Who Rules America - Part 2

[Last paragraph of previous post on 1/16/2007]
All RC financial sectors have been enriched by White House and Congressional policies. All have benefited from the ascendancy of ‘liberalizing regimes’ throughout the world. They have reaped the gains of the expansionary phase of the international economy. While the entire ruling financial, real estate and trading sectors have been the main beneficiaries, it has been the financial groups, particularly the investment banks that have led the way and provide the political leadership.

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Ascendancy of Financial Capital
‘Finance capital’ has many faces and cannot be understood without reference to specific sectors. Investment banks, pension funds, hedge funds, savings and loan banks, investment funds are only a few of the operative managers of a multi-trillion dollar economy. Moreover each of these sectors have specialized departments engaged in particular types of speculative-financial activity including commodity and currency, trading, consulting and managing acquisition and mergers. Despite a few exposés, court cases, fines and an occasional jailing, the financial sector writes its rules, controls its regulators and has secured license to speculate on everything, everywhere and all the time.

They have created the framework or universe in which all other economic activities (manufacturing, retail sales and real estate) take place.‘Finance capital’ is not an isolated sector and cannot be counterposed to the ‘productive economy’ except in the most marginal ‘local activity’. In large part finance capital interacts with and is the essential driving force in real estate speculation, agro-business, commodity production and manufacturing activity. To a large degree ‘market prices’ are as influenced by speculative intervention as they are by ‘supply and demand’. Equally important, the entire architecture of the ‘paper empire’ (the entire complex of inter-related financial investments) is ultimately dependent on the production of goods and services.

The structure of power and wealth takes the form of an inverted triangle in which a vast army of workers, peasants and salary employees produce value which becomes the basis for near and remote, simple and exotic, lucrative and speculative financial instruments. The transfer of value from the productive activities of labor up through the ladder and branches of financial instruments is carried out through various vehicles: direct financial ownership of enterprises, credit, debt leveraging, buyouts and mergers. The tendency of ‘productive capitalists’ is to start-up an enterprise, innovate, exploit labor, capture markets and then ‘sell-out’ or go ‘public’ (stock offerings).

The financial sector acts as combined intermediary, manager, proxy-purchaser and consultant, capturing substantial fees and expanding their economic empires and… preparing the way to higher levels of acquisitions and mergers… ‘Finance capital’ is the midwife of the concentration and centralization of wealth and capital as well as the direct owner of the means of production and distribution. From exacting a larger and larger ‘tribute’ or ‘rent’ (commission or fee) on each large-scale capital transaction, ‘finance capital’ has moved toward penetrating and controlling an enormous array of economic activities, transferring capital across national and sectoral boundaries, extracting profits and dumping shares according to the business, product and profit cycle.

Within the ruling class, the financial elite is the most parasitical component and exceeds the corporate bosses (CEOs) and most entrepreneurs in wealth and annual payments. It falls short of the annual income and assets of the super-rich entrepreneurs like William Gates and Michael Dell.