End The US Dollar Chokehold On The World – Nomi Prins & Robert Scheer
The “big club” that “you ain’t in,” as George Carlin famously put it, is increasingly visible as the presidential election rolls on toward November. Politicians and the donor class that controls them have made it known to the public that they are not representatives of the majority but rather the small elite minority. Nomi Prins, financial historian, author and former Goldman Sachs managing director, joins host Robert Scheer on this episode of the Scheer Intelligence podcast to describe exactly how this process works as well as touch on the evolution of the world economy away from the U.S.
As a result of U.S. mishaps in 2008 with the financial crisis as well as the current geopolitical involvements in Ukraine and growing disruptions between the U.S. and China, Prins explains how the world is recognizing the ability to move past the U.S. as well as the dollar: “What’s happened is the alliance of nations that needed the U.S. and needed the dollar to trade don’t need it anymore.” China’s rise with the BRICS nations alongside has encouraged this, and the U.S.’s policies of supporting the financial system and allowing the banks to run things has led to the rest of the world to say, “We will compete, we’ll do exactly what you’re doing, but we’re going to do it on our own terms.”
Back at home, when it comes to economic justice, the two party system, in short, is a farce, and the difference between how the internal system of each party works is hardly noticeable. “Everything kind of moves upward and gets smaller as it moves upward in terms of who has the power and who wants to retain the power,” Prins tells Scheer. That’s why, she asserts, “even if things get questioned on the surface, the idea of changing them doesn’t really get pushed throughout party policy.”
As much as people try to push for or enact change, the questions fall on deaf ears, Prins says. People “can blame the other party, they can blame each other, but they don’t get to blame the system, because they don’t feel that there’s any real connection or control that they could have over the system.”
Host: Robert Scheer Introduction: Diego Ramos
Transcript
This transcript was produced by an automated transcription service. Please refer to the audio interview to ensure accuracy.
Robert Scheer
This is Robert Scheer with another edition of Scheer intelligence, where the intelligence comes from my guest. In this case, Dr. Nomi Prins, I would say, I think most people in the world, even when they pretend they know about banking and the international banking, are really full of it, frankly, and I did my graduate work in economics and everything. There’s only one person that I can turn to who really makes sense of it. She’s not working for the Big Bang. She’s not she did once worked for Goldman Sachs as a manager, but she’s an independent writer in the best sense of the word, and she has written a whole list of the most important books about international banking, the World Bank, trading system, central banks and so forth. And I’ve guided, I think, three podcasts with her that you can find here on KCRW and elsewhere, and but I want to focus on what I think is the issue with central banking. Right today, there is a rebellion against the power of the central banks, basically of the Western economies. And the revolt takes in people of different religions, economic outlet, different ideology. It’s United China and India, to some degree, they are both part of this BRICS coalition that is challenging the power of the dollar, the power of the central banks that cooperate with it. I’m going to turn it over to you Nomi, because I want to know, is this a time of profound change challenge, what’s going on? And you know, the banking system has been used for political leverage in an extreme way, in terms of the boycott of Russia, pushing China around and so forth, but there seems to be a rebellion that might be having a big impact take it away.
Nomi Prins
Yeah, and thanks. It’s so great to be speaking with you again. It’s been a while, and thank you for the intro. And yes, we are in the middle of, not even the middle, I think we’re at the beginning of a transformation of global trade and the center where global power is from the standpoint of economics that started really as a result, initially, of the financial crisis of 2008 and just the fact that the US banking system, the Fed accessor, was so ill equipped to handle itself, to contain its own risk, but over the years, and particularly in the wake of covid of supply chain disruptions, of what happened when Russia, Russia escalated its war in the Ukraine, and subsequently the US cut off some of its access to international financing. All of these elements have been part of a growing transformation in the global economy that is creating two specific polls. One is the Old West, centered around the United States, Europe, et cetera. And then one is the BRICS, plus countries, which now include a number of Middle East countries as well that are that are oil producing, natural gas producing, and themselves very involved in the energy markets that center around China. And what has happened is that Chinese central bank has really divorced itself in the policy of the Fed. It acted in concert with the Fed in the wake of 2008 now it doesn’t, and there’s a real shift towards this re regionalization of trade, and that’s not going to diminish, and with that, a de dollarization. It’s not like the dog’s gonna go away tomorrow, but trade that happens without the dollar. Some of this was because of US policy and in retaliation to US policy, and some of it’s just in a general strengthening of alliances, trade alliances and political alliances between the BRICS plus countries and other countries that are even wanting to be a part of BRICS Plus, there is a large list of countries that want to join, and this is going to continue. This is how the world is developing right now.
