Diatribes of Jay

This is a blog of essays on public policy. It shuns ideology and applies facts, logic and math to economic, social and political problems. It has a subject-matter index, a list of recent posts, and permalinks at the ends of posts. Comments are moderated and may take time to appear. Note: Profile updated 4/7/12

03 February 2017

Who is Steve Bannon?

[For a note on what the Exclusion-Order fiasco says about Trump’s competence, click here. For some popular recent posts, click on the links below:
    “In Britain, what’s not permitted is prohibited. In America, what’s not prohibited is permitted. In France, everything is permitted. In Russia, nothing is permitted.” — Pre-Cold-War political joke
Hijacked capitalism
Mammon beating morality
The people, swindled
The “existential” jihadist threat


Breitbart.com and Goldman Sachs alumnus Steve Bannon has a crucial White House role. As President Trump recently announced, Bannon will sit in on every National Security Council meeting as a matter of course. The Chairman of the Joint Chiefs and the Director of National Intelligence no longer will, although they may sit in particular meetings at the President’s bidding.

Thus Bannon, who (like Trump) had no experience in political office or public service whatsoever, will replace the decades of experience and savvy of two or our top military and intelligence professionals. He will play a more important role in crucial war-and-peace decision-making than the Chairman of the Joint Chiefs and the Director of National Intelligence.

This raises two questions: how did this happen, and who is Steve Bannon?

The “how” is pretty simple. It goes back to the old political joke in our subtitle: “In America, what’s not prohibited is permitted.”

No law precludes a new president from bringing people he trusts and admires with him into the White House. The practice has a long tradition. Jimmy Carter had Bert Lance, who caused him a lot of trouble. Barack Obama had Valerie Jarrett, who by all accounts served him and our people well, anonymously and quietly.

Most presidents feel they need close advisors who are loyal only to them, and who have no separate constituencies to distract them. Apparently, no law prohibits presidents from letting such informal advisers sit in any meetings they choose, as long as the advisors have proper security clearances.

Informal advisers need no Senate approval because they occupy no “official” position. Besides security clearances, the only delicate question they raise is pay.

Bannon is a rich man; he doesn’t need pay. And even if he did, there’s plenty of private political money sloshing around to pay him. After a presidential campaign that cost about a billion dollars (on all sides) , there’s probably enough money in GOP coffers to keep even a Goldman Sachs alumnus from feeling deprived.

So that’s the “how.” American laws and traditions allow a president to bring in personal advisers outside the usual chain of command. The “who” is much less clear and much more important.

But before we get to Bannon, we must see Trump a little more clearly. He’s nearly unique among presidents in one respect: a lack of ideology. He used to be a Democrat; now’s he’s a Republican. His opposition to abortion is hardly heartfelt, for he’s a sophisticated New Yorker. (One reason for his picking Mike Pence as Veep was Pence’s extremism on abortion and consequent credibility with the “don’t kill babies” crowd.)

Trump’s ideological void goes far beyond abortion. He’s broken dramatically with party orthodoxy on trade, globalization, NATO, economic inequality, enmity to Russia, war in general, and deficits.

Trump is far more a practical man than an ideologue. His famous ghostwritten book, The Art of the Deal, was all about process, not substance. He changes his approaches and his views frequently, as befits a man with no overarching theory who just wants to get things done. His strongest beliefs are in the injustices the “system” has done to working people, and in himself. Narcissism is a personality disorder, not an ideology.

Bannon is quite different. He is all ideology, all theory. His only real-world experience (besides Goldman Sachs) is in online propaganda: the elaboration and inculcation of ideology. If Trump turns into America’s Hitler, Bannon will be his Goebbels—chief ideologist and chief propagandist.

So who is this guy? He’s easy to dislike and easy to caricature. In a world where every powerful male but Trump seems to work out for health and fitness, Bannon is fat and out of shape. With his three-day growth of beard and his random wardrobe, he’s also slovenly. This makes him look even uglier than he would be if he cared about his personal appearance.

Bannon’s slovenliness extends to his speech. He’s far more intelligent and curious than Dubya. But his words spew out in a mighty stream of consciousness, oblivious to the rules of grammar and syntax. He sounds like a guy whose fevered brain pumps out far more words than his mouth or Reason can handle. If he weren’t an American, you would think he was a character from Dostoyevsky’s fiction. Maybe that’s why he likes Russia.

