhat related….In the 60s and early 70s, there was a flourishing of political and cultural energies. Is anything like that happening now? How can we help it along?
PCR: I think there was some energy for change with the Occupy Movement. It was put down with force and intimidation…. In a very real sense, those forces in the 60s and 70s have been bought off…. You don’t see [for example] the kind of Black leadership that you had in the days of Martin Luther King…. Just think about the Rappers—when they came on the scene they were socially conscious, the songs were challenging. Now, some of them are billionaires! I saw the other day that a rapper was selling his company and Apple was going to buy his company and the guy’s going to end up a billionaire! So… where are these energetic forces going to come from? The success of the elites has been to co-opt whatever movement comes along.
GC: Okay… thanks for indulging me in my particular field…. Back to your expertise now…. You make a strong case that it wasn’t “supply side” economics that screwed up our economy and destroyed our middle class; rather, that had more to do with the Clinton Administration’s de-regulation and off-shoring of jobs…. Now, one definition of “government” is “to regulate.” When we accepted “deregulation” weren’t we basically “de-governing” ourselves—giving up the protections of government, oversight functions, etc.? And when that happened, didn’t we turn into one big neo-con/neo-liberal hairball—liberalism and conservatism blurred into a crazed Godzilla whose main “business” is war?” How can we get back to better, sensible, more humane regulation and governance?
PCR: I’ve always regarded regulation as a factor of production. If you have too much, you’re in trouble; and if you don’t have enough, you’re in trouble. The judgment of getting the right amount is open to debate. But, certainly, financial deregulation was irresponsible, because we had had the experience of a deregulated financial system [during the Great Depression] and we saw what an unsatisfactory outcome that was! So, repealing safeguards against repeating those mistakes was a great error. And, it was done by the Banks, which essentially purchased enough “Think Tanks” with grants and donations, and enough university faculty—with grants and donations and speaking opportunities–and purchased enough senators and Congressmen to get the Glass-Steagall Act repealed—and this was a fundamental error. Among other serious mistakes: the position limits on speculators was removed, and now speculators can control the markets; they no longer provide a positive function, they basically loot! They use their power for their own profits…. Also, allowing the kinds of financial concentration, where you have the banks “too big to fail.” Whoever heard of such a thing? If banks are too big to fail, you don’t have Capitalism. The justification for Capitalism is that it eliminates those corporations that don’t make efficient use of resources. Those are the ones that fail. If you don’t let them fail, then you have a subsidized system that makes inefficient use of resources. All of this was a disaster.
GC: And this all happened under Clinton, basically….
PCR: The repeal of Glass-Steagall happened under Clinton. The subsequent deregulations happened under George W. Bush. For example, when Brooksley Born, the head of the Commodities Futures Trading Corporation, tried to perform her federal duty and regulate over-the-counter derivatives, she was blocked by the Chairman of the Federal Reserve, the Secretary of the Treasury and the head of the Securities and Exchange Commission! They took this to Congress and shouted her down and forced her out of office. The position they had was an ideological position for which I know of no evidence: that markets are “self-regulating” and, therefore, that markets are better regulated without regulators. This is absolute nonsense! And, it’s hard to believe that people in Congress didn’t know it was nonsense. I attribute it to the influence of the Banks—the money…. And, lo and behold, the senator who led the deregulation was very quickly rewarded—he was made Vice-Chairman of one of the “too big to fail” banks, somebody who’s paid millions of dollars to go around giving speeches. This is the way this System works when private interests become too powerful. In the United States today, the public and private sectors have merged–because the powerful private sectors essentially determine the policy of the government. There isn’t really a government independent of Wall Street, the military-security complex, the Israel Lobby, the mining, energy and timber business, agribusiness—these groups write the laws that Congress passes and the President signs…. And, the Supreme Court has made it even easier for them because it has ruled that it’s legitimate for corporations to purchase the government—
GC: “Citizens United” and—
PCR: That was the first one… and then the most recent one—
PCR: In other words, there are no limits on the ability of corporations to elect the government they want. It’s like former President Jimmy Carter said a short time ago: “At this time, the United States does not have a functioning democracy.” Well, he’s right. We have an oligarchy. And the oligarchy rules, and the government is some sort of cloak for the rulers. You never see anything happen against the oligarchs! For example, one of the senior prosecutors for the Securities and Exchange Commission retired recently; and, he gave a speech and said that his most important cases had been blocked by the “higher-ups” who hoped to get good jobs with the banks that they were protecting! This is the way the government works today. It is pointless to say, “we need more regulation.” The regulators are “captured” by private interests. It was about 30 years ago that economist George Stigler said that regulatory agencies invariably wind up “captured” by the industries they’re supposed to regulate.
