On January 20, 1980, in
With his boundless greed after profitable deals, Blum is finance capital personified, while Feinstein illustrates the corrupt, war-mongering, pro-corporate politicians who inhabit the upper reaches of the
- The financialization of capital accumulation
- Neoliberal corporate ideology
- Imperialism, militarism, and war
- Increased corporate domination of politics
- The deepening global ecological crisis
- Financialization of Capital Accumulation
One of the key aspects of any capitalist system is how capital is accumulated. Historically, the usual way is to combine human labor with raw materials and machinery to produce commodities, then sell the commodities at a profit (accumulating capital), then repeat this process of production to accumulate more. In mature capitalist economies like the
This tendency or trend is best labeled the financialization of accumulation. No production is involved, simply speculation, usually called “investments,” in the mainstream media. Finance capital creates nothing, rather it takes into its own hands the surplus value created by others at home and abroad. The speculation involved in taking this value from its human creators can be very complex and difficult to understand (credit default swaps, private equity deals, derivatives, hedge funds, commodity trading, leveraged buyouts, arbitrage etc.) or be straightforward purchases of assets or entire companies to merge them into a bigger entity. Following such purchases, the new owners typically increase the exploitation and alienation of workers in order to raise profits. Such speculative activity can lead to stagnation, economic crisis, and the danger of economic collapse when the people doing the speculating guess wrong about price increases or decreases. When such a crisis occurs, as happened in 2008, governments typically bail out the wealthy speculators, leaving the bill to be paid by rank and file workers/taxpayers.
One measure of how pervasive the “casino economy” of speculation has become in recent decades is illustrated by statistics from the Bureau of Economic Analysis of the U.S. Department of Commerce. This Bureau has statistical breakdowns on total
Conversely, the bottom 80 percent of the population owns only 15 percent of the wealth, the bottom 40 percent of the population owns only 0.3 percent of the nation’s wealth (basically nothing), and about one in six Americans (almost 50 million people) live in poverty, with no wealth and lacking even a minimal income. The 2010 census recorded the widest gap between rich and poor ever recorded in
For Blum-Feinstein, we can see what being in the top 1 percent means. They currently own a private jet, a Gulfstream G650, “the gold standard in business aviation.” Blum-Feinstein also own an entire 161-room San Francisco hotel (The Carlton) and at least 6 other homes, including a Pacific Heights (San Francisco) mansion purchased a few years ago for a reported $16.5 million, another a ski retreat on a 30-acre parcel of land in Aspen, Colorado, built in 1999 for $7.4 million. Their house in
Feinstein-Blum’s real estate and private jet holdings are just the beginning. Blum’s empire began with his ownership of Blum Capital Partners, a firm he founded in 1975. In its 2005 edition, one standard industry source, Pratt’s Guide to Private Equity Sources, lists Blum Capital Partners as having $1.5 billion under management. Two other more recent sources list the assets of Blum Capital at the higher levels of $2.8 billion and $4.5 billion. Blum’s firm’s clients reportedly include some of
Some of Blum’s notable investments have included the real estate firm of CB Richard Ellis, Career Educational Corporation, ITT Educational Services, Lenovo, Fair Isaac, Northwest Airlines, URS, Perini and DHL Airways. Blum has been the chair of the Board of CB Richard Ellis since 2001. He reportedly owns a 15 percent controlling interest of this giant firm, widely considered to be the largest real estate firm in the world with about 28,000 employees working in over 300 offices in 50 nations and annual revenues in the billions. A Los Angeles Times article (November 1, 2006), stated that CB Richard Ellis was worth $6.7 billion, making Blum’s 15 percent worth about $1 billion at that time. Varied sources report that Blum’s investment in CB Richard Ellis amounts to less than one-third of his total portfolio, making his likely wealth level over $3 billion. Another investment is in China-based Lenovo, which was reportedly the fourth largest vendor of personal computers in the world in 2009 with assets of almost $9 billion and revenue of $16.6 billion. It has operations in
Neoliberal Corporate Ideology
Gross class inequality has been made worse by a second wave of anti-government neo-liberal ideological hegemony. Neo-liberalism is a version of extreme free market thinking, putting forth the pure logic of capital. This ideology’s aim is to cripple government’s power to serve the people’s interest, leaving the road open to total corporate domination. Neo-liberalism’s critique and actions aim not only at ending the regulatory and welfare states, it wants to shrink government’s role in economic and political life down to the point where the wealthy corporate ruling class will totally control economy, society, and political life with no interference.