Yet Bannon does have a strong ideology. In some ways, it’s as fuzzy and slovenly as his personal appearance. But it’s there. Its key elements are clear, and none of it has much directly to do with White Supremacy or racism.

So far, none of our “mainstream” media have picked up on Bannon’s ideology. But the outlines are patent in an oral manifesto that Bannon made online to a Vatican conference in 2014. That was long before Trump announced as a candidate, and even longer before Trump “discovered” Bannon.

As far as I can tell from following the news, this manifesto tells who Bannon really is. It’s long, and it’s often rambling, perhaps because it was oral. But every pol and every citizen who cares about this country should sit down and read its transcription, quietly and carefully, in full.

At the end, Bannon answers several online interactive questions from people at the Vatican conference. If you want to get the story from the horse’s mouth, and not from lazy reporters, ridiculously oversimplified Tweets, or people with axes to grind, this is the place to do it.

Hijacked capitalism

Bannon’s manifesto has four main themes. The first is the hijacking of capitalism.

Not surprisingly, the Goldman Sachs alumnus believes fervently in capitalism. But his views are far more nuanced and penetrating than those of most bankers. Most of them are far too preoccupied with accumulating obscene piles of cash to think deeply about anything else.

Bannon recognizes the power of capitalism to innovate, to organize industry and commerce, and to lift people out of poverty. But he thinks it’s been hijacked. Once we had the kind of capitalism that built the steel mills and the railroads. Once capitalism rolled out telephones, electricity, radio, TV, aircraft, airlines, computers and the Internet, nationwide and worldwide, in mere decades. Bannon calls this kind of capitalism “entrepreneurial” capitalism.

This good kind of capitalism, he believes, has been hijacked by another, reactionary kind, which he calls “corporatist” capitalism. This bad kind involves monstrous, powerful, incumbent firms working together with governments to crush rivals and new ideas, to subjugate the people, and to preserve and increase their own secular and economic power. The entrepreneurial capitalism of our past, he says, has capitulated to the cruel, empire-building capitalism of our present and maybe our future. And the worst empire-builders are bankers, including those at Goldman Sachs.

Bannon might as well have called this twisted capitalism “statist” capitalism. For his strongest example of “bad” capitalism was our own bank bailouts after the Crash of 2008.

Here’s what he said about them:
“[T]hink about it — not one criminal charge has ever been brought to any bank executive associated with 2008 crisis. And in fact, it gets worse. No bonuses and none of their equity was taken. So part of the prime drivers of the wealth that they took in the 15 years leading up to the crisis was not hit at all, and I think that’s one of the fuels of this populist revolt that we’re seeing as the tea party. So I think there are many, many measures, particularly about getting the banks on better footing, making them address all the liquid assets they have. I think you need a real clean-up of the banks’ balance sheets.”

In addition, I think you really need to go back and make banks do what they do: Commercial banks lend money, and investment banks invest in entrepreneurs . . . . [So we need ] to get away from this trading — you know, the hedge fund securitization, which they’ve all become basically trading operations and securitizations and not put capital back and really grow businesses and to grow the economy. . . . [T]he underpinning of this populist revolt is the financial crisis of 2008. That revolt, the way that it was dealt with, the way that the people who ran the banks and ran the hedge funds have never really been held accountable for what they did, has fueled much of the anger in the tea party movement in the United States.”
Bernie said much the same thing, didn’t he? He said it more punchily, more grammatically and more effectively. But isn’t it the very same message?

Yet Bannon seems to understand something that Bernie did not. Like democracy itself, capitalism is imperfect, frustrating and sometimes exasperating. But it’s the best system for organizing productive economic activity that our species has yet discovered.

Anyway, we Yanks love it, whole hog, and we are not going to abandon it anytime soon. Had Bernie understood these points, had he downplayed his “socialism” and plutocrat bashing and spoken of reforming capitalism and making it work better, he might be sitting in Trump’s chair today.

However rough his expression, Bannon appears to understand this key point. Reform can only come from capitalists themselves, perhaps with a hard push from government. But attacking the entire system is as futile as the GOP’s attempt to “repeal” Obamacare.