Robert Scheer
Well, it’s incredibly significant and all sorts of implications. One is the prosperity of Western capitalist countries, particularly the United States that got a big leap forward after World War Two, most economies were destroyed. Others were in a low level of development with huge populations, India, China and so forth, and even the rich resource rich countries like Iran and Saudi Arabia were totally controlled by Western, British Petroleum and other Western companies, the CIA meddled in their affairs and everything, and as a result, the dollar was unhinged from the gold standard, and the dollar became an independent force. Now there’s a lot of people have talked about that over the years. And one thing we can agree on, it favored the one country that can print dollars, the United States, and that is, seems to be at the crux of the matter, that the United States can throw its weight around because it can encourage inflation, discourage it print more or what have you. And basically these other economies that don’t seem to agree on very much. I mean, used to be Saudi Arabia and Russia were at odds. Now they’re allied in OPEC, plus China and India. I mean, they still have a lot of tension, but they seem to be in agreement on challenging the dollar. Does it go to a basic question of ethics and economics, and have we rigged a game? And is it now being questioned? We being the US?
Nomi Prins
I think it’s being fought against economically, as opposed to militarily, back back in the day when we had a gold standard, when the US because of that, because of Bretton Woods, and because of the dollar becoming the international currency and the reserve currency, which it still is. But more significantly, there wasn’t so much of a way to push and what happened? And it’s interesting, you know, you mentioned the gold standard going away. And what has happened is that central banks outside of the US centric system, China, India, Brazil, to an extent, Turkey etc, are trying to effectively grow their gold reserves again. Why are they trying to grow their gold reserves again? Because they’re looking at any way possible to diversify against the supremacy of the dollar in order to have that autonomy within the global system. It used to be the US, yes, and now China’s saying, Look, we’re developing more quickly the United States, we’re have more technological patents in the United States. We have more nuclear energy and advanced power plants and other forms of energy, and they’ve got negatives on cleanliness, but also are developing, and we’re just moving more quickly in terms of just the general move forward, and we’re going to do that with partners. And what’s happened is the alliance of nations that needed the US and needed the dollar to trade don’t need it anymore. Saudi Arabia doesn’t need to value petroleum in dollars anymore. They can value it in a block that is continuing to strengthen. I was in Brazil in April, and I’ve done a lot of I did my page down the triangle between Brazil being in the middle of China in the US, and how that’s moving more towards China with, of course, diplomacy with the US still intact, but still from the standpoint of production, of workers, of partnerships. And I was in the capital actually talking about the g20 which is going to be happening in Rio in November. And what was going to be discussed at the g20 it’s going to be big on energy. It’s going to be big on digital platform, currency. Why? Because it wants to create a digital way of of de dollarization and of creating more, whether it’s a world currency or what’s the currency amongst BRICS and other nations, as simply a method of payment, of securing flows of funds for products and services and trade across these nations. And what was interesting to me, just on a real sort of like basis, is, you know, you take Ubers, we do everywhere, and in the capital of Brazil, Brasilia, the only car that that Uber drivers were driving was a BYD and an EV BYD. It’s called Build. You build your dream. It’s a Chinese company. They’re manufacturing now in the center of or trying to build a plant in the center of Brazil, and Teslas are nowhere to be found. And while I was there, Elon Musk was having a pretty strident argument with Lula, the president of Brazil, about the fact that he was favoring, in his opinion, a Chinese car company. And then you sort of flash back out of that. And the reality is these cars are not just going into Brazil, they’re going into Italy, they’re going into France, they’re going into Germany. They’re outpacing in trade. Some of what’s happening with with a key new development, key new product that the United States is also competing on through Tesla, and it doesn’t need to have the United States market in order to be successful, and that has been a significant development in de dollarization as well, is that trade and movement and currency has all been shifting, but also there isn’t as much of a need, because the economies are growing so quickly, the alliances are growing so quickly for the United States, and that just diminishes the United States power from from a trade and currency perspective, perhaps not a military perspective, but it, but just it just eat away at that power base.
