Get a copy of The Crash of 2016 directly from Truthout with a minimum contribution of $35. Just click here now. This is Thom Hartmann’s prescient book about why the economic crash of 2008 is likely to occur again sometime in the next few years.
Thom Hartmann, of course, appears on Truthout at least five days a week, and is also seen regularly in videos of his television program, “The Big Picture,” on BuzzFlash at Truthout.
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He talked with Truthout about his latest book The Crash of 2016, a discussion that included Hartmann’s wide-ranging counterpoints to a corporate media of conventional wisdom, including the notion that many US CEOs are sociopaths.
The following is an excerpt from that extended interview:
MARK KARLIN: You use the term economic royalists often in the book to define the oligarchy in the US. How would you define the term?
THOM HARTMANN: The economic royalists are the people who have enough wealth and income that they have the ability to influence public policy in a very significant and meaningful way. The way that I use to define those people in the book is the multimillionaire and billionaire classes who are using their wealth to advance their own interests politically, but sometimes just as an economic weapon to suck up money from the rest of the population.
KARLIN: You have a section about FDR attacking the economic royalists and said that he declared at the 1936 Democratic convention that he welcomed their hate. He was born of the wealthiest class in America, but became an advocate of the working person. Why was he perceived as such a golden age of defiance against the robber barons?
HARTMANN: Because of the damage that the economic royalists had done. He had a populace that was in pain when he was elected in 1932. He had a Congress in which both houses were Democratic.
FDR was a rich kid who grew up to become the Democratic governor of New York. When he first ran for president, he ran on a platform of very modest, incremental change amidst the Depression. But the times, in many ways, made the man. Sure, you have to have the potential in an individual such as FDR in the first place.
If the crash had happened two years earlier in the Bush administration, Obama would have the mandate [wind at this back] that FDR had, but it didn’t happen that way.
KARLIN: Of course you cover in The Crash of 2016 the infamous Powell Memo. Why is the Powell Memo so significant in America’s turn to the right and especially in political catering to the corporatists?
HARTMANN: Lewis Powell was an attorney who at the time of the LBJ administration was practicing in Virginia and represented large corporations and wealthy individuals. When he wrote the memo in 1971, the conservatives were in an existential crisis.
There was a book written in the ’50s that basically asserted that democracy couldn’t be trusted to the middle class or to those who were not wealthy, that this would lead to chaos. Social change would happen so rapidly that it would not be good for the nation or especially those who financially steered the economy.
So by 1970, you had great social ferment: against the war, feminism (including the emergence of the pill), civil rights, marijuana use, the emergence of the hippies, the large-scale emergence of alternative religious beliefs, the beginning of the gay-rights movement. Virtually every sector of society except old rich white guys was in open revolt. On top of that, to make it really frightening for the conservatives whose highest priority is the financial consolidation of wealth, Rachel Carson wrote the book that began the environmental movement – and Ralph Nader ignited the consumer movement.
At the time Powell wrote that memo, he opens with words to the effect that “we are under siege” from the point of view of conservatives who believe that their country was coming apart at the seams – and they had to do something dramatic to reverse the course of the nation. Powell laid out a strategy for the conservatives in the memo: Dial back the power of the middle class; dial back the financial stability of the middle class, and restore the role of the wealthy at the center of power to regulate society – and prevent the country from lurching in other directions.
He pointed out that in ’71 that most corporations were apolitical. He said that “we’ve got to get political and take control of the institutions in our society.” He advised taking control of higher education; of the workplace by weakening the unions; of the court system; of influencing the public opinion and the media – and, of course, taking control of the government.
Powell was keen on think tanks and associations that would advance a corporate agenda, and groups like the Heritage Foundation and the Federalist Society owe their origins to Powell’s 1971 memo – including the CATO Foundation and what the Koch brothers are up to now. Just a short time after he wrote the memo, Richard Nixon put him on the Supreme Court, where he was in a position to implement parts of his memo. This included particularly legally empowering the corporate world and the wealthy.
KARLIN: You have a section on Roger Ailes as head of the GOP network (FOX). How significant do you think TV has been in getting America’s white working – and what remains of the middle – class to blame the nation’s woes on less fortunate non-whites, in many cases as poor as them?
HARTMANN: It’s been absolutely consequential. FOX News was started by a billionaire who, in the beginning, lost 100 million dollars a year for the first five years in order to get the network up [it is now extremely profitable].
Republicans have really struggled since FDR to reverse the New Deal.
In 1968, LBJ had negotiated peace between North and South Vietnam. The Nixon campaign got a hold of the information that an end to the Vietnam War was at hand through the peace talks being held in Paris. A telephone transcript released of a conversation between President Johnson and Republican Senator Everett Dirksen indicates that Johnson knew that the Nixon campaign was [as they succeeded at doing] undermining the tentative peace agreement.
