Is President Donald Trump’s top counterterrorism adviser, Sebastian Gorka, a member of a Hungarian far-right, Nazi-allied group? members of the Vitézi Rend elite order confirmed Sebastian Gorka took a lifelong oath of loyalty to their group, which is listed by the U.S. State Department as having been under the direction of Nazi Germany during World War II. Vitézi Rend was established in 1920 by self-confessed anti-Semite and Hitler collaborator Admiral Miklos Horthy.
Questions first emerged about Gorka’s ties to the group after the website LobeLog published photographs of Gorka wearing a Vitézi Rend medal on his lapel at a presidential inauguration ball January 20th. Like many members of the Vitézi Rend, Gorka has also listed his name with a lower-case “v” in the middle—Sebastian L.v. Gorka—including during his 2011 testimony before the House Armed Services Committee. Gorka has denied reports of his involvement with the Nazi-allied group
Larry Cohler-Esses talking:
I worked together with my colleague in Budapest, Lili Bayer, and we were going off of some of the work that was done at LobeLog and with others, where people noticed that Sebastian Gorka wore the medal of the Vitézi Rend, and asked him why, and he said, “Well, it’s a way to honor my father, who spent years fighting fascism and spent years fighting communism.” His father was born in Hungary. His parents fled Hungary after the 1956 revolution. And Sebastian Gorka, himself, was born in London. He wore these medals. He told the press that it was just about his father. And Lili, my colleague in Budapest, was able to find three senior members of the Vitézi Rend in Hungary who said, “No, he’s actually a member” “He’s actually a member.” And this began to seem very notable, because I found that the organization, because of its history, was listed by the State Department in its current Foreign Affairs Manual as a group under the direction—historically, during World War II, under the direction of Nazi Germany. Because of this, the Foreign Affairs Manual listed that there was a presumption of inadmissibility to immigrants who are affiliated with this organization.
Now, to be clear, there’s a couple of nuances here, and I should be very clear about this. After World War II, under the terms of the treaty with Hungary and the Allies, the Vitézi Rend was forcibly disbanded. But it reconstituted itself outside of Hungary among exiles who were loyalists to Admiral Horthy, the wartime ruler of Hungary, with the same ideals, with the same leadership and the same ideology. And after the fall of communism in 1989, the Vitézi Rend came back to Hungary and reconstituted itself there. It split into two factions based on personal leadership. And Sebastian Gorka, we were told by the members of the group, is affiliated with the faction called the Historical Vitézi Rend. We looked a lot at what Gorka himself has written. He has often written in publications. He’s written in publications that are notably anti-Semitic. He’s partnered, to start a political party in Hungary, with known anti-Semites from the far-right Jobbik party. But we have not found that he, himself, has ever said or written anything anti-Semitic. But the question is one about his partners and who he works with and whether he actually is a staunch opponent of anti-Semitism, when he works closely with groups like this.
the Vitézi Rend has some pretty firm rules. You do not get to wear the medal and use the “v” initial unless you join. And joining involves taking a lifelong oath, a oath of fealty to the organization and its principles and to Hungarian nationalism, which the organization is steeped in. We spoke with a senior member of the group, who took note of the “v” that he used both on his doctoral dissertation in Hungary and when he testified before Congress. And he said, “Of course. No ‘v’ without the oath.” So, under these terms of the organization, if he was trying to honor his father, he was dishonoring the rules of the organization that his father was honored by. And I cannot read his mind. I was not in Hungary. But we then found three separate sources in the organization who said he did take the oath, he was initiated in the formal initiation ceremony into the organization.
his status as an American citizen and as a legal immigrant could be undermined. I’m not an expert in immigration law, but in our reporting we spoke to Bruce Einhorn, who was an immigration judge for 17 years. He now teaches immigration and nationality law at Pepperdine University. And perhaps most importantly for this unique situation, before that, he was deputy director of the Justice Department’s Office on Special Investigations. This is the—this was the unit in the Justice Department charged with finding and deporting Nazis and members of other extremist groups who got into the United States by lying about or hiding their background. And he told us that someone who is asked, as you are asked in these applications for immigration and citizenship, about the organizations you joined, and you don’t write it down, is vulnerable to a reversal of their legal immigration status or their citizenship status. He told us that there would be defenses for Gorka if he was prosecuted, but as a prosecutor with OSI for that many years, he said, “This is a case that I would take up. It’s a legitimate case. And it would be a challenging one, but it’s a winnable one.” So, that is the state of the technical legal arguments involved, but they all spring from the fact that he was obligated, if he was a member, to disclose it at the time of his immigration and citizenship application.
there is a phenomenon, that we have commented on in The Forward, where you have people who, because of the role Israel plays in the Middle East and because of their bias against Muslims, they like Israel. And yet, domestically, they can be anti-Jewish. It is possible to be anti-Semitic and pro-Israel. It’s a phenomenon that’s emerged. I don’t know if Gorka is that. As I said, we have never found that Gorka wrote anything anti-Semitic or anti-Jewish. What we found are these troubling associations. He said in his White House official statement that it was absurd and outrageous for anybody to say that he was anything other than opposed to anti-Semitism. I don’t know how you define opposition to anti-Semitism, but partnering with a group like Vitézi Rend and with former members of the far-right, anti-Semitic Jobbik party would exclude many definitions of being opposed to anti-Semitism.