Robert Scheer
Well, the irony here is that the US has tied the notion of freedom of and efficiency and prosperity and fairness with the notion of the markets. And as long as the market favored the most developed countries, and they had all the high tech and they controlled the banking system, the others were trying to get the scraps off the table so China, and you’re competing to put out cheap T shirts or, you know, do all the kind of low tech work. And the big profit on technology, the low tech work is doing assembling the phones, profit is made in Cupertino and so forth. I don’t want to put words in your mouth, because you have an expertise that I don’t have in this area. But it seems to me, the real issue is that in order to develop, you have to avoid what has been called the middle income trap. You have to really get to some notion of development. The threat from China, and it will be increasingly a threat from Brazil or India, is they want to get into the high tech. They want to get where the high profit is. And we seem to be actively now, with the cooperation of these central banks, punishing these people for wanting legitimately, a bigger part of the pie, not by stealing it or cheating all the things we used to accuse even Japan of, but actually being better at producing. And the company you just mentioned, BYD and China was started with quite a big investment for Warren Buffett and what they have shown. And by the way, Tesla has its biggest plant in Shanghai, so the electric car market. I speak out of some bitterness. I had a Chevy Bolt that wasn’t even made in the United States. Was called an American car. 70% of my car had been made in Korea, South Korea, Sova. But I was being good for American workers. I had a Chevy Bolt, two of them six years. And the fact is, the company could never back it up, and it didn’t match what a Tesla made in China or anywhere else could do, let alone what a BYD can do for half the price. So isn’t this really a war over whether you believe in an international free market or the whether you want it still rigged for the privileged nations. And just to tie it into your earlier work, it’s the same game that was played in the United States with central banks. You basically create, recreated a market system which was not a free market, but one that favored the people of affluence who could game the market. So isn’t there a continuity here in your own life work?
Nomi Prins
It is. My own life work, if I think about them…
Robert Scheer
Which, by the way, give the name of the last book and how you reached on substack and how I didn’t give you a proper promotion. But people want to keep up with your work. It’s very easy. I blew it by not doing it at the beginning. So why don’t you do it now and summarize that life work and how it applies to the current situation?
Nomi Prins
Sure. So a lot of my books are including permanent distortion, which is my most recent book collusion, which is how central bankers rigged the world, which was the book that happened before that that really ignited a lot of this shift that we were talking about in the beginning of this, of this interview, and in other books, all the presidents, bankers, it takes a pillage. These are all the through line of my books, and you can find my current work on prinsights.substack.com, where I continue the through line narrative, across trade, across currency, across commodities, and across the main theme of Wall Street as a name, but effectively the financial system being rigged to the benefit of the people at the top of the financial system that control it as being counter to Main Street or the real economy and real people. So I constantly look whether it’s historically or internationally from a supply chain perspective now, or whatever it may be, as to how that system has been rigged and how it evolves and how it’s changing, who benefits who doesn’t, and how that’s changing. And that’s, that’s the sort of general summary of my work regarding, you know what you said there about BYD versus Tesla, and how stuff is produced in China for Tesla, but we know BYD sells in different places. And I was saying it doesn’t necessarily need the United States. The world is a big place. The world is catching up with its own, with the competitiveness with with the rigged nature of markets that the United States has been so good at, and the banking system has been so good at, and the Federal Reserve has been so good at subsidizing and enabling in its own ways. And its own ways are developing in other countries using energy from other countries. One of the reasons that Brazil is growing so quickly in terms of partnerships is because its energy sources are very cheap. Its net positive on energy. So if you’re going to build a factory, if you’re going to have a manufacturing site, if you’re going to have infrastructure going to and from that site. You need to pay the bills, you need the utilities you need. You need the massive amounts of energy to run an AI data complex, which is growing there as well. And where can you do that more cheaply? It used to be about labor being cheaper. Now it’s about also things like energy being being cheaper, sort of the other aspects of producing and creating and expanding technology manufacturing or products and countries are looking outside of the traditional relationships with the United States and strengthening the relationships with countries that can give them what they don’t have. And again, that is going to continue as a trend.
