Requiem for the American Dream Page #2

for our own black people

and for our own poor people.

Concern for other people,

One day we must ask

the question,

"why are there 40 million

poor people in America?"

When you begin

to ask that question,

you're raising a question

about the economic system,

about a broader

distribution of wealth,

the question of restructuring

the whole of American society.

These are all

civilizing effects...

And that caused great fear.

I hadn't anticipated

the power...

I should've, but I didn't

anticipate the power

of the reaction

to these civilizing effects of the '60s.

I did not anticipate the strength of

the reaction to it.

The backlash.

There has been an enormous

concentrated, coordinated...

Business offensive

beginning in the '70s

to try to beat back

the egalitarian efforts

that went right

through the Nixon years.

You see it in many respects,over on the right,

you see it in things like the famous Powell

Memorandum... (Associate Justice of the SC)

Sent to the chamber of commerce,

the major business lobby,

by later Supreme Court

justice Powell...

Warning them that business

is losing control over the society...

And something has to be done

to counter these forces.

Of course, he puts it

in terms of defense,

"defending ourselves

against an outside power."

But if you look at it,

it's a call for business to use

its control over resources

to carry out a major offensive

to beat back this democratizing

wave.

Over on the liberal side,

there's something exactly

similar.

The first major report of The Trilateral Commission

(is a non-governmental group founded

by David Rockefeller in July 1973)

is concerned with this.

It's called "the crisis of democracy."

Trilateral Commission

is liberal internationalists...

Their flavor is indicated

by the fact that

they pretty much staffed

the Carter administration.

They were also appalled by

the democratizing tendencies

of the '60s,

and thought

we have to react to it.

They were concerned that

there was an "excess of

democracy" developing.

Previously passive and obedient

parts of the population,

what are sometimes called,

"the special interests,"

were beginning to organize

and try to enter the political

arena,

and they said, "that imposes

too much pressure on the state.

It can't deal with all

these pressures."

So, therefore, they have

to return to passivity

and become depoliticized.

They were particularly concerned

with what was happening

to young people.

"The young people are getting

too free and independent."

None of us will

beget any violence.

If there's any violence,

it will be because of the police.

The way they

put it, there's failure on

the part of the schools,

the universities,

the churches...

The institutions responsible

for the "indoctrination

of the young."

Their phrase, not mine.

If you look at their study, there's one interest

they never mention... Privat business.

And that makes sense, they're

not special interest, they're

the national interest,

kind of by definition.

So they're okay.

They're allowed to, you know,

have lobbyists, buy campaigns,

staff the executive,

make decisions, that's fine.

But it's the rest, the special interests,

the general population,

who have to be subdued.

Well, that's the spectrum.

It's the kind of ideological

level of the backlash.

But the major backlash,

which was in parallel to this...

Was just redesigning

the economy.

Since the 1970s, there's been

a concerted effort on the part

of the masters of mankind,

the owners of the society,

to shift the economy

in two crucial respects.

One, to increase the role

of financial institutions,

banks, investment firms,

so on...

Insurance companies.

By 2007, right before

the latest crash,

they had literally 40%

of corporate profits...

Far beyond anything in the past.

Back in the 1950s,

as for many years before,

the United States economy

was based largely on production.

The United States was

the great manufacturing

center of the world.

Financial institutions used

to be a relatively small part

of the economy

and their task was

to distribute unused assets like,

say, bank savings

to productive activity.

The bank always has

on hand a reserve of money

received from

the stockholders

and depositors.

On the basis of

these cash reserves,

a bank can create credit.

So besides providing a safe

place for depositing money,

a bank serves a community

by making additional credit

available for many purposes.

For a manufacturer to meet

his payroll during slack selling periods,

for a merchant to enlarge

and remodel his store,

and for many other good reasons

why people are always needing

more credit

than they have

immediately available.

That's a contribution

to the economy.

Regulatory system

was established.

Banks were regulated.

The commercial and investment

banks were separated,

cut back their risky investment

practices that could harm private people.

There had been, remember, no financial

crashes during the period of regulation.

By the 1970s, that changed.

You started getting that huge

increase in the flows of speculative capital,

just astronomically increase,

enormous changes

in the financial sector

from traditional banks to risky investments,

complex financial instruments,

money manipulations and so on.

Increasingly, the business

of the country isn't production,

at least not here.

The primary business

here is business.

You can even see it

in the choice of directors.

So, a director of a major

American corporation

back in the '50s and '60s

was very likely to be an engineer, somebody who

graduated from a place like MIT,

(Massachusetts Institute of Technology

maybe industrial management.

More recently, the directorship

and the top managerial positions

are people who came out

of business schools,

learned the financial trickery

of various kinds, and so on.

By the 1970s, say General Electric

could make more profit

playing games with money

than you could by producing

in the United States.

You have to remember

that General Electric

is substantially

a financial institution today.

It makes half its profits just

by moving money around

in complicated ways.

And it's very unclear that

they're doing anything that's

of value to the economy.

So that's one phenomenon,

what's called financialization

of the economy.

Going along with that

is the off-shoring of production.

The trade system

was reconstructed

with a very explicit

design of putting

working people

in competition with one

another all over the world.

And what it's lead to

is a reduction in the share of income

on the part of working people.

It's been particularly striking

in the United States,

but it's happening worldwide.

It means that an American

worker's in competition

with the super-exploited

worker in China.

Meanwhile, highly paid

professionals are protected.

They're not placed

in competition with the rest

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