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On January 19, 1861, runaway slave Lucy Bagby Johnson, 18, was arrested in Cleveland by US federal marshals in the company of her owner, a wealthy Virginia slave owner named William Goshorn. Johnson had escaped several months earlier, making her way to Ohio, where she gained employment as a domestic. Arrested and taken to and from prison past crowds of protesters, Johnson was prosecuted under the Fugitive Slave Act of 1850, a law that prevented her from testifying on her own behalf. She was ultimately placed on a train and sent south across the Mason-Dixon line that separated “slave” and “free” states, and back into bondage in Virginia.
On February 8, 2017, Guadalupe García de Rayos, an undocumented worker living in Arizona, was detained by US Immigration and Customs Enforcement (ICE) officials during a routine visit to ICE’s Phoenix office. Arrested by authorities acting under President Donald Trump’s new anti-immigrant executive orders, García de Rayos, a mother of two teenagers and a US resident since 1996, was spirited away for deportation past hundreds of protesters, among them her friends and family. Like Johnson 156 years earlier, she had no recourse to the courts.
History doesn’t repeat itself, but it often rhymes, or so the saying goes. Several commenters, among them Columbia University historian Eric Foner, have noted similarities between the Fugitive Slave Act, which was a major cause of the American Civil War (1861-1865), and Trump’s January 25 executive orders entitled “Border Security and Immigration Enforcement Improvements” and “Enhancing Public Safety in the Interior of the United States.”
The infamous Fugitive Slave Act, or the “bloodhound law” as the abolitionists called it, enlisted local police in the North as agents of the slave owners by imposing a $1,000 penalty on any law enforcement official who did not arrest an alleged runaway slave, based on as little as an affidavit of ownership from a Southern court. The law precluded the arrested individual, now bound for deportation to slavery, from having a jury trial or being able to testify on his or her own behalf in court. Its specific intent was to prevent cities and towns in northern states from providing sanctuary to runaway slaves and absorbing them into the growing wage-earning working class.
The law made Canada the ultimate destination for most runaway slaves, via the “Underground Railroad”—the system of safe houses and hiding places slaves used to escape bounty hunters, bloodhounds and federal marshals. In Canada, part of the British Empire, laws and court rulings had followed the famous Somerset decision of 1772 in which Lord Mansfield held that in England there “was too pure an air for slaves to breathe in.”
Even more consequentially, attempts to enforce the Fugitive Slave Act increasingly angered masses of people in the North, leading many to believe in the existence of a “Slave Power conspiracy” that was intent on expanding slavery throughout the union.
Like the Fugitive Slave Act, Trump’s executive orders target so-called “sanctuary cities,” where local authorities extend a modicum of social services to undocumented workers and their children, or turn a blind eye to their presence. Like their antebellum precursor, Trump’s orders dragoon local authorities into the apprehension of immigrants, threaten punishment to anyone who would assist immigrants, and deny the apprehended due process.
They have created a new Underground Railroad, with many immigrants attempting to traverse the US in the hope of finding sanctuary in Canada. And, like the Fugitive Slave Act, Trump’s orders have been met with angry protests across the US. The undocumented worker, as with the escaped slave 160 years ago, is the object of a growing sentiment of solidarity.
As striking as the parallels between the Fugitive Slave Act and Trump’s anti-immigrant orders may be, there is also a direct link overlooked by Foner and other commentators. Though separated by 167 years, both are outcomes of the Mexican-American War of 1846-1848.
The Fugitive Slave Act emerged directly out of that predatory war, which was provoked by the Democratic administration of James K. Polk as a means of tamping down the growing controversy over slavery beneath a wave of national patriotism—and adding vast new territories for slavery’s expansion. The stage for war was set by immigration—but at that time, by slaveholding Americans following the expansion of the cotton economy westward and into the province of Tejasin Mexico, where slavery had been illegal since 1829. The central aim of the Anglo-Texan plantation elite, in declaring independence from Mexico in 1836 and then conspiring to join the US, was to secure and expand slave-based cotton production.
Polk’s war looked to have been a smashing success. The American military routed its weaker Mexican rival, occupying Mexico City in September 1847. In the subsequent Treaty of Guadalupe Hidalgo, the United States took one-third of Mexico’s territory, forcing Mexican recognition of the annexation of Texas, New Mexico and part of Oklahoma, and ceding what are today the states of California, Arizona and Nevada, as well as parts of Colorado and Wyoming.