Long theorized by right-wing thinkers, neo-liberalism came into vogue during the 1980s as a way to open up new markets to accumulate in order to overcome the economic stagnation characteristic of that time, similar to what has been happening again in recent years. The partial privatization of government-run programs such as education (undermining public education through budget cuts, private schools, charter schools, and voucher programs for example); outsourcing of traditional government run sectors such as prisons; “health care” laws that legally force people to buy high cost health care from monopoly corporations (insurance and drug companies as well as hospitals) or pay a fine are all examples of corporate controlled government opening up new markets for the capitalists to conquer.
Neo-liberalism as an ideology is completely hypocritical, however, because virtually all of the government welfare, sweetheart contracts, tax cuts, subsidies, and bailouts given to major corporations continue under neo-liberal governance, only the Keynesian-type benefits to rank and file workers are cut. In actual practice, therefore, it is a philosophy meant to make workers and their unions pay for the crisis tendencies of capitalism, making the capitalist crisis actually a working class crisis. Workers and their families are forced to take cuts and sacrifice to make the corporate capitalists whole. Under corporate neo-liberal thinking over the past 30 years, all aspects of the New Deal reforms of the 1930s have been under attack, with even the most popular of these reforms, Social Security, now being undermined and put on the table for eventual destruction as an “entitlement” which must be cut. This, in spite of the fact that recipients of Social Security have steadily paid into the fund through their taxes, usually for many decades.
Blum and Feinstein’s policies and actions promote this aspect of neoliberialism. Blum’s field of operation is worldwide, exporting jobs overseas to capture surplus value in areas of the world that are expanding rapidly at a time when there is stagnation in mature capitalist economies. As mentioned above, Blum’s foreign investments have focused on Asia, including
Feinstein and Blum are also major investors in two private educational corporations, the Career Educational Corporation and ITT Educational Services. At the same time, Blum donated heavily to the political campaigns of California Governor Gray Davis, amounting to at least $75,000 in a two-year period beginning in about 2000. As a result,
Blum led the Board while it raised tuition for university students again and again, increases that amounted to 32 percent in one year. Students have had to take out massive loans to attend school. One source indicates that the amount of debt loaded on all
A final aspect is cutting taxes on the wealthy and, of course, Feinstein consistently favors such cuts. One example is Feinstein’s support for phasing out inheritance taxes on large estates. In July 2000, she was one of a small group of Democratic Senators defending and voting for a Republican-sponsored bill to repeal an estate tax law first passed in 1916, a law that applied to only the top 2 percent of taxable estates. In short, it was another benefit promoted by Feinstein that exclusively helped her own and other super-rich ruling class families.
Imperialism, Militarism, and War
A third wave of our age is the interrelated issue of imperialism, militarism, and war. The stagnation tendencies of highly capitalized nations like the
Feinstein also chairs the Senate Intelligence Committee. She approved of the appointment of General David Petraeus to head the CIA, saying that she had “enormous respect” for him, and that the
The setting of the precedents that national sovereignty, due process for suspects of a crime, Congressional responsibility to declare war, and the traditional distinction between civilians and military actors (the CIA is a “civilian” agency, yet it is openly conducting war operations, drone bombings which frequently kill civilians in other nations, making the CIA operators “unlawful combatants,” operating outside the laws of war) do not matter—could well turn out to be a disaster.