Robert Scheer
So let’s cut to the chase, because in the election, there’s a lot of subtext of a protectionist nature. We’re being taken advantage of by other countries, particularly China. They subsidize different things like, you know, solar power, they subsidize the cars and all that. And it’s sort of the old argument. Everybody likes competition, as long as they’re winning, and when they’re not winning, then they want regulation and control and they want the game rigged. And I just, you know, watching both party conventions, they are both eager in order to proclaim USA, USA, USA. America is great. I’m going to make America great. America’s always been great. Blah, blah, blah. The fact of the matter is, we aren’t great in every respect, and we’ve been living very high on the hog based on Yes. We came out of World War Two, everything was destroyed. We can make stuff we have a hard working, educated workforce. I’m not denying that, but the fact of the matter is, for all, the proclamation of our belief in capitalism when it’s actually practiced effectively to help other people, after all, having a successful economy in China helps a lot of people. There’s probably a middle class now of 400 million or something. You know, there’s a lot of mouths to feed, and ironically, China is actually seeing a declining birth rate as one aspect of prosperity. India obviously faces even more serious problems, but they’re getting into high tech, aren’t we really, basically talking about freedom in the world and prosperity in the world, and ethics. What is fair and do we as the most advanced nation and our allies in Western Europe, really have to always been the top dog, and the key to being top dog is to own the dominant currency. Is that an oversimplification, or is that accurate?
Nomi Prins
That’s how we be been the top dog is having the currency, having the banks, excuse me, and having that central bank, excuse me. So to your point about competition, about where the US stands. We have been able to control the banking system globally, the currency because of the Federal Reserve and how our banking system works. And we’ve been able to really rest on our laurels, from the standpoint of a country, with respect to having an economic plan. So both parties are talking about little fixes around the edges and making all these promises, but there’s no actual fundamental plan in terms of growing their economy. China has a five year plan. They also have development banks that can help to finance that plan that includes growing infrastructure and technology within China and within their trading partners. So there’s more of a sense of competing from the standpoint of more planning. The United States hasn’t had to do that, hasn’t felt it needed to do that, and isn’t doing that. And one of the things we didn’t hear from either the RNC or the DNC from either presidential candidate, is the details of how to actually move America forward, whatever rhetorical phrase you want to use for that. So, for example, we don’t invest in our infrastructure. The American Society of Civil Engineers rates are infrastructure, and their report card is c minus. They don’t do that just ad hoc. They have significant analysis across the states, across projects, from bridges to ports to airports to power lines to communication systems, and it’s a very rigorous study that goes on all the time to come up with, with these inferior grades and the amount of cost it would take for the United States to take on a significant upgrading and modernizing of all of its infrastructure, from the power to the physical roads. And this is something that China has taken on board, and it’s something that it kind of trains with its partners, as well as one of the things that binds them together, and in return, you know, use our currency or use our currency block, or we’ll keep the dollar out of it. So it’s it’s a couple things that have gone on recently. One is, we effectively blew up our financial system. And the only thing that’s happened since 2008 is there’s been more subsidies given from the Federal Reserve to help it, even when covid happened, most of the money that was created by the at the time it went to the financial system. That’s why, when you look at the US stock market, it basically rallied even during the time where the Fed was supposedly trying to reign it back since March 2022 because there’s so much money sloshing around that was created so cheaply that it has its own momentum. But that doesn’t mean there’s an economic strategy to actually build things, actually look at manufacturing plants, to actually look at the cost and trying to figure out how that cost can actually be met, versus just arguing about about the budget in Washington and determining, okay, we’ll do 2 billion here for this line, or we’ll do 2 billion here for this bridge that just collapsed, or we’ll have a bipartisan infrastructure law, which is $550 billion of extra money, but at the same time, we have a $5 trillion Need for modernizing and upgrading our infrastructure across the country, so we’re getting a fraction of what we actually need, and it’s coming at the cost of more debt, which penalizes the average person, because it means that before the White House turns the lights on, it has to pay the interest on that debt, and then that comes out of growth possibilities or helping the actual citizens of the country. So there’s a lot of places in which the rigging of the market, the having the dollar as the supreme currency, the ability of the banking system to be in control of the rest of the banking systems in the in the world, and have central bank that supports and promotes that, even when it messes up. All of these things have basically come to a fruition where we’re now seeing the rest of the world saying, You know what, we will compete. We’ll do exactly what you’re doing, but we’re going to do it on our own terms.