A great wave of flag-waving patriotism swept the country, as Democrats and Whigs set aside their differences to celebrate “military glory—that attractive rainbow that rises in showers of blood,” as the young congressman Abraham Lincoln, an opponent of the war, put it. Disgusted, Lincoln left politics and returned to his Illinois law practice.
The writer Henry David Thoreau was put in prison for refusing to pay taxes in protest against the war. “If the alternative is to keep all just men in prison, or give up war and slavery, the State will not hesitate which to choose,” Thoreau said.
But some observers understood the predatory war would solve nothing. “Mexico will poison us,” Thoreau’s friend Ralph Waldo Emerson presciently warned.
History teaches again and again that wars of aggression have outcomes their plotters fail to predict. Waged to preserve slavery indefinitely, the Mexican-American War instead set into motion a series of events that led in 15 years to its destruction. In the short term, the southern elite’s dream of expanding its slave empire to California was thwarted by the discovery of gold there in 1848, just one week before the signing of Guadalupe Hidalgo. California quickly drew tens of thousands of prospectors, small businessmen and incipient industrialists who demanded “free labor” in the Golden State. It entered the union as a free state in 1850.
Shocked at the loss of California—and the betrayal by northern Democrats led by David Wilmot of Pennsylvania, who had attempted, unsuccessfully, to block slavery from all territories taken from Mexico—the Southern elite demanded redress. This they were given with the Fugitive Slave Act, part of the Compromise of 1850, authored by Henry Clay (1777-1852). Bowing before accomplished fact, California, and with it the agricultural bonanza promised by its Mediterranean climate and fertile valleys, would be a free state. In exchange, the South was given an aggressive new Fugitive Slave Act along with “popular sovereignty”—the possibility that slavery could be established in any new territory based on the vote of the free white settler population.
None of this served to appease the South or to defuse the “irrepressible conflict.” Just the opposite. Popular sovereignty ultimately brought a dress rehearsal for war in the form of “Bleeding Kansas,” as the territory filled up with armed free-staters such as abolitionist John Brown (1800-1859), who faced off against the pro-slavery guerrilla bands organized in neighboring Missouri. As for the Fugitive Slave Act, it served only to radicalize Northern public opinion against “the Slave Power.”
Again and again, Northerners poured out into the streets to defend their neighbors and coworkers targeted for extradition to slavery. One example was the rescue of Joshua Glover in Milwaukee in 1854 by a crowd of some 5,000 people. In this way, the Fugitive Slave Act only hastened the Second American Revolution.
The other outcome of the Mexican-American War has been incubating in American history for a much longer time. The new border imposed through Guadalupe Hidalgo attempted to divide in two that which would prove, in the long run, impossible to keep separate: the economy and the people of the southwestern portion of North America.
The treaty left behind tens of thousands of Mexican citizens in the new American states. From the 1850s until the last several decades, Mexicans could, and did, move back and forth across the border with relative ease. Their migration was encouraged in the 1920s after the US effectively prohibited mass European immigration with the National Origins Act of 1924, which imposed no quota on Mexican immigrants.
Then, in the depths of the Great Depression, the Democratic Party administration of Franklin Delano Roosevelt targeted Mexicans for deportation and repatriation, including many who were US-born. This was reversed in World War II with the Bracero Program, which over the next 25 years brought several hundred thousand Mexicans to the US as low-paid and highly-exploited “guest-workers.”
The end of the Bracero Program in 1964, combined with the dispossession of the massive Mexican peasantry owing to the “Green Revolution” organized by US banks and agribusiness in collusion with the Mexican elite, fueled a large-scale labor migration. Driven from the land, their subsistence agriculture replaced by cash-crop agricultural export industries, the Mexican and Central American peasantry has been incorporated, in all but name, into the American working class.
Nowhere is the contradiction between nation-state and global economy more clear than on the US-Mexico border. California and Texas, the big prizes taken from Mexico in the 1840s, are today the two most populous American states. Were they independent, they would be the world’s sixth and 10th largest economies, respectively, each by itself larger than the Mexican economy with which they conduct several hundred billion dollars in trade.
Yet, according to a 2012 estimate, each state’s population is 38.2 percent “Hispanic”—a figure that is growing rapidly. From the border, the Mexican and Central American migrants have spread across the US, living and working side by side with US-born workers. Outside of Los Angeles, the largest Mexican-American population is found in Chicago, where some 700,000 reside.
This raises one other telling parallel between the Fugitive Slave Act and Trump’s orders. Both are desperate bids to defend a border against disruptive social and political changes—that is, to stop the progressive advance of history.
The Southern elite had learned that “in the relation between the two races,” as the pro-slavery politician John C. Calhoun phrased it, wherever slaves interacted with free workers, black or white, slavery was undermined. It was not accidental that Frederick Douglass learned to read and write and came to know of the North, freedom and abolitionism by living side-by-side as a rented slave with working class boys and men in Baltimore. As the late C. Vann Woodward noted, “[T]he encouragement that city conditions gave to interracial contact, familiar association and intimacy… corroded the master’s authority, diminished his control, and blurred the line between freedom and bondage.”
