Are Americans as corrupt as the Clintons?

May 22, 2015 12:48 AM (UTC+8)

 

I have been reading Peter Schweizer’s book Clinton Cash with brief pauses to wipe the puke off the computer screen. For the past fifteen years, there has been no sewer too stinky for Bill and Hillary to bathe in. Most of Schweizer’s research has already made the mainstream media, but the sheer mass of it still amazes. It’s not one malfeasance or three, but an unbroken pattern of overtly corrupt behavior trading half-million-dollar speaking fees and multi-million-dollar payoffs to the Clintons’ foundation in return for billion-dollar mining concessions and corporate takeovers staged by the most revolting gangsters in the jungle of Third World governance. The English language needs a word like the Yiddish term “chutzpah” to describe them, but without the connotation of modesty and discretion.

What kind of people are we Americans, that we allow these kleptocrat’s hirelings to persist in public life? The answer, I fear, is that we have become corrupt ourselves. I’ve seen enough corruption in the Third World to know that it requires the consent of the governed. Between 1988 and 1993, I directed a Mexican research project on tax and regulatory reform. In 1990, I advised Violeta Chamorro after her election victory over Nicaragua’s Sandinistas for exactly one week, coaching her team in negotiations with the International Monetary Fund. Back then I was chief economist for the consulting firm Polyconomics, and I canceled the contract after one of Mrs. Chamorro’s advisers handed me our fee in the form of an envelope full of $100 bills–duly declared and reported to the U.S. tax authorities. In 1992, I was asked to advise Russian Finance Minister Yegor Gaidar on currency stabilization after the fall of Communism, and made several trips to Moscow. I never did meet Gaidar, but I saw enough of the looting of state assets to persuade me to get out of Dodge. Rather than pursue emerging markets, I shifted to quantitative modeling of high-grade bonds. Even that field turned rotten in the subprime scam two decades later, but that’s another story.

Corruption in Third World kleptocracies starts at the top but trickles down to the grass roots. Every bill-collector for the public utility takes bribes not to turn off the gas or electricity–it’s cheaper to pay a bribe than to pay the bill. Every secretary in a government office takes a tip to give you the form you need to fill out to hand to the boss who will take another mordida, or bite. Everyone hustles, everyone has a scam. The people at the bottom look up in envy and contempt at the billionaire thieves who run their country, but live their lives in emulation of them; if they were tough or smart enough, they would steal billions, too. We Americans used to be better than at. I don’t think we are any longer.

As Schweizer reports, America’s favorite power couple made millions from Kazakhstan dictator Nurslatan Nazarbayev. In 2005 Bill came to the homeland of Borat with Canadian penny-stock speculator Frank Giustra. Giustra’s  shell company UrAsia Energy, a paper entity with no track record, beat out bigger competition to scupper Kazakhstan”s uranium mining concession. Bill endorsed Nazarbayev’s bid to head the Organization for Security and Cooperation Europe. a human rights organization founded by the 1975 Helsinki Accords, despite Nazarbeayev’s execrable human rights record. Senator Hillary Clinton lifted her previous objection to Kazakhstan’s chairmanship of the organization.

Schweizer reports:

In the months that followed, Giustra gave the Clinton Foundation $31.3 million. It was the first of several large donations he would make as he went on to secure other lucrative national resources deals in development countries around the world…

At the time of Clinton’s visit, Kazakhstan was on the verge of a national election. Days after Clinton departed, the opposition party’s campaign headquarters were ravaged by fire in an arson attack. On October 12 heavily armed policy temporarily arrested the opposition party’s leader….In December 2005 Nazarbayev won reelection with more than 90 percent of the vote. Bill sent him a note of congratulations. “Recognizing that your work has received an excellent grade is one of the most important rewards in life,” he wrote. “At the start of your new term as president, I would like to express confidence that you will continue to live up to the expectations of your people.” The Kazakh dictator promptly released Clinton’s congratulatory note to the public.