Robert Scheer
I’m sorry I was going to read the first pages of your most recent book, but it’s, you know, you summarize some of it, but it really establishes quite brilliantly, the dilemma we’re in and why we have so much unhappiness. Because you get a lot of people in the establishment, whether they’re Democrats or Republicans who say, Oh, like Hillary Clinton did, it’s the deplorables or the losers or the rural people, or they’re racist or what have you, but the unhappiness, they’re the losers. But in your you have a compelling description of the gap between the appearance of prosperity of the stock market, of the people who can manipulate, the people who can game the system and the average person, and why the average person feels like, No, we’re left out. And a lot of that has to do with the machinations of the Central Bank, the manipulation of trade and so forth. Could you just kind of describe because it goes a long way to explaining the unhappiness in this country. We’re in a situation where half the country thinks the other half is crazy and they’re responsible for the thing falling apart. The American Dream seems to be fundamentally in question, and yet, what. Are we doing? We’re doing whatever a major society has done. In time of disarray, we look for scapegoats, and the scapegoat in a moment is China, but you know now maybe it’ll even be India, because Modi wants to have his share of the action, or maybe it’s Lulu in Brazil. So could you just describe that tension that’s going on, it affects the American election in a very profound way.
Nomi Prins
Yeah, it does. I write about this quite a lot, in permanent distortion, which is that economic anxiety that people have, because they are actually not just feeling left behind, but they actually are left behind. Of the the prosperity that sort of floats to the top of the spot stock market and to the individuals who have the most concentration of that stock is actually real. So there’s a number of ways we can look at that. We can look at that in the grand way of GDP here, the gross debt, the Gross Domestic Product of the United States and say, All right, well, that’s pretty much flat. Well, what do you mean it’s flat? Well, this quarter, it was revised to be up 3% over the quarter. That’s pretty flat. If you adjust it for inflation, which is also around 3% and if you adjust it for wages and wage growth, it’s it’s flat again. On the flip side, the stock market has had a really good quarter. It’s had a really good year. It’s had a really good decade. It’s had a really good two decades. The reality is that the the excess money that gets created in the hands of the financial system and the larger players that own and influence and are concentrated in that wealth can be, you know, use the word manipulated. It can be manipulated, leveraged, re engineered, in order to create much more wealth on paper that becomes wealth in power for the people that are involved. The thing is, with the stock market or property or anything else, is that most people don’t have that same sort of involvement or participation or power over it. So there’s an actual feeling of helplessness. And then you add numbers to that feeling. If we look at the fact that debt today, household debt, is creeping up near $18 trillion that is a record high. It’s a 17.7 as as for the New York Fed’s latest report on that. And every single debt category, from credit cards to auto loans to home mortgages are all facing rising delinquencies and defaults. What does that mean to me? People cannot afford their their their base needs. They can’t afford to drive to work, or they can’t afford to pay their rent, or they can’t afford a mortgage on another place, and now rates are higher, so that’s all even more expensive. And this idea, this myth, and this is where people feel so anxious, and understandably so, that somehow the Fed is fighting inflation for them, or that somehow it’s all going to be okay if we, you know, tear up China, or whatever it might be. It is really a misplaced notion, because, first of all, the Fed cannot control inflation. Actually, it can move the rates of money up and down. It hasn’t brought the housing prices down. It hasn’t brought rent prices down. It can’t create natural gas or copper or silver or wheat or, I mean, it can’t worry about how your rent is going to be paid each month. It doesn’t care, and it can’t control the inflation of those things. And it hasn’t. The result of the last two and a half years is that it hasn’t. It says it has. Inflation has come down, but everybody’s paying more for everything. So what does that mean? It means that people feel continually strained. And so you look at your leaders, and you look at each other, and you say, All right, well, the Republicans are saying and they can do this, and that’s going to help me. The Democrats are saying they can do this, and that’s going to help me. But the reality is, people don’t see an out of that economic strain, and so you’re right, but they blame each other. And when they can’t blame each other, it’s a very easy narrative to blame China. Now the policy on tariffs in China on the Republican side and the Democratic side is Democrat side is pretty identical. The language about how China is used to be the sort of enemy of the United States could be a little bit different around the edges, but the policies are pretty identical. The reality is this goes back to the fact that we don’t have a will, a policy, a priority on actually helping Americans and the American economy to be divorced from this financial manipulation. No one’s saying sort of reduce the control that banks have over the financial system, or re regulate them, or the things we’ve been talking about forever, bring back that Steagall, make them less powerful. There are so many things that this country isn’t really doing, and so when people feel economically afraid, it’s real.