In the decades before the Civil War, the Democratic Party attempted to arrest these developments by establishing the first segregation laws in the South and in the North, imposing the Fugitive Slave Act, and whipping up racism by suggesting that freed slaves would take the jobs of workers, drive down their wages and rape white women—the very rhetoric aped by Trump and his fascist supporters today.
The failure of these politics, manifested in the election of Lincoln in 1860, required more desperately reactionary measures. Civil War historian James McPherson has described the Southern secession that year as a “preemptive counterrevolution.”
He writes that “rather than trying to restore the old order, a preemptive counterrevolution strikes first to protect the status quo before the revolutionary threat can materialize.” Yet the slaveocracy’s attempt to roll back the wheel of history, which can be traced back to the Fugitive Slave Act, resulted in its destruction. “Seldom in history has a counterrevolution provoked the very revolution it sought to preempt,” McPherson concludes.
Today, powerful historical forces—above all, the growing social power and political consciousness of the working class—threatens America’s decadent oligarchy, personified in Trump and his ultra-right personnel, who are quite conscious that time is working against them. Michael Anton, director of strategic communications for the US National Security Council, last year warned in his pseudonymously published Flight 93 Election that “the ceaseless importation of Third World foreigners with no tradition of, taste for, or experience in liberty means that the electorate grows more left, more Democratic, less Republican, less republican, and less traditionally American with every cycle.”
Trump’s anti-immigrant measures, like the Fugitive Slave Act, are an attempt to strike out against history and prevent a gathering revolutionary threat. They will prove no more successful.
A century after the Bolshevik Russian Revolution of 1917 spurred the United States to implement its Red Scare policies — where fears of communist espionage and overthrow propelled the country to build up anti-communist hysteria — the state of California at least may finally be rolling back some of those laws.
Lawmakers in the state assembly narrowly approved Monday repealing a law enacted during the second Red Scare of the 1940s and ’50s that banned communists from holding jobs in government. The bill must now pass through the Senate.
The Communist Party USA, founded in 1919, has an estimated membership of 5,000 nationwide.
The ruling corporate elites no longer seek to build. They seek to destroy. They are agents of death. They crave the unimpeded power to cannibalize the country and pollute and degrade the ecosystem to feed an insatiable lust for wealth, power and hedonism. Wars and military “virtues” are celebrated. Intelligence, empathy and the common good are banished. Culture is degraded to patriotic kitsch. Education is designed only to instill technical proficiency to serve the poisonous engine of corporate capitalism. Historical amnesia shuts us off from the past, the present and the future. Those branded as unproductive or redundant are discarded and left to struggle in poverty or locked away in cages. State repression is indiscriminate and brutal. And, presiding over the tawdry Grand Guignol is a deranged ringmaster tweeting absurdities from the White House.
The graveyard of world empires—Sumerian, Egyptian, Greek, Roman, Mayan, Khmer, Ottoman and Austro-Hungarian—followed the same trajectory of moral and physical collapse. Those who rule at the end of empire are psychopaths, imbeciles, narcissists and deviants, the equivalents of the depraved Roman emperors Caligula, Nero, Tiberius and Commodus. The ecosystem that sustains the empire is degraded and exhausted. Economic growth, concentrated in the hands of corrupt elites, is dependent on a crippling debt peonage imposed on the population. The bloated ruling class of oligarchs, priests, courtiers, mandarins, eunuchs, professional warriors, financial speculators and corporate managers sucks the marrow out of society.
The elites’ myopic response to the looming collapse of the natural world and the civilization is to make subservient populations work harder for less, squander capital in grandiose projects such as pyramids, palaces, border walls and fracking, and wage war. President Trump’s decision to increase military spending by $54 billion and take the needed funds out of the flesh of domestic programs typifies the behavior of terminally ill civilizations. When the Roman Empire fell, it was trying to sustain an army of half a million soldiers that had become a parasitic drain on state resources.
The complex bureaucratic mechanisms that are created by all civilizations ultimately doom them. The difference now, as Joseph Tainter points out in “The Collapse of Complex Societies,” is that “collapse, if and when it comes again, will this time be global. No longer can any individual nation collapse. World civilization will disintegrate as a whole.”
Civilizations in decline, despite the palpable signs of decay around them, remain fixated on restoring their “greatness.” Their illusions condemn them. They cannot see that the forces that gave rise to modern civilization, namely technology, industrial violence and fossil fuels, are the same forces that are extinguishing it. Their leaders are trained only to serve the system, slavishly worshipping the old gods long after these gods begin to demand millions of sacrificial victims.
“Hope drives us to invent new fixes for old messes, which in turn create even more dangerous messes,” Ronald Wright writes in “A Short History of Progress.” “Hope elects the politician with the biggest empty promise; and as any stockbroker or lottery seller knows, most of us will take a slim hope over prudent and predictable frugality. Hope, like greed, fuels the engine of capitalism.”