Increased Corporate Domination of Politics
A fourth wave is the ongoing corporate takeover of the
In recent decades, however, the level of corporate domination of American politics has clearly increased. The pathways to intensified corporate control have been through the candidate selection process, campaign finance, massive lobbying, favorable media coverage to corporate ruling class linked candidates, expert advisers from ruling class think tanks and vote rigging through exclusion of people and through computers. Corporations claiming to be human beings can now purchase unlimited “free speech,” while real citizens are often denied such rights by their relative poverty, lack of access to media, or by police repression. Collectively, this has resulted in making the
The Democratic Party plays a key role in this legitimization of the system, especially this party’s more liberal wing, a main headquarter of this wing being the San Francisco Bay Area of California, the home area of Blum and Feinstein. They are key players in what can best be called the San Francisco Democratic Party political machine, a machine that has spawned corporate-connected political misleaders who hold or have held important state and federal offices, like Nancy Pelosi, Jerry Brown, Barbara Boxer, John Burton, Willie Brown, Gavin Newsom, and Kamala Harris. Capitalists like Blum and wealthy heirs like Gordon Getty are among the primary fundraisers for these politicians. Feinstein and Blum are the godmother and godfather of this group, standing at the center of this circle of power connecting these and other key crony capitalist Democratic Party officeholders. To cite just two examples, Feinstein conducted Brown’s wedding (to a former Vice President of the Gap) where the entire Bay Area political machine was present, and hosted a wedding shower for Newsom at her Pacific Heights mansion, illustrating her close personal, economic and political ties to key members of this group. The group obviously also has important national level connections, to cite but one example, former Vice President Al Gore is a long-time friend and business partner of Blum.
While pretending to represent the interests of the rank and file, once in office, Feinstein and other politicians pay off their partners with policies favorable to their interests, including government contracts. Senator Feinstein, who was already in October 1994 called “…the most prolific fund-raiser among all federal candidates” by the Los Angeles Times (October 28, 1994), has received large campaign donations (in the thousands) from a truly amazing list of top
A.G. Spanos Companies, ATT, Atlantic Richfield, Bank of America, Bankers Trust, Bayer, Bechtel, Bellsouth, Blue Diamond Growers, Blue Shield, BNSF Railroad, Boeing, British Petroleum, Calpine, Cargil, Charles Schwab, Chevron, Cisco Systems, Citigroup, Clear Channel, Clorox, Coca-Cola, Comcast, Edison International, Eli Lilly, Gap, Genentech, General Atomics, General Dynamics, General Electric, Goodrich, Hewlett Packard, Honeywell, Intel, ITT, JP Morgan Chase, Johnson and Johnson, Lockheed Martin, Matson Navigation, Met Life, Microsoft, National Association of Realtors, National Venture Capital Association, News America Holdings (Fox Political Action Committee), Northrop Grumman, Occidental Petroleum, Oracle, Pacific Life, Insurance, Parsons Brinckerhoff, Pfizer, PG&E, Pillsbury Winthrop Shaw, Pricewaterhouse Coopers, Qualcomm, Raytheon, Safeway, Sempra Energy, Sony Pictures, Tenet Healthcare, Time Warner, Travelers, Union Pacific, Unionbancal, United Airlines, UPS, Verizon, Viacom, Visa, Walmart, Walt Disney, Wells Fargo.
This list of donors has led to the assertion by close observers that Feinstein is the “best Senator that money can buy” and that her life and career has “always been about money” (Larry Bensky, East Bay Express, November 18, 1994). She was the daughter of a wealthy doctor, educated at elite private schools, including
In 2007 investigative reporter Peter Byrne published a series of reports that showed that her actions in the early 1990s were only the beginning of Feinstein’s aiding her husband’s firms. As chairperson of the Senate’s Military Construction appropriations subcommittee from 2001-2007, Feinstein supervised and supported the appropriation of over $1.5 billion for two military contractors, URS Corporation and Perini Corporation, both companies that Blum had a controlling interest in. Blum later sold URS for a reported personal profit of $57 million. When Feinstein’s actions were exposed in early 2007, she abruptly quit her post on this subcommittee, apparently recognizing that the ethical and legal issues involved could damage her politically. Unfortunately, the existing laws, combined with Feinstein-Blum’s political power, made a serious investigation and possible prosecution of such corruption impossible.