When a system works, however imperfectly, you don’t ditch it; you make it work better. Among many other reasons, doing that and saying that scares fewer people and attracts more cooperation.

Mammon beating morality

The second theme of Bannon’s “Vatican manifesto” was surprising, at least to me. The “mainstream” media have continuously painted him as a closet racist and white supremacist ready to start a race war or to fill concentration camps with black and brown people.

Yet the second most dominant theme of Bannon’s manifesto was a moral one. He repeatedly referred to “Judeo-Christian” traditions and values and to modern capitalism’s apparent abandonment of them.

He cited two manifestations of this trend. The first was state-sponsored authoritarian capitalism. Here’s how he described it:
“[T]hat’s the capitalism you see in China and Russia. I believe it’s what Holy Father [Pope Francis] has seen for most of his life in places like Argentina, where you have this kind of crony capitalism of people that are involved with these military powers-that-be in the government, and it forms a brutal form of capitalism that is really about creating wealth and creating value for a very small subset of people. And it doesn’t spread the tremendous value creation throughout broader distribution patterns that were seen really in the 20th century.”
The second manifestation of amorality that Bannon mentioned blew me away. In a few short sentences, he skewered and demolished the extreme Ayn-Randish capitalism that is so popular today among the libertarian right. Here’s what he said:
“The second form of capitalism that I feel is almost as disturbing, is what I call the Ayn Rand or the Objectivist School of libertarian capitalism. . . . [T]hat form of capitalism is quite different when you really look at it to what I call the ‘enlightened capitalism’ of the Judeo-Christian West. It is a capitalism that really looks to make people commodities, and to objectify people, and to use them almost — as many of the precepts of Marx . . . .”
It’s unfortunate that Bannon’s speech was scattered to the point of being inarticulate. But if you clean it up and polish it, it reflects great light.

The entire movement toward exploiting cheap labor in developing countries was a process of objectifying and commoditizing workers and their labor. Not coincidentally, it made the people who managed it obscenely wealthy—a result they justified as promoting “economic efficiency.” The end result was to leave millions of workers in America and other developed democracies bereft of good jobs with good pay and self-respect, and often bereft of towns, homes and families.

Hence the Tea Party and the so-called “populist rebellion.” You treat people like things and ruin their lives, and they’re not going to like you or your politics. No matter how cleverly you soft-pedal their condition—no matter how smoothly and diplomatically you speak—they are going to reject you. However dimly, Trump understood this point better than Hillary, and perhaps better than Bernie, and so he is president.

The trick is not to value Chinese and Mexican peasants over American workers, or vice versa. The trick is to recognize that all are people, not things. None of them is an apparatus to be used to advance some abstract economic theory, or to enrich the elite. They are people worthy of treatment as such. Jesus would have understood.

So the trick now is not to bash the Chinese or the Mexicans, as Trump seems to want to do. It’s not to push the balance to the other extreme. It’s to restore the balance by treating our own workers as people and countrymen, not inanimate factors of production, and by making sure the next wave of innovative American factories employs them first and foremost. It’s to see them as people worthy of fair and caring treatment, if only as voters.

Bannon’s manifesto did not complete this chain of reasoning. But he took the first steps back onto the right path, a road from which modern global capitalism has self-evidenly strayed, just as it has strayed from Judeo-Christian values and simple humanity.

The people, swindled

Bannon’s third theme is mostly a corollary of his first two. He doesn’t explicitly call it out separately, but it’s there.

It’s there in his take on how our economy crashed in 2008. Banks’ risk leverage, he claims, increased from 8:1 to 35:1 before the Crash—a change he blames on Goldman Sachs’ then-CEO Hank Paulson, who later became Dubya’s Treasury Secretary. “That made the banks not really investment banks, but made them hedge funds — and highly susceptible to changes in liquidity.”

In Bannon’s view, the bailouts were not really necessary and swindled the middle class. Here’s what he said on that topic, in answer to a question:
“For Christians, and particularly for those who believe in the underpinnings of the Judeo-Christian West, I don’t believe that we should have a bailout. I think the bailouts in 2008 were wrong. And I think, you look in hindsight, it was a lot of misinformation that was presented about the bailouts of the banks in the West.