The Trump appointees—Steve Bannon, Jeff Sessions, Rex Tillerson, Steve Mnuchin, Betsy DeVos, Wilbur Ross, Rick Perry, Alex Acosta and others—do not advocate innovation or reform. They are Pavlovian dogs that salivate before piles of money. They are hard-wired to steal from the poor and loot federal budgets. Their single-minded obsession with personal enrichment drives them to dismantle any institution or abolish any law or regulation that gets in the way of their greed. Capitalism, Karl Marx wrote, is “a machine for demolishing limits.” There is no internal sense of proportion or scale. Once all external impediments are lifted, global capitalism ruthlessly commodifies human beings and the natural world to extract profit until exhaustion or collapse. And when the last moments of a civilization arrive, the degenerate edifices of power appear to crumble overnight.
Sigmund Freud wrote that societies, along with individuals, are driven by two primary instincts. One is the instinct for life, Eros, the quest to love, nurture, protect and preserve. The second is the death instinct. The death instinct, called Thanatos by post-Freudians, is driven by fear, hatred and violence. It seeks the dissolution of all living things, including our own beings. One of these two forces, Freud wrote, is always ascendant. Societies in decline enthusiastically embrace the death instinct, as Freud observed in “Civilization and Its Discontents,” written on the eve of the rise of European fascism and World War II.
“It is in sadism, where the death instinct twists the erotic aim in its own sense and yet at the same time fully satisfies the erotic urge, that we succeed in obtaining the clearest insight into its nature and its relation to Eros,” Freud wrote. “But even where it emerges without any sexual purpose, in the blindest fury of destructiveness, we cannot fail to recognize that the satisfaction of the instinct is accompanied by an extraordinary high degree of narcissistic enjoyment, owing to its presenting the ego with a fulfillment of the latter’s old wishes for omnipotence.”
The lust for death, as Freud understood, is not, at first, morbid. It is exciting and seductive. I saw this in the wars I covered. A god-like power and adrenaline-driven fury, even euphoria, sweep over armed units and ethnic or religious groups given the license to destroy anything and anyone around them. Ernst Juenger captured this “monstrous desire for annihilation” in his World War I memoir, “Storm of Steel.”
A population alienated and beset by despair and hopelessness finds empowerment and pleasure in an orgy of annihilation that soon morphs into self-annihilation. It has no interest in nurturing a world that has betrayed it and thwarted its dreams. It seeks to eradicate this world and replace it with a mythical landscape. It turns against institutions, as well as ethnic and religious groups, that are scapegoated for its misery. It plunders diminishing natural resources with abandon. It is seduced by the fantastic promises of demagogues and the magical solutions characteristic of the Christian right or what anthropologists call “crisis cults.”
Norman Cohn, in “The Pursuit of the Millennium: Revolutionary Messianism in Medieval and Reformation Europe and Its Bearing on Modern Totalitarian Movements,” draws a link between that turbulent period and our own. Millennial movements are a peculiar, collective psychological response to profound societal despair. They recur throughout human history. We are not immune.
“These movements have varied in tone from the most violent aggressiveness to the mildest pacifism and in aim from the most ethereal spirituality to the most earth-bound materialism; there is no counting the possible ways of imagining the Millennium and the route to it,” Cohen wrote. “But similarities can present themselves as well as differences; and the more carefully one compares the outbreaks of militant social chiliasm during the later Middle Ages with modern totalitarian movements the more remarkable the similarities appear. The old symbols and the old slogans have indeed disappeared, to be replaced by new ones; but the structure of the basic phantasies seems to have changed scarcely at all.”
These movements, Cohen wrote, offered “a coherent social myth which was capable of taking entire possession of those who believed in it. It explained their suffering, it promised them recompense, it held their anxieties at bay, it gave them an illusion of security—even while it drove them, held together by a common enthusiasm, on a quest which was always vain and often suicidal.
“So it came about that multitudes of people acted out with fierce energy a shared phantasy which though delusional yet brought them such intense emotional relief that they could live only through it and were perfectly willing to die for it. It is a phenomenon which was to recur many times between the eleventh century and the sixteenth century, now in one area, now in another, and which, despite the obvious differences in cultural context and in scale, is not irrelevant to the growth of totalitarian movements, with their messianic leaders, their millennial mirages and their demon-scapegoats, in the present century.”
The severance of a society from reality, as ours has been severed from collective recognition of the severity of climate change and the fatal consequences of empire and deindustrialization, leaves it without the intellectual and institutional mechanisms to confront its impending mortality. It exists in a state of self-induced hypnosis and self-delusion. It seeks momentary euphoria and meaning in tawdry entertainment and acts of violence and destruction, including against people who are demonized and blamed for society’s demise. It hastens its self-immolation while holding up the supposed inevitability of a glorious national resurgence. Idiots and charlatans, the handmaidens of death, lure us into the abyss.