GC: What was his name?
PCR: Stigler…. He won the Nobel Prize… not for that observation. He was a colleague of Milton Freedman and was jealous of Freedman’s renown among ordinary people. Whereas, Stigler had renown only among academics. [Laughter] At any rate, I don’t think you can simply say that we’ll restore regulation because the regulations that are on the books can’t be enforced; the higher-ups are protecting those they’re supposed to regulate—so they can get major jobs when they leave government service.
GC: The “revolving door”!
PCR: It’s a sea change. And I think the only way you recover from something like this is through a catastrophe—something comparable to the Great Depression. But even that might not do it, because the way the forces are arrayed now it seems that the so-called forces of “Law and Order” are in behalf of the private interest groups. Look at who busted up the Occupy Movement. And we now have all this information of all the federal agencies being armed to the teeth, even agencies like the Social Security Administration, and the Post Office! The other day, I read where the Department of Agriculture has put in a purchase order for submachine guns! So what is all this about if not to suppress any sort of popular resistance to an economic collapse or catastrophe? And so it may be that even a catastrophe won’t let the United States recover.
GC: Are we past the point of no return?
PCR: Who knows? But, I gave you reasons that that could be the case….
GC: I do think we are in a great transitional period. I’m pessimistic, as you are. I think a lot of people admire your work because you made a transition, a transformation in your life—from being a conservative, Reaganite type to a radical who now writes against the system—
PCR: Well, Gary, let me interrupt you here…. Actually, that’s a mistaken perception of me…. Because, people think if you work in a Democratic Administration it means you’re a liberal or a Leftie; if you work in a Republican one, it means you’re a conservative or a Right Winger. But, actually, I was writing against the Establishment of the time! The supply-side movement was an attack on the Keynesian movement. The Keynesians were the Establishment! I wasn’t attacking them for any ideological reasons; I was attacking them because their policies had ceased to work, and we were confronted with stagflation—which meant worsening inflation and worsening of unemployment; and they had no solution except to freeze everybody’s wages, salaries and prices—which was an absurd solution; it wouldn’t have worked! I was as much “on the outs” at that time as I am now. I haven’t made any transition. I just see mistakes and speak against them.
GC: You’re against rigidity. You want to be flexible; apply the best solution for the time….
PCR: I’m against ideological thinking. I’m against unrealistic thinking. I’m against the brutality of corruption! Because it endangers the country. We’ve already lost the Constitution because of this. I’m not a radical when I defend the Constitution! Today, it’s becoming “anti-American” to defend the Constitution! Not even the Supreme Court will defend it! So, it’s not a transition I made from being a conservative to a radical. I’ve always been challenging the Establishment—whether it’s Left Wing or Right Wing. When I began as an Economist in Washington, the Keynesian Establishment was essentially a Democratic Establishment. Today, the Establishment is the “exceptional, indispensable Americans”— a self-definition which gives you the notion that you are superior to others. It’s like Putin said a year or so ago in one of his speeches: Americans can say that they are exceptional; but, in fact, God created us all equal.
GC: That was in his New York Times op-ed piece.
PCR: Wherever it was… when you start making these claims that you are some sort of ubermensch, you start sounding like the Nazis. And you then start acting like you have the right to run over other people, other countries because History chose you to be the hegemon! Well, this is extremely dangerous—not just to others, but it’s dangerous to Americans; because the next step is, you lose your civil liberties. And you’re faced with indefinite detention or you may be murdered! Simply because somebody in the Executive Branch suspects you might be a terrorist. So, it’s not radical to complain against the loss of the Constitution. That’s a very conservative position historically.