Robert Scheer
But you know, what’s scary about this is that most of profound, authoritarian, fascistic movements that we’ve seen in the world come in response to economic upheaval that you know, and then you find the scapegoats Okay, whether you’re talking about Germany between the wars, but or Italy. But you could talk about any country. You could talk about the history of China, any country. So the economics doesn’t stay placed. The economics drives madness, confusion, refugees, you know, war and so forth, and and what you’ve just stated is the most alarming observation that we are incapable of an intelligent debate, discussion, election, about economics, and if you think about it, because going back to your books, like, What was the title about the one that was A parody of Hillary Clinton, I’m sorry, village, oh, it takes a pillage. I’m sorry I got…
Nomi Prins
Yes, yeah, that was the hill, yeah, that was the it was it takes. That was after the financial crisis, yeah.
Robert Scheer
But the fact is, the financial crisis did not come about because of Wall Street greed of Republicans, which used to be the old thing, the Republicans were the fat cat Party agreed, and then we had Ronald Reagan, and he’s a terrible guy. He’s going to give everything to the rich the fact that matters. He didn’t pull it off. It was Bill Clinton who ushered in successfully, got an alliance. We’ve discussed this in previous shows with the Republicans. Bill Graham and others to deregulate Wall Street and basically in the name of an ultimate free market which ended up destroying particularly black and brown college graduates, people who didn’t have, you know, got sucked up in the housing market. The Federal Reserve has documented all that and and yet. So it was bipartisan. And the bailout, which came when Obama was president, and even Kamala Harris opposed it when she was attorney general in California, it was a bailout that made the banks hold none of the bankers went to jail. And so the central bank, and you know, the central bankers go into the government, they come out. Timothy Geithner is a perfect example of someone going back and forth. Lawrence Summers, my goodness, you know, he gets to be head of Harvard, and then he works for the big I mean, you know, all these scandals. And so how is it that the media and everyone else ignores the obvious, that we don’t live in any kind of economic democracy. The economic issues are not in any serious way discuss about how we get winners and losers. It’s never related to foreign policy. You know, like we’re not angry with China now because they’re violating human rights or so forth, or not paying their work is enough. There would be legitimate criticism. Why doesn’t China have more vigorous trade unions instead of official trade what is their minimum wage? What are their work? Those would be legitimate you don’t hear any of that. We’re very happy when the Chinese are producing. Got us through the pandemic, producing our toilet paper, producing everything that we needed. You know, it’s only when they excel, get into the high profit area that suddenly we connect the economic to the political. And so you have been fighting kind of, I know you got to go, and we’re taking a lot of time, but you’ve been fighting a lonely fight. You started out as a banker. You went you were working at Goldman Sachs. You’ve been swimming with the sharks and the scoundrels and everything. Why is there so much resistance to this message, and particularly now, when you have the most extreme billionaires control the mass media, even directly right the resources of this world.