Systems of governance that are seized by a tiny cabal become mafia states. The early years—Ronald Reagan and Bill Clinton in the United States—are marked by promises that the pillage will benefit everyone. The later years—George W. Bush and Barack Obama—are marked by declarations that things are getting better even though they are getting worse. The final years—Donald Trump—see the lunatic trolls, hedge fund parasites, con artists, conspiracy theorists and criminals drop all pretense and carry out an orgy of looting and corruption.
The rich never have enough. The more they get, the more they want. It is a disease. CEOs demand and receive pay that is 200 times what their workers earn. And even when corporate executives commit massive fraud, such as the billing of hundreds of thousands of Wells Fargo customers for accounts they never opened, they elude punishment and personally profit. Disgraced CEO John Stumpf left Wells Fargo with a pay package that averages nearly $15 million a year. Richard Fuld received nearly half a billion dollars from 1993 to 2007, a time in which he was bankrupting Lehman Brothers.
The list of financial titans, including Trump, who have profited from a rigged financial system and fraud is endless. Many in the 1 percent make money by using lobbyists and bought politicians to write self-serving laws and rules and by forming unassailable monopolies. They push up prices on products or services these monopolies provide. Or they lend money to the 99 percent and charge exorbitant interest. Or they use their control of government and the courts to ship jobs to Mexico or China, where wages can be as low as 22 cents an hour, and leave American workers destitute. Neoliberalism is state-sponsored extortion. It is a vast, nationally orchestrated Ponzi scheme.
This fevered speculation and mounting inequality, made possible by the two ruling political parties, corroded and destroyed the mechanisms and institutions that permitted democratic participation and provided some protection for workers. Politicians, from Reagan on, were handsomely rewarded by their funders for delivering their credulous supporters to the corporate guillotine. The corporate coup created a mafia capitalism. This mafia capitalism, as economists such as Karl Polanyi and Joseph Stiglitz warned, gave birth to a mafia political system. Financial and political power in the hands of institutions such as Goldman Sachs and the Clinton Foundation becomes solely about personal gain. The Obamas in a few weeks will begin to give us a transparent lesson into how service to the corporate state translates into personal enrichment.
Adam Smith wrote that profits are often highest in nations on the verge of economic collapse. These profits are obtained, he wrote, by massively indebting the economy. A rentier class, composed of managers at hedge funds, banks, financial firms and other companies, makes money not by manufacturing products but from the control of economic rents. To increase profits, lenders, credit card companies and others charge higher and higher interest rates. Or they use their monopolies to gouge the public. The pharmaceutical company Mylan, in a classic example, raised the price of an epinephrine auto-injector used to treat allergy reactions from $57 in 2007 to about $500.
These profits are counted as economic growth. But this is a fiction, a sleight of hand, like unemployment statistics or the consumer price index, used to mask the speculative shell game.
“The head of Goldman Sachs came out and said that Goldman Sachs workers are the most productive in the world,” the economist Michael Hudson told me. “That’s why they’re paid what they are. The concept of productivity in America is income divided by labor. So if you’re Goldman Sachs and you pay yourself $20 million a year in salary and bonuses, you’re considered to have added $20 million to GDP, and that’s enormously productive.”
“We’re talking with tautology,” said Hudson, the author of “Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy.” “We’re talking with circular reasoning here. So the issue is whether Goldman Sachs, Wall Street and predatory pharmaceutical firms actually add product or whether they’re just exploiting other people. That’s why I used the word ‘parasites’ in my book’s title. People think of a parasite as simply taking money, taking blood out of a host or taking money out of the economy. But in nature it’s much more complicated. The parasite can’t simply come in and take something. First of all, it needs to numb the host. It has an enzyme so that the host doesn’t realize the parasite’s there. And then the parasites have another enzyme that takes over the host’s brain. It makes the host imagine that the parasite is part of its own body, actually part of itself and hence to be protected. That’s basically what Wall Street has done. It depicts itself as part of the economy. Not as a wrapping around it, not as external to it, but actually the part that’s helping the body grow, and that actually is responsible for most of the growth. But in fact it’s the parasite that is taking over the growth.”
“The result is an inversion of classical economics,” Hudson said. “It turns Adam Smith upside down. It says what the classical economists said was unproductive parasitism actually is the real economy. And that the parasites are labor and industry that get in the way of what the parasite wants, which is to reproduce itself, not help the host, that is, labor and capital.”
The established elites dislike Trump because he is gauche, vulgar and boorish. He is not part of the refined group of mandarins trained to become plutocrats in Ivy League universities and business schools. He never mastered the cloying patina of refinement and carefully calibrated rhetoric of our courtier class.
Trump and his coterie of half-wits, criminals, racists and deviants play the role of the Snopes clan in William Faulkner’s novels “The Hamlet,” “The Town” and “The Mansion.” The Snopeses rose up out of the power vacuum of the decayed South and ruthlessly seized control from the degenerated aristocratic elites. Flem Snopes and his extended family—which includes a killer, a pedophile, a bigamist, an arsonist, a mentally disabled man who copulates with a cow, and a relative who sells tickets to witness the bestiality—are fictional representations of the scum we have elevated to the highest level of the federal government. They embody the ethos of modern capitalism Faulkner warned us against.