Blum returns the favor, raising more money for his politician wife than any other individual. He arranges contributions and loans to her campaigns in the millions, and in the 1994 campaign he stated that he was spending “26 of every 24 hours” to get his wife re-elected (Los Angeles Times, October 24, 1994). Sometimes this got the power couple into trouble, even with the weak campaign finance laws that exist. In Feinstein’s 1990 campaign for Governor for example, she failed to disclose a series of bank loans arranged by Blum that amounted to at least $2.9 million. Her campaign was fined a total of $190,000 by
As is the case on every other key question involving our collective future, Feinstein has been, and is, on the wrong side. In a 2011 editorial, the San Francisco Chronicle (May 26, 2011) called her “one of the biggest cheerleaders for renewing…” Bush’s PATRIOT Act. The Chronicle said that Feinstein and other supporters of renewal were going “too far” and were “erasing bedrock guarantees” of the Constitution. In 2007, she voted for immunity for telecommunications companies who illegally spied on their customers. Some of these companies, such as ATT, were also heavy donors to her political campaigns. As chairperson of the Senate Intelligence Committee, she also recently criticized the CIA for not spying enough on the Egyptian people, stating that, “the CIA should have monitored Facebook more closely.”
A Deepening Global Ecological Crisis
A final wave of our age is the ongoing and accelerating global ecological crisis. This crisis is deeply rooted in the anti-ecological imperatives of capitalist production and exchange for profit and accumulation. This is largely because the fundamental problem is the capitalist system itself and no corporate-funded politician or appointed official will risk his or her career to raise questions about and deal with fundamental causes. So, in order to assure everyone that the crisis is being handled in an appropriate way, a public relations show is put on by corporations and governments, pretending to face up to the moral and practical challenge of humans living in a sustainable way.
The political and economic activities of Blum and Feinstein routinely undercut ecological needs in favor of the accumulation of wealth and power. One example is Feinstein’s relationship to wealthy corporate farmer Stewart Resnick, the owner of over 100,000 acres of prime farmland in the
Blum and Feinstein also favor and work for “wilderness,” she in the Senate sponsoring legislation to set aside public lands as preserves, and he as a member of the Governing Council of the Wilderness Society. The nature and politics of Blum’s Wilderness Society can be seen by looking at its Governing Council and one of its “corporate partners.” The Governing Council is filled with the super-rich like Blum and includes a member of the Getty oil family, a member of the
Recently, under the pressure of direct action against it, the Bank of America cut back on—but did not end—such financing. The Blum- Feinstein-Wilderness Society approach of creating a few islands of non-development in a sea of life-destroying capitalist ecocide is clearly inadequate as a strategy of ecological and human survival. What is required is for us to envision what a rational, egalitarian, life-affirming economy and society would look like and struggle to bring that system into reality.
The five interrelated waves of our age, and Blum-Feinstein’s role, illustrate that the Democratic Party and its leaders are every bit against the people’s interest as the Republican Party. Both favor the corporate state and capitalist austerity, imperialism, war and capitalist ecoside. Blum-Feinstein stand solidly for the financialization of accumulation and the private use of this wealth to benefit a small group of wealthy owners (the 1 percent); they stand for neoliberal ideology; for imperialism, militarism and war; for undemocratic corporate political rule; and for weak and inadequate measures to confront the ecological crisis. Only the mass mobilization and direct action of the people can save the vast majority of us from the insatiable greed of a capitalist class and capitalist system as exemplified by the likes of Richard C. Blum and Dianne Feinstein.
Historian, author, and activist Laurence H. Shoup lives in