STAFF NEWS & ANALYSIS
Lloyd Blankfein: Let's All Compromise to Support the Status Quo
By Staff News & Analysis - November 15, 2012

Lloyd Blankfein: The Business Plan for American Revival … There is a huge amount of investible cash that is now sitting on the sidelines, waiting for sensible reforms … Relations between the Obama administration and large segments of the business community have been strained and unproductive. But the election offers an important opportunity to forge a more productive relationship. By electing a divided government, Americans didn't choose two years of squabbling and inaction until the next election—and the country cannot afford that. Both parties will have to compromise to make progress. – Wall Street Journal

Dominant Social Theme: Let's get the US moving again.

Free-Market Analysis: Here comes Lloyd Blankfein to try to make amends for his ridiculous statement not so long ago that bankers "do God's work." He's head of Goldman Sachs, perhaps the most powerful mercantilist banking firm in the world.

The operative term is "mercantilist." Goldman Sachs is no more a Wall Street firm than GM is a private car manufacturer. Goldman is an operative force of what we call Money Power and is by design so intermingled with the government it is hard to tell where the company leaves off and US fedgov begins.

A larger Money Power (one situated ABOVE Goldman Sachs) retains its status and power by manipulating government. The process is called mercantilism. The goal, apparently, is world government. The operative procedures are what we call dominant social themes, or memes.

The dominant social theme in this case has to do with the idea that business leaders need to compromise to "keep America great." The idea is that the country has problems but men of good faith can fix them.

The subdominant social theme is simply the unstated assumption that the status quo is worth continuing. The system needs to be tweaked, in other words, not reconfigured in any radical sense. Here's some more from the article:

Four years ago, it was said that the incoming Obama administration aspired to the dynamic that existed in Abraham Lincoln's cabinet, where former competitors and antagonists came together to help the country through the Civil War. If Doris Kearns Goodwin's "Team of Rivals" was the historical aspiration then, the model to emulate after this election is her earlier book, "No Ordinary Time," about Franklin Roosevelt's domestic policies during the latter years of the Great Depression and into World War II.

The 1930s were a period of extreme bitterness between the business community and the Roosevelt administration. Many executives deplored the president's policies and refused to even utter his name, referring to him as "that man in the White House." In turn, the president famously declared during the 1936 re-election campaign: "I welcome their hatred."

Yet, well before the bombing of Pearl Harbor, these adversaries made common cause to defeat Germany and Japan. The result was an unprecedented surge in industrial production that would crush the Axis powers and lift the American economy out of the Great Depression. Roosevelt showed leadership, and business answered the call.

The challenges that America faces are not those of World War II. But meeting today's challenges will demand a similar dedication to cooperation—and not just between political parties. A spirit of compromise and reconciliation would do wonders for the economy if government and business resolved together to address [appropriate] priorities …

Blankfein then lists what needs to be done via bullet points. He urges that leaders come together to remove the risk of a "double dip" recession by taking proactive legislative steps to unlock "more than a trillion dollars of cash that is sitting on the balance sheets of U.S. nonfinancial companies."

Blankfein claims that unless there is "certainty about tax rates," companies won't spend and thereby contribute "to a virtuous cycle of jobs and growth."

He wants a restoration of confidence in public finance via a reduction in "entitlements" and is willing to support a series of tax increases for the "wealthy" so long as government support for the poor is selectively reduced. He also wants to close income tax "loopholes" and seeks a reduction in the corporate income tax rate.

Government should pursue private-public partnerships to develop US resources, particularly the increased oil and gas that are now being made available via fracking, Blankfein suggests.

When it comes to global trade, the country should "move forward to realize bilateral and regional agreements, enhancing the international flow of goods, services and capital." The government and private sector should also seek "immigration reform" by making it easier for skilled works to immigrate to the US.

Finally, Blankfein makes a somewhat obscure reference to the current anti-business climate in the US in part fostered by Occupy Wall Street and other such movements. He writes:

America has a long tradition of talented and experienced people who have gone to work for the government after a successful business career. They bring to public service useful perspectives about how business operates and, while in government, they develop a deeper appreciation for the responsibility government has to broader constituencies. Their experience is a virtue, not a vice, and should be encouraged in the years ahead.

Blankfein claims that Goldman Sachs and the heads of Fortune 500 companies with whom it works "all want to see progress and contribute to it." He concludes by explaining that he and those around him are ready to roll up their collective sleeves and support the Obama administration and Congress "to help fulfill America's enduring promise."

The larger point that must leap out about this eager-to-please article is, of course, what it leaves unsaid. The system that Blankfein is eager to fix is not one that is going to prove sustainable in the long term.

More than this, the system has been undermined apparently by the very people for whom Blankfein works. Goldman Sachs has been pilloried as sitting at the center of the problem. But in reality, Blankfein and the others are glorified accountants. The real power surely belongs to those who control the BIS and some 150 central banks around the world.

The most dominant of these is the Federal Reserve. Its huge gouts of monetary issuance, trillions since the financial crisis of 2008, enable those who control the money spigot to reshape society virtually as they choose.

Every part of society these days, at the topmost level, is aimed at achieving more centralization of power and subsequent authoritarianism. The tools are war, progressive taxation, monetary inflation and regulatory democracy.

The strategy is apparently to induce serial recessions and depressions and then to propose ever more Draconian globalist solutions. This mechanism has been aggressively in play for over a century. We call it "directed history."

The problem comes when the system itself threatens to destabilize. It is supposed to cause a kind of evolutionary ruin, but this makes it prone to breakdowns. At such points, the system needs help. It must be propped back up. "Compromises" must be made to insure its health.

This is what Blankfein is trying to do. He is suggesting US leaders work together to salvage the system in order to reinvigorate it. This is the unstated priority of Blankfein's editorial. He is reminding the US sub-elite for whom it really works. It's NOT for the citizens of the US but for a supra-national band of elites who have gradually installed this self-perpetuating and destructive authoritarian mercantilism over decades.

After Thoughts

No, US elites do not need to "fix" the Fed or the progressive tax system of its US$3 trillion Leviathan fedgov. US elites do not need to fix the military competences of their Empire. Here's hoping that even if they roll up their sleeves, they find they can't.

Posted in STAFF NEWS & ANALYSIS
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