Crony Captialism Exposed, but What to Do about It?

Review of Thomas Frank's Pity the Billionaire

What makes bailouts toxic is cronyism, the coming together of government and private wealth, the spectacle of Washington doing special favors for its pals in the investment banks.

– Thomas Frank

The outstanding discovery of recent historical and anthropological research is that man’s economy, as a rule, is submerged in his social relationships.

– Karl Polanyi1

In What’s the Matter with Kansas?: How Conservatives Won the Heart of America, author Thomas Frank explored American “democracy” and working Americans puzzling proclivity to vote against their economic best interest, which meant voting for the Republican Party. Frank’s latest book, Pity the Billionaire: The Hard-Times Swindle and the Unlikely Comeback of the Right, segues into the question of how a malfunctioning system that screws the masses manages to perpetuate itself? And why do the masses allow themselves to be screwed by the system?

The economic system is capitalism, and the political system goes hand-in-hand with molly coddling capitalism – even to the extent of bailing it out with a reverse socialism. Here was the hypocritical spectacle of right-wingers who abjure government intervention (favoring instead the rule of the market) dipping into the government coffers to bail themselves out. Frank has a knack for prose; he takes what should be palpable for all and renders it in a highly readable and engrossing fashion. He clearly presents the bailout for the economic rip-off that it was — a rip-off of working people that transferred their hard-earned money to the idle elitist class.

Frank, obviously, is highly critical of neoliberalism and so-called democracy, but unclear is what he leans toward instead. Frank would like more socialism, but would he like socialism as the system? Just how far would he like to deviate from capitalism? As an alternative to the bailout, he mentions nationalization, but does not delve into the pros and cons of a wholesale nationalization. Why?

When the ship of the elitist financial class starts taking on water, why should the common people grab the bails and hand the helm back to the incompetent navigators? This financial shipwreck should have been followed by an unyielding harangue against capitalism, and it should have provided an opening for socialism. Instead, the Right rebounded, and Frank explores how and why.

One major reason why is that the establishment produces a monopoly-media manufactured consent based in the creation and maintenance of its necessary illusions.

Right-wing media “louts” like Glen Beck and Ann Coulter (personages that Frank calls “entrepreneurs of fear”) are given generous space in the monopoly media to vent their petulant bombast while rational arguments presented by thoughtful critics are marginalized or kept out. Thus disinformation and propaganda clogs information channels; the result is myth and lies presented as truth and reality.

Frank exposes much of this, for example, the myth of small business job creation. He skewers the illogic of Ayn Rand’s Atlas Shrugged, notes how conservatives have mimicked leftist characteristics, and provides “examples of conservatism’s dalliance with error.”

Frank quotes the bathos of George W. Bush: “I’ve abandoned free-market principles to save the free-market system.” Certainly it was not an abandonment of moral principles because the “free market” is without such. Nonetheless, how can one abandon the blatant contradiction of there being a “free market”?

Pity the Billionaire captures vignettes of the inversion and perversion of economic reality along with a lack of compassion by those wedded to neoliberalism. As typifying the entitled capitalist and comprador [coordinator] classes, Frank presents business reporter Rick Santelli. Santelli knows who he serves, and he turned his scorn upon the working class “losers”/victims, such as people who lost their homes to foreclosure. The message was: the system was not to blame for extending the loans; the borrowers solely were to blame for losing out.

The Tea Party movement is a collective example of misplaced wrath, but is the Tea Party wrath any more misplaced than the faith of Obama supporters? And who are these Tea Partiers — some of who, Frank tells, wear ascots?

Frank would like voters to steer clear of the Republican Party, but is the Democratic Party the preferred option? Frank fails to explore or create a space for a politics beyond the duopoly, who he well knows is entrenched in serving the interests of the elitist class.

This was a difficult review to write. Frank’s writing really engages the reader. His logic is compelling; however, at times his application of logic is lacking and leaves one feeling unsatisfied.

Consider the following scenario: If you, as a customer, walk into a store and purchase product A and find it highly unsatisfactory, will you buy product A again or buy product B? If after buying product B, and you find that it is also highly unsatisfactory, will you then return to buying product A or will you consider trying product C? Of course I am assuming that rational customers will look for a product which satisfies them. Is there any compelling reason (besides fear, which is not a reason but an emotion) as to why this same logic should not apply to political choices?

What is the Right is quite well understood. In the United States, the Republicans are the Right. However, what is the Left? What is progressivism? Is it the Democrats? Frank does not consider this; he is focused on the mind-set of conservatives who usually reside within the Republican Party.

Does daylight really fall between the duopoly of the Democrats and Republicans? On some social issues like abortion, gun control, and such, yes. However, on economic issues? Barack Obama has demonstrated (as did Bill Clinton before Obama) that neoliberalism is embraced by the political duopoly.

Frank has been highly critical of Obama’s performance as president; however, in a sense, Frank can be criticized as an enabler of Obama. Frank writes “Nothing has changed,” but one can’t help feeling that he fails to nail Obama on his lie of “Change we can believe in.” Readers of Pity the Billionaire can easily sense that voting Republican would be their undoing, but this sense of undoing does not come across as vitally in expression against the Democrats.

Since Pity the Billionaire fails to mention, for example, the Green Party, Ralph Nader, or another “third party” as an alternative to the political duopoly, one might argue that Frank surrenders to the folly of lesser evilism.2 The track record of the administrations of the last five US presidents — Ronald Reagan (Republican), George H.W. Bush (Republican), Bill Clinton (Democrat), George W. Bush (Republican), and Barack Obama — has shown no substantial deviation from the neoliberal agenda; if anything, the agenda has become further implemented. Given that the Democrats and Republicans are both implementing the agenda of the financial elitist class, and given that Frank criticizes both pro-corporate political parties and the corporate-dominated economic system, why then does he not mention turning away from the political duopoly?

Frank can describe in skilful prose the faults and cracks in the system and the contradictions of society. However, can the solution be had within the political duopoly? Pity the Billionaire was ostensibly not meant to provide solutions and neither was What’s the Matter with Kansas?. These two books come across as well-written lamentations, and should the political and economic systems perpetuate, then there is the opportunity for future lamentation.

Yet Frank knows that the system wasn’t always like this. He pointed to the wisdom of the Hungarian historian Karl Polanyi expressed in his opus, The Great Transformation, which cited communalism as a natural condition of humans and rejected self-regulating markets as unnatural. Nonetheless, the Republicans and the Democrats, as desired by big business and financial interests, have undone much of the New Deal regulatory mechanisms implemented by the administrations of Franklin D. Roosevelt. Given this, then how can either the Republicans or the Democrats be entrusted to look after the interest of the masses, the 99%?

If readers are looking for an insightful, piercing, and highly readable critique into the system that fails the masses in society, then Pity the Billionaire is highly recommended. If readers are looking for a promising alternative system, then they are better off reading – despite its very dense prose – Parecon: Life after Capitalism or — the easier to read — Realizing Hope: Life Beyond Capitalism.

  1. Karl Polanyi, The Great Transformation (Boston: Beacon Press, 1957): 46. []
  2. I have written several articles on the topic of lesser evilism, including: “The Lesser-of-Two Evils,” 19 April 2004; “An Unconscionable Outcome: Chomsky and the Hopelessness of Lesser Evilism,” Dissident Voice, 9-10 October 2004; “The Utter Futility of Lesser Evilism,” Dissident Voice, 24 May 2007; “Evilism: There Is No Lesser,” Dissident Voice, 29 July 2011; []

Kim Petersen is co-editor of Dissident Voice. He can be reached at: kim@dissidentvoice.org. Read other articles by Kim.