Nomi Prins
I think that, I mean, that’s part of the answer. What we’ve seen or what has happened since I did leave Wall Street, and we’ve had all these conversations about how, how the power, or not just the money, but the power flows to the top. What, which was predominantly just the Wall Street CEOs. Now, of course, you got the tech CEOs. You got the media sort of merging of tech CEOs, you know, Elon Musk, who has ex flash, Twitter and and all the other companies he has, and all the backing he’s given. And you just, you just have phenomenal amounts of money that continue to flow in one direction, and a phenomenal amount of concentration at the top, and that creates an economy that actually benefits everyone else who is in power. When I wrote all the presidents bankers, it was about the relationship between bankers and presidents and how they mutually reinforced each other’s power, and they had relationships. That did that, and money did that. Today we have the same exact thing, except the tents a bit bigger. It’s not just bankers. It’s bankers and their friends. It’s tech people, it’s other people. But the reality is to not bring up the actual economy, aside from things like, oh, we’ll bring inflation down, or oh, we’ll make your jobs better, just, you know, sort of really hand wavy, kind of promises keeps that status quo going, and this is what we’re what we’re seeing now we’re going to continue to see. And it doesn’t matter which party is in the White House, neither party is going to question the underpinnings of what makes our economy the way it is, of what makes inequality continue to grow, of what makes people continue to blame each other or other countries instead of the actual system, because they are at the top of that system. That’s how they stay in power. Those are the people that they hang out with, and this is the mutually reinforcing set of individuals that have every interest in keeping the discussion about the actual economy, real discussion, real critiques, real possible solutions, for the most part, out of conversation.
Robert Scheer
You know, again, I promise I wouldn’t keep you longer, and you’ll never come back on here, if I don’t honor that. But I do want to say one thing. I mean, what is so outrageous is that this is done in daylight that you worked at Goldman Sachs. You know what Goldman Sachs was all about? You know what finance capital was all about? You’ve written brilliantly about it. It appalled you. You you then you went on to do more scholarly work and write about it and expose it other people. Robert Rubin is such an example. They go in and out of the government and, you know, they created Citigroup. We’re not going to visit that whole history, but it is amazing how little people the media never addresses it. It did not seem the least bit shocking when they deregulated Wall Street and made Citigroup a still troubled bank possible by destroying the whole no deal regulation of Glass Steagall and everything, and yet they get Robert Rubin goes from the Clinton administration to have a job at Citigroup being paid, what, 20 million a year, or something, 15, 20 million a year, and he’s just having a ball helping this bank supposedly benefit from the privileged position that his he put in the men when he was Secretary of Treasury. Why is there no shame? And it can’t be, I guess, a part that the billionaires own the media. But But what you are out there? The last thing I’m going to ask you, you’ve been speaking a lot. You’re tired right now. You’ve been speaking all week. You’ve written Absolutely, I’ll use the word brilliant books, because you’ve taken the boring, dismal science of economics. You did what Adam Smith did. Actually, no one ever gave Adam Smith the credit for being a great popularizer and explaining in wealth of nation how it really works from his perspective, but they explain it. And one thing you didn’t want to have is a rigged market. You supposedly had an invisible hand and a free market, and it would work, but you’ve been a lone voice, really, very few. I mean, Robert Rice used to say interesting things. He was somewhat in opposition to Clement Street, but then I think he caved. And, you know, he writes every once but not blame the power elite. Well, you just said before, and you said it in the beginning of your last book, that the game is so blatantly rigged that it creates an unhappy population that might embrace really extreme measures that are fundamentally, you know, totalitarian, evil, nasty, scapegoating, it produces violence, hatred, fear in its Wake. We are at that moment in an election where half the public is frightened to death of the other half of the public, and yet you’ve just said they’re both to blame. The leadership of both of these parties are to blame. Just ruminate on that and we’ll end this. Okay.