“The usual reference to ‘amorality,’ while accurate, is not sufficiently distinctive and by itself does not allow us to place them, as they should be placed, in a historical moment,” the critic Irving Howe wrote of the Snopeses. “Perhaps the most important thing to be said is that they are what comes afterwards: the creatures that emerge from the devastation, with the slime still upon their lips.”
“Let a world collapse, in the South or Russia, and there appear figures of coarse ambition driving their way up from beneath the social bottom, men to whom moral claims are not so much absurd as incomprehensible, sons of bushwhackers or muzhiks drifting in from nowhere and taking over through the sheer outrageousness of their monolithic force,” Howe wrote. “They become presidents of local banks and chairmen of party regional committees, and later, a trifle slicked up, they muscle their way into Congress or the Politburo. Scavengers without inhibition, they need not believe in the crumbling official code of their society; they need only learn to mimic its sounds.”
The Snopes-like mentality of our president-elect is portrayed in a documentary movie, “The Queen of Versailles,” about another sleazy developer. The film, by Lauren Greenfield, chronicles the tawdry and insatiable greed of David Siegel and his ditzy trophy wife, Jackie, who is three decades younger, and their quest to build one of the largest private residences in the United States, a 90,000-square-foot mansion modeled after Versailles. Siegel and his wife, who once dated Trump, are fervent Trump supporters. Siegel, like Trump, is a barely literate philistine. He, like the president-elect, sponsored beauty pageants, was accused of sexual assault, made his money through high-pressure sales tactics and had access to hundreds of millions in bank loans. And he, like Trump, uses bankruptcy or the threat of bankruptcy to protect his wealth. And like our next president he has a volatile and vicious temper.
“The great Roman historians Livy and Plutarch blamed the decline of the Roman Empire on the creditor class being predatory, and the latifundia,” Hudson said. “The creditors took all the money, and would just buy more and more land, displacing the other people. The result in Rome was a dark age, and that can last a very long time. The dark age is what happens when the rentiers take over.”
“If you look back in the 1930s, Leon Trotsky said that fascism was the inability of the socialist parties to come forth with an alternative,” Hudson said. “If the socialist parties and media don’t come forth with an alternative to this neofeudalism, you’re going to have a rollback to feudalism. But instead of the military taking over the land, as occurred with the Norman Conquest, you take over the land financially. Finance has become the new mode of warfare.”
“You can achieve the takeover of land and the takeover of companies by corporate raids,” he said. “The Wall Street vocabulary is one of conquest and wiping out. You’re having a replay in the financial sphere of what feudalism was in the military sphere.”
What comes next, history has shown, will not be pleasant. A cruel and morally bankrupt elite, backed by the organs of state security and law enforcement, will, as the Eupatridae did in sixth-century-B.C. Athens, bankrupt the citizenry through state-sponsored theft, war, austerity and debt peonage. They will reduce workers to the status of serfs or slaves. The most benign dissent will be criminalized and crushed. America’s Snopes-like elites have no external or internal constraints. They are barbarians. We will remove them from power or enter a new dark age.
After his election in 1968, President Richard Nixon asked Robert Morgenthau, the US Attorney for the Southern District of New York, to resign. Morgenthau refused to leave voluntarily, saying it degraded the office to treat it as a patronage position.
Nixon’s move precipitated a political crisis. The president named a replacement. Powerful politicians lined up to support Morgenthau. Morgenthau had taken on mobsters and power brokers. He had repeatedly prosecuted Roy Cohn, the sleazy New York lawyer who had been Senator Joe McCarthy’s right-hand man. (One of Cohn’s clients and protégés was a young New York City real estate developer named Donald Trump.) When Cohn complained that Morgenthau had a vendetta against him, Morgenthau replied, “A man is not immune from prosecution merely because a United States Attorney happens not to like him.”
Morgenthau carried that confrontational attitude to the world of business. He pioneered the Southern District’s approach to corporate crime. When his prosecutors took on corporate fraud, they did not reach settlements that called for fines, the current fashion these days. They filed criminal charges against the executives responsible.
Before Morgenthau, the Department of Justice focused on two-bit corporate misdeeds—Ponzi schemes and boiler room operations. Morgenthau changed that. His prosecutors went after CEOs and their enablers—the accountants and lawyers who abetted the frauds or looked the other way. “How do you justify prosecuting a nineteen-year old who sells drugs on a street corner when you say it’s too complicated to go after the people who move the money?” he once asked.
Morgenthau’s years as United States Attorney were followed by political success. He was elected New York County District Attorney in 1974, the first of seven consecutive terms for that office.
There are parallels between Morgenthau, and Preet Bharara, the U.S. attorney for the Southern District who was fired by President Trump this weekend.