. . . Middle-class taxpayers, people that are working-class people, right, people making incomes under $50,000 and $60,000, it was the burden of those taxpayers, right, that bailed out the elites. And let’s think about it for a second. Here’s how capitalism metastasized, is that all the burdens put on the working-class people who get none of the upside. All of the upside goes to the crony capitalists.”
I won’t dwell on this point because I’ve discussed it in detail in several previous posts. (For the most recent, with links to the others, click here.) Suffice it to say that Bannon and I apparently agree entirely on three points: (1) the bailouts were a betrayal of capitalism and the middle class; (2) there were reasonable alternatives that should have been tried first; and (3) the resultant betrayal of real capitalism, the middle class, and American workers is the unconscious source of the lion’s share of the anger that ultimately elected Trump.

Being swindled is not something you soon forget. I’m still angry about the bailouts, even though my prescient feeling that everything was going south led me to sell my portfolio in late 2007 and allowed me to profit on the way back up. Imagine how much angrier people who’ve lost everything must feel!

Bannon is far ahead of most American pols in understanding the breadth, depth and durability of this anger. What he and his master Trump plan to do about it is still unclear.

The “existential” jihadist threat

So far, there is little in Bannon’s Vatican manifesto with which Bernie supporters or progressives generally (including me) would quarrel. Where he goes astray is on his last point.

Bannon wholeheartedly swallows the “clash of civilizations” theory of jihadism and terrorism. He believes they are existential threats not only to the United States, but to Christianity and Western Civilization. He seems to believe that we can, and must, nip this threat in the bud. He consequently all but calls for a new Crusade.

Three things underline the importance of this theme to Bannon. First, he expresses it in uniquely sweeping and apocalyptic terms. Second, he repeats it over and over again. Third, it arises in his rather short initial remarks, whereas other themes best appear in his answers to questions from participants at the Vatican conference.

Here is one of many sweeping passages in which Bannon reveals this theme:
”[W]e’re at the very beginning stages of a very brutal and bloody conflict, of which if the people in this room, the people in the church, do not bind together and really form what I feel is an aspect of the church militant, to really be able to not just stand with our beliefs, but to fight for our beliefs against this new barbarity that’s starting, that will completely eradicate everything that we’ve been bequeathed over the last 2,000, 2,500 years.”
Bannon’s manifesto paints him as a rather timid, introverted intellectual appalled (like most of us) at Al Qaeda’s and the Islamic State’s brutality. Apparently his timidity and fertile imagination allow him—maybe compel him—to put himself in the places of the many Christians displaced or brutally murdered for nothing more than their beliefs or their ethnicity.

But his take on jihadism is simply wrong—wrong to the point of paranoia. Islamic terrorism and jihadism are serious problems. Terrorism has the potential to kill each of us individually, although with minuscule probability. Jihadism has the potential to turn undeveloped and neglected places into war-torn hell-holes like Somalia, Syria, and Boko Haram’s part of Nigeria. But it’s no existential threat to the United States, the EU, or the West.

There are so many reasons why, it’s hard to enumerate them. Here are three. First, the jihadists have no nuclear weapons. We have many. If it came to that, and if we wished to ignore the massive and morally repugnant “collateral damage” it would entail, we could launch a surprise nuclear strike from a single submarine. With it, we could wipe out the entire Islamic State, including all of its currently occupied territory, in less than half an hour. And no major power, least of all Russia or China, would seriously object.

Second, the jihadists and terrorists have nothing like modern Western armies, let alone military-industrial complexes to support and supply them. They subsist only because we in the West are tired of war. We took too few troops to occupy and lock down Iraq, and we sent even fewer to Afghanistan. If we took as many troops (half a million) as Colin Powell did to win Gulf I in two months, we could lock down both Iraq and Syria and kill every jihadi there in less time than that, if we had no regard for “collateral damage.”

The problem is not a matter of strength or capability. It’s a matter of the lack of necessity, our reluctance to kill innocents, and our consequent lack of will. We don’t do it simply because the smartest among us don’t believe it’s worth the risk of sacrifice or killing of innocents.

Third, the overwhelming majority of the 1.6 billion Muslims worldwide want no part of terrorism or jihadism. Like human beings everywhere, they don’t want it where they live. They certainly don’t want a world war with the West, which (due to technology and organization) they would almost certainly lose, but which would stain human history forever.

