WHO RULES AMERICA ?- Part I

[ Over the past year I have referred to Bush's "handlers" and his "masters", Big Business and Big Money, and the Money Boys. Bush is managed, no doubt, but he is a Pinocchio who believes he is a real boy. The Powers Behind the Throne have lesser beings to do the actual handling and managing, the pulling of strings of this egotistical, megalomaniacal, fantasy-ridden, stubborn puppet in the White House.

"Who Rules America" is an abbreviated and simplified explanation of a very complicated process. The entire essay is too long to publish in its entireity at once so will be divided into segments. To better understand who OUR masters are and how the system functions, this is a good primer. As I always say, "Know Thine Enemy" WA]
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Who Rules America - Financiers
http://www.informationclearinghouse.info/article16140.htmWho Rules America?James Petras01/11/07 "Information Clearing House" -- -- In the broadest and deepest sense, understanding how the US political system functions, the decisions of war and peace are taken, who gets what, how and why, requires that we address the question of ‘Who rules America?’

In tackling the question of ‘ruling’ one needs to clarify a great deal of misunderstandings, particularly the confusion between those who make governmental decisions and the socio-economic institutional parameters which define the interests to be served.‘Ruling’ is exacting: it defines the ‘rules’ to be followed by the political and administrative decision-makers in formulating budgetary expenditures, taxes, labor and social legislation, trade policy, military and strategic questions of war and peace. The ‘rules’ are established, modified and adjusted according to the specific composition of the leading sectors of a ruling class (RC).

Rules change with shifts in power within the ruling class. Shifts in power can reflect the internal dynamics of an economy or the changing position of economic sectors in the world economy, particularly the rise and decline of economic competitors.The ‘rules’ imposed by one economic sector of the RC at a time of favorable conditions in the world economy, will be altered as new dominant economic sectors emerge and unfavorable external conditions weaken the former dominant economic sectors. As we shall describe below the relative and absolute *decline of the US manufacturing sector is directly related to the *rise of a multidimensional ‘financial sector’ and to the greater competitiveness of other manufacturing countries.The result is an accelerating process of liberalization of the economy favored by the ascending financial sectors.

Liberalization in pursuit of unregulated flows of investments, buyouts, acquisitions and trade increases the financial sector’s profits, commissions, incomes and bonuses. Liberalization facilitates the financial sector’s acquisition of assets. The declining competitiveness of the older ruling class manufacturing sector dependent on statist protectionism and subsidies leads to ‘rear-guard’ policies, attempting to fashion an unwieldy policy of liberalization abroad and protectionism at home.

The answer to the question of who rules depends on specifying the historical moment and place on the world economy. The answer is complicated by the fact that shifts among ‘sectors’ of the ruling class involves a prolonged ‘transitional period’. During this period declining and ascending sectors may intermingle and the class members of declining sectors ‘convert’ to the rising sector. Hence while power between economic sectors may change, the leading class groupings may not lose out or decline. They merely shift their investments and adapt to the new and more lucrative opportunities created by the ascending sector.

For example, while US manufacturing sector has declined relative to ‘finance capital’, many of the major investment institutions have shifted to the new financial ‘growth sectors.’ Concomitantly, the converted sectors of the ruling class will shift their policies toward greater liberalization and deregulation, thus severely weakening the rear-guard demands of the uncompetitive manufacturing sector. Equally important within the declining economic sectors of the RC, drastic structural changes may ensue, to regain profitable returns and retain influence and power.

Foremost of these changes is **relocation of production overseas to low wage, low tax, non-union locations, the introduction of IT technology designed to reduce labor costs and increase productivity, and diversification of economic activity to incorporate lucrative financial ‘services’.For example General Electric has moved from manufacturing toward financial services, **relocated labor intensive activity off-shore and computerized operations. Through these moves the distinction between ‘manufacturing’ and financial capital has been made obsolete in describing the ‘ruling class’.

To the degree that older manufacturing capitalists retain any economic and political weight in the RC, they have done so via *Asia and Mexico (General Motors/Ford), invested in overseas plants to capture foreign markets, or have been converted in large part into commercial and importing operations (shoes, textiles, toys, electronics and computer chips).Locally based manufacturers which remain in the RC are largely found among **military based industries and manufacturing and dependent upon political support of congressional and trade union officials, eager to secure employment for a shrinking manufacturing labor force.

During this transitional period of rapid and all-encompassing changes in the ruling class, enormous financial opportunities have opened up throughout the world. As a result of political tensions within the* ‘governing class’, key policymakers are drawn directly from the most representative institutions of* Wall Street. Key economic policies, especially those which are most relevant to the RC, tend to be overwhelmingly in the hands of tried and experienced top leaders from Wall Street.Despite (or because of) the ascendancy of various sectors of financial capital in the RC, and their agreements on a host of ‘liberalizing’ economic policies, they are not homogeneous in all of their political outlooks, party affiliations, or their foreign policy outlook.

Most of these political differences are questions of small matter – except on one issue where there is a *major and growing rift, namely in the sector aligned with the * state of Israel supports a *bellicose policy toward the Jewish state’s adversaries (*Iran, Syria, Hezbollah and Palestine) as opposed to another sector of the RC favoring a diplomatic approach, directed toward securing closer ties with *Arab and Persian elites.

Given the highly militarized turn in US foreign policy (largely due to the ascendancy of *neo-conservative ideologues, the strong influence of the* Zionist Lobby, and the instability and failures of their policies in the Middle East and China) the RC has pressed for and secured direct control over foreign economic policy.The tensions and conflicts within the RC – especially between the *Zioncons and the ‘free marketeers’ – have been papered over by the enormous economic benefits accruing to all sectors.

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.

[WA: Part 2 later]