Like Morgenthau, the 48-year old Bharara leaves the office of US Attorney for the Southern District celebrated for taking on corrupt and powerful politicians. Bharara prosecuted two of the infamous “three men in a room” who ran New York state: Sheldon Silver, the Democratic speaker of the assembly and Dean Skelos, the Republican Senate majority leader.
He won convictions of a startling array of local politicians, carrying on the work of the Moreland Commission, an ethics inquiry created and then dismissed by New York’s Gov. Andrew Cuomo. (This weekend, Bharara cryptically tweeted that “I know what the Moreland Commission must have felt like,” a suggestion that he was fired as he was pursuing cases pointed at Trump or his allies.)
But the record shows that Bharara was much less aggressive when it came to confronting Wall Street’s misdeeds.
President Obama appointed Bharara in 2009, amid the wreckage of the worst financial crisis since the Great Depression. He inherited ongoing investigations into the collapse, including a probe against Lehman Brothers.
He also inherited something he and his young charges found more alluring: insider-trading cases against hedge fund managers. His office focused obsessively on those. At one point, the Southern District racked up a record of 85-0 in those cases. (Appeals courts would later throw out two prominent convictions, infuriating him and dealing blows to several other cases.)
Hedge funds are safer targets. The firms aren’t enmeshed in the global financial markets in the way that giant banks are. Insider trading cases are relatively easy to win and don’t address systemic abuses that helped bring down the financial system.
Even there his record was more mixed than is popularly understood. As Sheelah Kolhatkar demonstrates in her propulsive and riveting “Black Edge,” when it came to bringing his biggest whale to justice, Steve Cohen of SAC Capital, the Southern District blinked. They did not charge him, only securing a guilty plea from his firm.
Present and former prosecutors say Bharara did not give much emphasis to investigations arising from the financial meltdown, an approach shared by his boss, Attorney General Eric Holder. Justice Department insiders say many of those inquiries withered not because they were unpromising, but because they had little support.
Bharara missed an opportunity by not bringing any significant criminal charges against individuals in the wake of the collapses of Lehman, investment bank Merrill Lynch, the insurer AIG, the mortgage securities and collateralized debt obligation businesses, or the myriad public misrepresentations from bank CEOs about their finances.
Bharara and senior officials in Washington argue that there were no criminal cases to file after the 2008 crisis. But the U.S. attorney’s office in Manhattan did pursue significant civil cases against the banks for their mortgage activities, cases that had to prove misconduct by the “preponderance of the evidence.” And DOJ did win guilty pleas from the banks themselves, an indication that prosecutors might have been able to charge individuals for their part in crimes their institutions had acknowledged. Academics who studied those years, including Columbia’s Tomasz Piskorski and James Witkin and Chicago’s Amit Seru found widespread patterns of fraud in the mortgage business.
The exception makes this failure all the more puzzling. As I detailed in 2014, Bharara’s office brought one case for misconduct during the financial crisis — against a mid-level banker. Prosecutors charged Kareem Serageldin of Credit Suisse with overseeing traders who knowingly misrepresented the value of mortgage securities. Serageldin pleaded guilty and went to prison.
Serageldin’s colleagues in the industry and others familiar with Credit Suisse found it hard to believe that he was the only person involved in that particular fraud.
Bharara’s reluctance to pursue senior executives was seen in other investigations of big banks. His office wrested a $1.7 billion fine from JPMorgan Chase over its complicity in the Bernie Madoff Ponzi scheme, but it brought no charges against individual bankers.
One odd aspect of his tenure was the Southern District’s willingness to defer to other jurisdictions when it came to Wall Street cases.
Historically, the SDNY has been the leading enforcers of securities laws, nicknamed the “sovereign district” for its propensity to grab corporate fraud cases from elsewhere on the flimsiest of jurisdictional pretexts. Under Bharara, the southern district let other U.S. attorneys claim investigations into residential mortgage-backed securities, the instruments at the heart of the financial crisis. Those other offices were not nearly as versed in complex financial cases as their colleagues in Manhattan. In addition, Bharara’s office ceded post-financial crisis investigations into foreign exchange and global interest rate manipulation to prosecutors working from the Justice Department’s headquarters.
Like Morgenthau, Bharara was a prominent figure in the New York landscape, given to well-orchestrated press conferences and memorable sound bites. Like Morgenthau, he did not leave office quietly, even thought the president has a longstanding right to name his own U.S. attorneys. And like Morgenthau, he may try to parlay his martyrdom into elective office.
But if he runs on his record of convictions, as prosecutors often do, voters might want to consider as well the list of possible targets he never pursued.
in Charlottesville, Virginia, dozens of torch-bearing white nationalists gathered Saturday for two rallies to protest plans to remove a Confederate monument. White nationalist Richard Spencer led the protesters, who chanted “We will not be replaced.” While the torch-bearing mob evoked the long, bloody history of white terrorism against African Americans.