Nomi Prins
Well, the reason the leadership of both parties is both to blame is because the relationships that they have with the institutionalized sort of rigging of the markets, with the people that sit at the top of the firms that actually have and control how money works, and with the relationships that the Federal Reserve has with the financial component of this and so forth, it just benefits them. And also they’re in the bubble of that, that power base, regardless of whether they’re they’re Democrats or Republicans, that there’s issues of degree, there’s definitely things that are better or worse on certain issues on both sides, but but with respect to that less powerful, less rich divide they are on one side of it, you know, so the leaders of both parties, and you see that even at, you know, it’s just at the DNC last week, so it’s all fresh in my mind. But you know, you see that just even in terms of who speaks with whom and which cocktail parties invite which people to them, you know, everything kind of moves upward and gets smaller as it moves upward in terms of who has the power and who wants to retain the power and so that’s why, even if things get questioned on the surface, the idea of changing them doesn’t really get pushed throughout party policy. And that’s one of the reasons why, again, I think people, yes, they’re, they’re they’re strained. We talked about that before. They can blame the other party, they can blame each other, but they don’t get to blame the system, because they don’t feel that there’s any real connection or control that they could have over the system. And so I think that’s that’s one of the reasons why, ultimately, going back to the beginning, the United States, not answering that question, not even letting that question be discussed on a party basis, on a political basis, is one of the reasons why we’re not going to have a strategy that’s going to help people throughout the rest of the country and in a meaningful way. It’s not that people can’t help themselves. It’s not people can’t help each other, but from the standpoint of looking at it as a national priority, and I think that’s that’s a problem, and that does continue. I wrote that permanent distortion, and it is sadly true. This was before we knew what this election was going to bring, and we still don’t actually know what it’s really going to bring but that this an economic anxiety, this this disenfranchisement from having a voice, from seeing the change can really happen, is what manifests in more anxiety and more violence and more disenfranchisement. It’s kind of self fulfilling, and I hope that’s not always the case, and I hope there, there’s there’s opposition that they can actually relate to change but, but this is kind of where we’re at right now, and this is why people feel really so stressed out by the whole thing.
Robert Scheer
Yeah, they’re stressed out, and they’re all so vindictive and angry, and can get violent and they scapegoat. We should end on that. The whole problem is, if you deceive people about their economic woes and you say it’s, you know, Wall Street run by Jews, or it’s China run by those communists, it doesn’t matter how you demonize it. The current fashion, of course, is China and immigrants, no connection that you can make, but you’re finding basically a scapegoat, and you will not call out the people who actually have the power in the country, and they hide behind their slogans and their images and so forth. And it’s really, I think, a very frightening moment. The odd thing is, we seem, and I take this away from some of your writing, we seem to be uniting a large part of the world to reject this simplistic, chauvinistic nonsense. I mean, I knew growing up India was going to be the great democratic model, and then Communist China was the totalitarian model, the idea that despite their internal and nationalistic hostilities and everything, we’re bringing them together. We’re bringing Saudi Arabia together with China and Russia. I mean, it’s amazing, if you look at kind of the changing trade patterns and the I don’t know, I said I would stop it here, I will, but it’s sort of annoying that there’s one solution to the concern of decent jobs here that would be to push some kind of standard in these trade agreements for decent wages around the world, so you’re not exploiting cheap labor. It happened in the rewrite of NAFTA, just briefly, a little bit about making cars in Mexico you should pay, you know, I don’t know what it was, 16 bucks an hour or something that got that’s been abandoned. So the human rights question, the concern of America in the world rarely connected with the thing that most concerns people. Are they going to be able to make a decent living, have a decent life? And I want to end this by What’s the title of the last book, but just I recommend buying the book, but if you could stand in what still remains of a bookstore or get the Kindle version and just read the opening section of Dr Nomi Prince’s book. And the title, help me here, it’s a permanent distortion. So again, permanent distortion talks about about all of this. The single most important book you can read if you want to really understand why we have the madness of the current election in the United States and and the fear on every side of the country that if the other people win, democracy is over and we’re going to have fascism and madness. That that possibility of madness in American politics has been brought about by the economic disarray that Dr. Nomi Prins has documented as by design, as a result of manipulation of the gaming the political system, to game the banking system, and she’s done it more effectively, and I dare say, brilliantly, than any other writer. So check out her work, and let me thank the folks at KCRW that still stick with me here, Christopher Ho and Laura Kondourajian, who posts these podcasts, Diego Ramos, who writes the introduction, Max Jones, who does the video, Joshua Scheer is our executive producer. He’s the one that said, you haven’t talked to Nomi Prins in a while? She’s the only one that can answer these questions. So thank you, Joshua Scheer for reminding me that we have to go back to some of our original, great sources. I want to thank the JKW Foundation in memory of Jean Stein, a fiercely independent writer and the Integrity Media Group of giving some funding to help get these podcasts up. See you next week with another edition of Scheer Intelligence.
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