GC: I think it’s fair to say you’re a moralist—
PCR: I’m not an immoralist, I hope!
GC: I’m wondering about your background…. You mention God, not thinking of ourselves, and so forth… What about your upbringing? Can you tell us how these values were inculcated?
PCR: You know, it was a different world. People had to be able to look themselves in the mirror—and that meant you had to have behaved correctly. Today, it has almost turned around! The only way you can look yourself in the mirror is if you got the better of someone else. It’s like the Wall Street culture has taken over…. And, if we look at American foreign policy—what it’s about is prevailing. It’s not about diplomacy; it’s about the application of force. Our diplomacy is: If you don’t do as we say, we’re going to bomb you into the Stone Age. This is not the country I grew up in!
GC: What country did you grow up in? Did you go to Church every week…?
PCR: I grew up in the United States. And the people I grew up with—their values, their way of life—were formed in earlier times; their behavior, their appearance, their way of thinking reflected the kinds of values that were the basis of the country—when such values were still effective or somewhat effective. It was before those values had been worn out and discarded. So, in that sense, I’m a remnant of when we were finer than we are today…. And the kinds of things that happen today simply couldn’t have happened earlier. I think that a great deal has been lost….
GC: Staying with this theme of things lost; values worth retaining and reclaiming…. You bring up Revolution in some of your recent work, and even in your book, Lost…. Other writers I respect talk openly now about Revolution—Chris Hedges, for example…. I wonder if it’s possible to organize Global Resistance against what is, in fact, a Global Empire? Is there any chance for us to unite globally… and resist?
PCR: I have no way of knowing…. I suspect it would be very difficult. There’s so much disinformation, misinformation and propaganda. I suspect what will lead to change will simply be failure. The United States is probably in a failing mode; because it has probably overreached; its ambitions are unrealistic; and its economic base is being hollowed out. When you spend 20 years exporting your manufacturing and industrial jobs, and all of your tradable professional service jobs—like software engineering, for example—you deprive your own people…. When jobs that American university graduates used to take are now offshored, or filled by H1-B foreign workers who are brought in at much-reduced pay, then you are decimating your own population which is losing its vitality, its ability to rise as all the ladders of mobility are dismantled. There’s no growth in incomes and career prospects become dim. The country that is so foolish as to export its own economy, to give its gross domestic product to other countries—that country hasn’t any prospects. And, if that country’s power also rests heavily on its currency being the “reserve currency”… and the US government erodes confidence in the dollar by incessantly creating new money in order to support new debt—as the Federal Reserve has been doing since the 2007-2008 economic collapse—you undermine the confidence of the world in your currency. And, if they abandon its use as the reserve currency, then your power has gone down the drain…. And we see now, that the Obama regime threatening Russia with sanctions—it shows the complete unawareness of the United States government of its precarious position, because when you threaten a major country with sanctions their alternative is to leave the dollar-paying system, as the Russians are now doing, along with China. So, if you drive them out of the payment system, what happens to your power? And others will follow…. I think the prospect for change will be in some sort of American collapse. It has to be coming because every part of the foundation has been undermined.
GC: Has that been intentional? Some people argue that the globalists actually do want to pauperize the American population, and make it docile, and increase our military strength everywhere while at the same time the people are becoming—
PCR: Gary, that doesn’t make any sense to me…. Because, the globalists are American-based, and there’s nothing they gain by losing the power base. If Americans are impoverished, certainly the globalists aren’t in control in China. And, they’re not in control of Putin. So, it can look like that, but I think it’s mainly just hubris and stupidity. What was Hitler thinking when he decided to invade the Soviet Union? He wasn’t thinking.
People make mistakes. And I wouldn’t think that, as mistake-prone as people are, that they can organize the world in conspiracies. That implies that people don’t make mistakes—especially these conspiracies that people think have been going on for centuries. We see every day that people make mistake after mistake. Mistake-prone humans undermine the prospect of global conspiracy. Again, what do globalists gain from undermining their own power-base? Their assets are here. Without American power the globalists have no power. Conspiracies do exist. Operation Gladio was a conspiracy. Operation Northwoods was a conspiracy. 9/11 was a conspiracy (regardless of who did it). Washington’s overthrow of the Ukraine government was a conspiracy. But these conspiracies served specific purposes. They were not general conspiracies. And they were conspiracies by government, not by rich elites.