There’s more, and more, and more in Schweizer’s book. Less astonishing than the facts he has assembled is that everything is on the public record. They put the Mexicans to shame. Latin American dictators and their cronies don’t twerk their wallets in front of the television cameras. For example: During the “reform” administration of Carlos Salinas de Gortari, the government privatized billions of dollars of state assets, including the country’s largest commercial banks. Mexican politicians bought shares through secret Caribbean bank accounts from the government and flipped them back to private buyers at a higher price, and the private buyers took the deal as the price of admission. I know this from private-sector bidders for state assets who turned the deal down. None of it was traceable, much less visible to the public; if some public officials made vast sums from the scam, they didn’t flaunt their ill-gotten gains. They kept them in offshore bank accounts and lived with a minimum of publicity. Bill Clinton does his act in front of any gangster who will pay him–including two in Lagos, Nigeria for $700,000 each, in return for evident favors to unspeakably corrupt Nigerian “businessmen.”

Americans are becoming a nation of hustlers. 87% of American men of working age used to belong to the labor force. Now it’s down to 70%.

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What are the other 30% of American men doing? Nicholas Eberstadt gave part of the answer in his 2012 book A Nation of Takers:

Although almost all families with seniors use government benefits, over a third of families without any seniors were on at least one government benefit program—even before the Great Recession.

In 2010, over 34 percent of American households received means-tested benefits—households which included nearly half of America’s children. Yet the poverty rate was only 15.1 percent.

In 1983, fewer than 30 percent of households received one or more government benefits. By 2011, this number had skyrocketed to 49 percent. Source: Eberstadt, 31–32. The growth in entitlement spending is a bipartisan phenomenon. In fact, for the last half-century, entitlement spending has grown faster under Republican presidents than under Democratic presidents.

From 1940 to 1960, entitlement transfers accounted for under a third of federal spending. Today over two-thirds of federal spending goes to entitlements. In 2010 alone, governments at all levels oversaw a transfer of $2.2 trillion—three times as much as all military and defense spending that same year.

It isn’t just government handouts, though. The subprime scam of 1998-2008 corrupted a higher proportion of Americans than any economic phenomenon since slavery (and slavery, although wicked, was legal). Filing a false mortgage application is a felony, and millions of ordinary homeowners engaged in serious fraud during the peak years of the housing boom. The chart below was included in a 2010 FBI study of mortgage fraud:

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Scamming the government or scamming the banks is so commonplace that we take fraud for granted. Why shouldn’t we? The financial industry has no qualms about it. Researchers from the University of Notre Dame’s business school (courtesy of Dealbreaker)  interviewed 1,200 respondents in the U.S. and UK and found that

More than one-third (34%) of those earning $500,000 or more annually have witnessed or have first hand knowledge of wrongdoing in the workplace

23% of respondents believe it is likely that fellow employees have engaged in illegal or unethical activity in order to gain an edge, nearly double the 12% that reported as such in 2012.

-One in 10 respondents has signed or been asked to sign a confidentiality agreement that would prohibit reporting illegal or unethical activities to the authorities.

-This figure surges to 25% for those respondents earning $500,000 or more annually.

After the biggest scam in U.S. financial history, the Obama administration has put exactly zero bankers in jail. Of course, it has levied tens of billions of dollars of fines on the banks, which is to say on the shareholders of the banks, who are mainly pension funds and life insurance companies. In other words, the Obama Justice Department taxed the savings of ordinary people to punish the malfeasance of the bankers. The bankers who committed the crimes walked away with their bonuses except in a small number of cases.

It’s like the old joke about the housewife who calls her husband during the evening commute and says, “Be careful, dear–the television says there’s a lunatic driving in the wrong direction on the freeway.” “What do you mean, ‘lunatic?’, the husband says, “There are thousands of them!”

Democracy exists to give people the kind of government they deserve. If the American people do not have the moral fibre to extirpate corruption on the Clinton scale, they will deserve what’s coming to them.

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