Money, Money, Money: It’s a Rich Man’s World


The big issue in the news as of now is whether or not the US will raise the debt celling or default on its debts. However, when I say the US, I mean all the people in Congress and the government. The citizens of the US, who this will probably affect the most, really have no say in what is decided. For as much as the US is touted as a place where everyone has a say in the government, that’s not exactly true. The average person has no say in what Congress decides to do over the debt crisis, or even over how long this shutdown will last. And if Congress can’t make up it’s mind by this Thursday, the Treasury has reported that it will run out of money to pay the bills. Which could cause the stock market to drop, restart the recession, and cause rates on loans to rise higher, among other things. All of which infringe on the individual’s freedom to be able to use their money how they like. The security of the market will be shot, all over something that citizens have no say in.

National debt has proven to be not only a headliner in the news, but has also become a matter of national security. Since the end of World War II, the United States has been serving as the hegemon. In our text, Introduction to International Political Economy, hegemonic stability theory states that “international markets work best when a hegemon (a single dominant state) accepts the costs associated with keeping them open for the benefit of both itself and its allies by providing them with certain international public goods at its own expense” (38). Although our country has been considered the hegemon for so long, that status has recently been threatened. Due to our extreme debt to China, they have more economic power over the US and may replace us as the hegemon. This poses a threat to our national security because it ultimately places China in control of our debt


Moody’s Investors Services, more commonly known as Moody’s, provides international financial research on bonds issued by commercial and government entities and, with Standard & Poor’s and Fitch Group, is considered one of the Big Three credit rating agencies. For the first time in its history, in 2011 the US was downgraded from a triple A rating, shocking and outraging the American government. It seems unreasonable that the hegemonic power of the globe could face any consequences from an outsider rating. And yet, these “opinion” based ratings, could mean serious damage to our economic security. In October 1995, the school district of Jefferson County, Colorado sued Moody’s, claiming the unsolicited assignment of a “negative outlook” to a 1993 bond issue was based on Jefferson County having selected S&P and Fitch to do its rating. Moody’s rating raised the issuing cost to Jefferson County by $769,000. Moody’s argued that its assessment was “opinion” and therefore constitutionally protected; the court agreed, and the decision was upheld on appeal. But without a good opinion from these agencies, even America could lose its good reputation, and face enormous damages in trade relations as investors pull out and countries find other nations to trade with.

Too Big to Fail is a book published in 2009 (later made into a movie in 2011) on the Wall Street financial crisis of 2008 starting with the collapse of Lehman Brothers (global financial services firm). In short the story highlights the problems and decisions the government and major finance corporations faced when the economy-as-we-know-it nearly collapsed. The causes of the crisis are too complicated to isolate, but they include Wall Street speculation, mortgage and short-term credit loaning, and financial shock and panic. Because our financial system in the United States depends so much on “trust,” if the general public withdraws their money in a hurry, the banks cannot function as they do and the system collapses. In Introduction to IPE, 6th Ed. by Ballam & Gillman, the Structuralist Perspective chapter says, “Once the working class believes that the system is legitimate, it will believe that it is appropriate and just.” This is what the whole economic system is based on: blind compliance and faith of the masses.

It is very easy to see this situation through the eyes of a Marxist. The richest and smallest portion of society (the bourgeoisie) controls the national security by keeping the proletariat in obedience. If the economy were to fail, the greater part of the population cannot get the food and resources they need to survive causing a revolution to overthrow that class and reinstate a more equal system of distribution. As it happened, the government interceded as much as it thought necessary (to honor economic liberalist ideals of limited government intervention, but still implement mercantilist practices to maintain the strength of the nation) to preserve the status quo. The government of the United States is not separate from the companies that run the economy because when the companies go under, the government rescues them in order to sustain the unequal system of proletariat exploitation. Investment through stocks and bonds into the government further support this rich-man control over the government, because only people with money to spare can invest in big corporations and government pursuits. The solution to the crisis as displayed in Too Big to Fail, movie, was to merge the companies and make them bigger. It seems the only direction our system of investment and competitive gain can take is one of further growth and entrapment. What power do we as individuals have on a monster controlled by money?


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