GC: I do have a question related to this. I’ve been preparing for this, so let me go through it. If you were one of the super-elite and had the power they have, is it not likely that you would conspire with your peers to maintain your power against the masses who opposed you? Like the Titans who would rather eat their children than surrender power to the upstart gods….
PCR: Well, logically, it seems that you would do that. But, what we do know is that most people are so competitive with each other that they can’t get along. I mean, even families can’t hold together! So, when these guys are out competing about who has the biggest yacht… or one’s mad because he’s only got 3 Penthouse playmates, and the other guy’s got half a dozen… and one guy’s mad because he’s only got 10 billion dollars but the other guy’s got 15 billion… and his jet plane is bigger than my jet plane! When you see all this endless competition between individuals among the elite—the notion that they’re somehow going to sit down and agree on how they’re going to do anything…. I mean, nobody can hold together! The Beatles couldn’t hold together! Who had a better thing going than the Beatles? It’s “me first!” First guy comes along and he says, Okay, I’m going to be the leader of this…. He steps in and soon everybody else is trying to get him out because they want to be the leader! And the policy goes to hell! In the Reagan Administration—it was all we could do to get the President’s economic program out of his own Administration: it was a knock-down, drag-out fight! If Treasury had not been willing to take that burden, it wouldn’t have happened. We had to make endless enemies within our own government to do what the President wanted! And there aren’t many people in government who will do that! It just so happened that that particular Treasury had some feisty, fighting people, and they were backed up by the Secretary. That’s rare. Usually, nobody can agree! Or, everybody thinks what he wants was the agreement! And each proceeds on the basis of his own agenda. So, I think that the elites—not all of them, there are some very nice ones—but most of the politically active ones are mainly concerned with increasing their wealth and power. As to whether they can form up to something tight that holds a line like an old-time Mafia group–today the Mafia can’t even hold together. If the Mafia can’t hold together, how can these competitive, rich, educated guys who are jealous of each other?
GC: I’m trying to make a point that… if they can’t hold together against each other… but, against the masses, don’t they hold a solid line?
PCR: I don’t think there’s a “solid line” because I think there are disagreements among elites. Some of them are really nasty, and some of them have a social conscience. I knew Sir James Goldsmith—he was a billionaire; he spent the last years of his life fighting for the people against the E.U. I knew Roger Milliken. He was a textile magnate, a billionaire. He spent his entire life–not on yachts with Playboy bunnies, but fighting for American jobs—in the Congress. He was totally opposed to all this offshoring of jobs. That doesn’t mean there’s not a whole bunch of bad ones; they do conspire—but they’re conspiring for themselves. Plus, you know, if a group of conspiratorial elites was seen as a threat to some particular country—like the United States—the CIA would assassinate them. If the CIA wants to kill every billionaire, they can do it tomorrow. So, it’s really not so much about individuals as it is about corporate interests, or sector interests—agribusiness, Wall Street–those guys seem to fix it somehow so that all of them can gain from it, even though they try to cut each other’s throats. That’s a different kind of maneuvering—and that’s the kind we have to be worried about at this time.
GC: You make some solid, perhaps indisputable points, that there isn’t one unified “elite.” That some of the worst aspects of human nature—our selfishness, greed, hubris, even stupidity—militate against such unity. Still, having no desire to join that group… I wonder about the possibility of alliances among us children of a lesser God? Ralph Nader has a new book, UNSTOPPABLE. He proposes an alliance of Left and Right. I’ve been wondering for a long time: Is there any way we can work together and transcend these political divisions, these ideological divisions, and find common ground?