Johnson told Dirksen that what Nixon’s campaign was doing in trying to sabotage peace in order to win the ’68 election against [Hubert] Humphrey was treason, and Dirksen, a senior Republican, agreed. In effect, Johnson was pleading with leading Republicans to get the Nixon operatives to allow a peace agreement. But Nixon refused to back off and won the ’68 election [but thousands upon thousands of US soldiers and Vietnamese died over the next few years, as well as an escalation of the war into Cambodia – and the resultant Khmer Rouge massacres – due to a GOP willingness to sacrifice lives to win an election].
Reagan’s campaign was long-rumored to have undercut an agreement to free hostages toward the end of the Carter administration because it would likely mean Carter’s re-election. The Reagan campaign [allegedly through a fall 1980 meeting with revolutionary Iranian government officials and Reagan campaign honcho William Casey] promised Iran a better deal than they said Carter would give them, as well as spare military parts. At the time Carter was near an agreement for the return of the US hostages, 80% of Iran was polled and supported their release. But the Reagan campaign, like Nixon’s, prevailed against US interests. In short, the Reagan administration likely assumed power also as a result of treason.
And then you have George W. Bush, whose brother was governor of Florida when Al Gore appeared to have more actual votes [although uncounted] than Bush. On top of that, Jeb Bush, through Katherine Harris, got about 80,000 African-American voters stricken from the polls through a caging strategy that struck felons and non-felons with similar names from the voting rolls. And that put Bush within range of officially counted votes for the Supreme Court to steal the election for Bush.
There has not been a Republican legitimately elected president since Dwight Eisenhower. In the House of Representatives, the Democrats got a million and a half more votes than the Republicans. The only reason that the Republicans are holding the House is because of redistricting, because of gerrymandering.
When your political agenda is to screw working people and the poor and reward rich people at all costs, you are not going to win elections. So they have to build coalitions with people who are anti-something, because if they ran on economics they would always lose. So organizations like ALEC have put their thumb on the scale and tipped things hugely in the direction of the GOP. It’s been just enough to get Republicans in power in many areas of elective government.
The media is tilted right and has created the modern infrastructure for the Republican Party. In most of the country, you can’t even get progressive radio anymore. So when Roger Ailes first sat down with Richard Nixon and said, let’s create this GOP TV thing, Nixon didn’t have the money. When Ailes found someone who could support his idea in Rupert Murdoch, it changed the course of our country.
KARLIN: What was the top marginal tax rate under the Eisenhower administration?
HARTMANN: It was 91 percent.
KARLIN: What do you have to say in the chapter curiously titled “Reagan Kidnapped the Jetsons”?
HARTMANN: From the time of George Washington to the beginning of the Reagan administration, as productivity increased so did wages. Reagan disentangled that correlation through a variety of strategies. As a result, for the last 32 years wages have been flat as productivity has continued to increase. If wages right now tracked productivity, the average wage right now would be around $22 an hour. The “Jetsons” portrayed a day when workers had abundant leisure time due to increased productivity and wages. But, instead, we’ve been living in an austerity economy where any additional wealth that is produced by working people does not go to them, it goes to the rich.
KARLIN: In a chapter called “Madness,” you have two sections: global psychopaths and bankster psychopaths? How literally do you mean those terms?
HARTMANN: I mean them absolutely literally. There is evidence that many people who run top corporations and key parts of our economy are quite literally sociopaths. Sociopaths are people who are unable to empathize with others; everyone else is sort of an object for their pleasure. Because they don’t feel empathy, they can do things that other people couldn’t morally do. They believe themselves above society’s rules.
Here’s a simple test: Ask yourselves what makes a person worth a million dollars a day, a week or months for their services? If there are a lot of people with the skills to be CEOs around, the competition for the top positions should create a competitive environment that would lower salaries. So what’s happened to drive the salaries up so high?
Since Reagan, CEOs became almost solely responsible to their stockholders and their board of directors, not to their employees and their communities. When Reagan came along, he incentivized a change by changing the tax code to pay CEOs bonuses with stock options. As stockholders, one of the things the CEOs would do is everything they could to drive up the stock price since they would benefit. This changed the way we do corporate business: “Let’s do everything we can to squeeze dividends and higher stock prices out of the company.”
Now, the long-term capital gains on the stock holdings have a tax of just 15 percent. The Reagan change ensured that corporate CEOs would be less concerned about the environment, employees, etc. What kind of person can do that and be compensated so lavishly?
Sociopaths are a very small slice of our society, about one or two percent. And among that group, those who make their way through the top business schools is relatively a very small number of people. That’s why sociopath CEOs can demand such a high level of pay and stock bonuses.