In 2007, I wrote a post lauding Barack Obama (as candidate) for recognizing Al Qaeda as our then worst enemy. But “worst enemy” is not the same as “existential threat.” Then as now, the only human force on Earth capable of becoming an existential treat to us is Russia, due to its world-destroying arsenal of nuclear weapons.

In fact, outside of the Middle East and Africa, our species is living in a relatively peaceful time. We have not had a war between major powers fighting on each others’ territory since 1945. Outside those regions, the Pax Americana still prevails.

What makes us all afraid is the power of modern media to bring every atrocity into our living rooms. So it’s not surprising that Bannon, a media maven, has fallen into the very same trap as his audience. Terrorism and jihadism horrify us precisely because most of the world has put that sort of barbarism behind it. But horror is an emotion. It’s not a realistic assessment, let alone a plan.

Bin Laden is dead. Al Qaeda is decimated, by our drones and ninjas and foreign troops advised by us. Since Bannon spoke his “Vatican manifesto,” much the same has befallen IS, which already has lost most of its territory. It’s about to lose Mosul.

So Al Qaeda and IS are already in retreat. The West is just beginning to come to terms with their use of the Internet to wreak havoc. Do you really think that the nation and the minds that invented the Internet cannot find ways to stop its being used to incite and assist atrocities?

Although fear-provoking, terrorism and jihadism are a long way from Armageddon. Just as it would have been stupid to start a war with Iran to avoid a war, so it would be stupid to start Armageddon to avoid it.

The world doesn’t need a new Crusade in the Twenty-First century. Bannon’s implicit call for one may be a fearful overreaction of a timid and immature mind. Or it may be a tool of propaganda that has no place in a democracy.


To judge from Bannon’s “Vatican manifesto,” he could be a good economic influence on Trump. He understands how banks and governments undermined capitalism, betrayed our middle class, and made our economy weak. He could be a fine influence on other Goldman Sachs alumni, such as Steve Mnuchin at Treasury or Gary Cohn as Director of the National Economic Council.

But Trump didn’t put him in these places, where his experience and point of view might do some good. Trump put him on the NSC, where his extreme views on military and foreign affairs, in which he has no experience, could motivate huge blunders.

Yet things might get even worse. Bannon’s chief real-life experience is with banking and finance. Only recently has he acquired a new avocation: media and propaganda. Apparently, that’s why Trump fell in love with him and put him in the White House.

Bannon’s experience with propaganda could work in two ways. First, he might find clever ways to neutralize IS’ propaganda and create effective counter-propaganda. That’s all to the good.

But Bannon also could help Trump turn the myth of an existential threat and the struggle against jihadism and terrorism into a massive “reality show.” Then Trump might use that show to justify and distract the public’s attention from internal and external despotism.

We should never forget that Hitler rose to absolute power on the lie that innocent Jewish bankers and merchants were destroying Germany from within. That lie not only produced the most bloody war in human history. It also produced the Holocaust and other grave atrocities.

Bannon’s skill with media and his penchant for exaggeration in foreign affairs have the potential to do something similar for Trump. At this early stage, we still don’t know how Trump (and General Flynn) will use Bannon’s skills.

If they use them to build public support for a more vigorous campaign to extinguish IS with drones, ninjas and foreign troops under American advisors, no harm, no foul. But our media, the public and our pols must be especially vigilant to be sure that Trump and Bannon do not, like many past tyrants, use fabricated paranoia to justify or hide a rush to despotism.

Footnote: Bannon makes a special point of recounting:
“[IS’ fighters] have driven 50,000 Christians out of a town near the Kurdish border. We have video that we’re putting up later today on Breitbart where they’ve took 50 hostages and thrown them off a cliff in Iraq.”
Endnote: For two reasons, I’ve reproduced all quotations from the transcript of Bannon’s “Vatican manifesto” verbatim, without changes or [sic]’s. First, Bannon’s stream-of-consciousness speaking style is sometimes hard to interpret precisely, and I want every reader to judge for himself or herself. Second, the quotes illustrate how much Bannon’s rambling style inhibits understanding his ideas. Maybe Trump should assign a “translator” to walk around with him and tell people what he means. I believe that my many years of trying to decipher hastily written student exams give me special skill in that regard.



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