PCR: I have no idea. I have nothing against it. You know, I’m not an activist. Nader is. I’m a thinker, I analyze. I can see where explanations or perceptions are wrong, and how wrong explanations, and wrong economic theory, and wrong perceptions–like the “Russian threat”—can lead to total disasters. I try to tell people what really is going on. I think we actually do live in the Matrix. And our perceptions are controlled by propaganda: some of it intentional, some unintentional. Some just because people don’t think things through. I try to show people what reality is in so far as I can ascertain it. At least I can show them a different way of seeing what is happening. That doesn’t make me a political activist, because I’m not trying to organize people, I’m trying to wake them up, trying to make them aware. And, what they do with that—I don’t know. If they organize successfully, and they can find leaders capable of pulling off something like that—that’s great! I don’t really know the answer about forming alliances. I suspect that aspects of the Matrix are falling away; people are starting to realize that American propaganda doesn’t make sense; that we destroyed 7 countries in the 21st century—in whole or in part. I don’t think many people are falling for the propaganda that Russia invaded Ukraine and stole Crimea. I don’t think that’s the perception in Europe. It could be that the ability of the formal propaganda—the intentional lies–may be losing convincing power. If so, it makes it easier for people to escape the unintentional lies, or the misperceived ways of thinking. So, there could be big change…. If the E.U. failed, it would have a huge impact on American power. We would no longer be able to claim that we had a “coalition of the willing” or that we were acting in the name of NATO. The aggressive behavior of the United States would be recognized for what it is—war crimes! If Germany, for example, were to say: Look, we have too many relations with Russia, we see our future differently than Washington sees it….
GC: So, you must feel heartened by the E.U. parliamentary elections this past week—the rise of the “Euro-skeptics”—
PCR: Those elections were not about “race” and immigrants. They were about dissatisfaction with the whole concept of the E.U.—the loss of national sovereignty. The Greeks, the Italians, the Portuguese, the Irish—they feel like they’ve lost their sovereignty. The only ones that are “holding on” are the Germans, the French and the British—so it starts to look like the E.U. is some sort of Anglo-German-Franco Empire. And even the Germans, French and Brits have their issues with it. The Germans don’t like it that their government is a puppet state of Washington.
GC: So, this is one positive thing that’s happening now—
PCR: These dissolutions are positive. But, I don’t have a plan on how to bring them about. I think if you organized such a plan, you’d be met with overwhelming opposition…. But, if you haven’t got a plan—it’s more than likely to happen. To wind this up: I think that humans are capable of every kind of error, every kind of stupid mistake. And this means that holding anything together, even a family, is difficult. Half of the marriages end in divorce! So, you’ve got two people in love, two people intimate together, and they can’t hold together. So, somehow you’re going to have a plot that’s going to overwhelm the world? It’s not going to happen! I think you’re going to have continuing errors, crises, and mistakes. And I think the United States has made a massive number of them since the Clinton Administration. All the kinds of restraints that George H. W. Bush had in foreign policy—remember the first Iraq War? That was to get them out of Kuwait. We didn’t go on to attack Iraq. This is the kind of restraint that lets a country continue to exist. But, since that time we’ve seen the most reckless kinds of behavior. I think it’s turning the world against us, and the consequences could be catastrophic. I think we can place our hope in the fact that what’s here today won’t stand, because it’s shaky and the mistakes are multiplying. It’s going to come down. And, when it does–that gives the opportunity to change. And to try to bring that about through some revolutionary movement is not going to succeed. But, it will succeed on its own.
GC: To quote Shakespeare: “the readiness is all.”
PCR: Yes. Right!
Paul Craig Roberts is a former Assistant Secretary of the U.S. Treasury, and a former columnist for Business Week. He held the William E. Simon Chair in Political Economy at the Center for Strategic and International Studies for a dozen years after leaving the Treasury. He has authored ten books, including, “The Supply-Side Revolution” (Harvard University Press, 1984, translated and published in China in 2013), The Failure of Laissez Faire Capitalism (2013), and “How America Was Lost” (2014). His official home page is: http://www.paulcraigroberts.org/.
Gary Corseri has published novels and poetry collections, and his dramas have been produced on PBS-Atlanta and elsewhere. He has performed his poems at the Carter Presidential Center and has taught in US prisons and public schools, and at US and Japanese universities. Contact: email@example.com.