Moyers & Company - The Deep State Hiding in Plain Sight   View more episodes

Aired at 11:30 PM on Sunday, Feb 23, 2014 (2/23/2014)      View all transcripts from this day


00:00:10>>> This week on "moyers & company" longtime insider mike lofgren on what he calls the big story of our times -- the deep state.
00:00:19>> It is, I would say, the red thread that runs through the history of the last three decades.
00:00:26It's how we had deregulation, financialization of the economy, the wall street bust, the erosion of our civil liberties, and perpetual war.
00:00:37>> Announcer: Funding is provided by -- anne gumowitz, encouraging the renewal of democracy.
00:00:43Carnegie corporation of new york, celebrating 100 years of philanthropy, and committed to doing real and permanent good in the world.
00:00:50The ford foundation, working with visionaries on the front lines of social change worldwide.
00:00:56The herb alpert foundation, supporting organizations whose mission is to promote compassion and creativity in our society.
00:01:03The john d. and catherine t.
00:01:05Macarthur foundation, committed to building a more just, verdant, and peaceful world.
00:01:10More information at
00:01:16Park foundation, dedicated to heightening public awareness of critical issues.
00:01:18The kohlberg foundation.
00:01:19Barbara g. fleischman.
00:01:24And by our sole corporate sponsor, mutual of america, designing customized individual and group retirement products.
00:01:29That's why we're your retirement company.
00:01:34>> Welcome.
00:01:35You've read the espionage novels of john le carre, you know that no other writer today has so brilliantly evoked the subterranean workings of government, perhaps because he himself was once a british spy.
00:01:48Le carre has a name for that invisible labyrinth of power.
00:01:54" and now an american, you're about to meet in this broadcast has seized on that concept to describe the forces he says are controlling our government, no matter the party in power.
00:02:07But mike lofgren's no intelligence agent, although he had a top secret security clearance.
00:02:11He's a numbers man, a congressional staff member for 28 years with the powerful house and senate budget committees.
00:02:18Over the years, as he crunched those numbers, he realized they didn't add up.
00:02:23Instead, they led him to america's own deep state, where elected and unelected figures collude to protect and serve powerful vested interests.
00:02:33Mike lofgren was so disgusted, he not only left capitol hill, he left the republican party and wrote this book, "the party is how republicans went crazy, democrats became useless and the middle class got " now, at our request, and com, he has written "anatomy of the " you'll want to read it as soon as we finish this conversation.
00:02:56Mike lofgren, welcome.
00:03:00>> Good to be here again, bill.
00:03:01>> This is a difficult subject to talk about.
00:03:04It would be easier if it were a conspiracy you were describing, but that's not the case, is it?
00:03:13>> No.
00:03:13I'm not a conspiracy theorist.
00:03:17This is not some cabal that was hatched in the dark of night.
00:03:19This is something that hides in plain sight.
00:03:21It's something we know about, but we can't connect the dots, or most people don't connect the dots.
00:03:30It's kind of a natural evolution when so much money and political control is at stake in the most powerful country in the world.
00:03:37This has evolved over time.
00:03:41>> And you call it the real power in the country.
00:03:42>> Correct.
00:03:45It is a hybrid of corporate america and the national security state.
00:03:50Everyone knows what the military-industrial complex is, since eisenhower talked about it in his farewell address.
00:03:59>> We must guard against the acquisition of unwarranted influence whether sought or unsought by the military-industrial complex.
00:04:08The potential for the disastrous rise of misplaced power exists and will persist.
00:04:15We must never let the weight of this combination endanger our liberties or democratic processes.
00:04:22>> Everyone knows wall street and its depredations.
00:04:25Everyone knows how corporate america acts.
00:04:31They're both about the same thing.
00:04:34They're both about money, sucking as much money out of the country as they can.
00:04:37And they're about control, corporate control and political control.
00:04:44>> You said this, in your judgment, is the big story of our time.
00:04:48>> It is the big story of our time.
00:04:51It is, I would say, the red thread that runs through the history of the last three decades.
00:04:58It's how we had deregulation, financialization of the economy, the wall street bust, the erosion of our civil liberties, and perpetual war.
00:05:10>> You write that the "secret and unaccountable deep state floats freely above the gridlock between both ends of pennsylvania avenue is the paradox of american government " >> well, that's just the thing.
00:05:24The common narrative of the last five years, and on a superficial level it's right, is that government is broken.
00:05:31It's dysfunctional.
00:05:32It's gridlocked.
00:05:34Well, that's true.
00:05:41And that is the visible government, the constitutional government we learn about in civics 101.
00:05:43And it is gridlocked.
00:05:45But somehow, obama can go into libya.
00:05:48He can assassinate u.s.
00:05:51He can collect all our phone records without a buy or a leave from anyone.
00:05:58He can even bring down a jet carrying a president of a sovereign country without asking anyone's permission.
00:06:07And no one seems to connect the two, the failure of our visible constitutional state and this other government that operates according to no constitutional rules or any constraint by the governed.
00:06:24>> You go on to say, though, that it's not just the executive branch that is the heart of this, that it's just one of the several constituencies that make up what you call the deep state.
00:06:36>> Well, it's all the national security functions of the government.
00:06:39It's the pentagon.
00:06:40It's homeland security.
00:06:43It's the state department.
00:06:45It's also treasury because they have a kind of symbiotic relationship with wall street.
00:06:51>> For one thing, they control the flow of money.
00:06:54>> Absolutely.
00:06:56That's why there's such a flow not only of money, but of personnel between wall street and the treasury department.
00:07:04There's other aspects of government.
00:07:06There's a portion of the judiciary -- a small portion of the judiciary, the so-called foreign intelligence surveillance courts.
00:07:15Most of congress doesn't even know how they operate.
00:07:20>> Talk a little more about the nexus, the connection, between the national security state and wall street.
00:07:28Because this is a theme that runs through your essay.
00:07:31>> Do you know that about 30 blocks north of here there is a restaurant that will sell you a truffle for $95,000.
00:07:40Also in new york, christie's sold at auction a painting by francis bacon for $142 million.
00:07:52Now a parallel situation with the national security state.
00:07:597 billion to build a facility in utah that will collect one yottabyte of information.
00:08:12That's as much information as has ever been written in the history of the world.
00:08:20It costs $400 by the time the pentagon finishes paying contractors to haul one gallon of gasoline into afghanistan.
00:08:30That's a real extravagant amount of money.
00:08:33In both cases of the national security state and the corporate state, they are sucking money out of the economy.
00:08:42As our infrastructure collapses, we have a tinker toy power grid that goes out every time there's inclement weather.
00:08:52Tens of millions of people are on food stamps.
00:08:57We incarcerate more people than china, an authoritarian state with four times our population.
00:09:05Does anyone see the disparity between this extravagance for the deep state and the penury that is being forced on the rest of the country?
00:09:20That isn't a natural evolution.
00:09:22Something made it happen.
00:09:26We're having a situation where the deep state is essentially out of control, it's unconstrained.
00:09:35Since 9/11 we have built the equivalent of three pentagons around the dc metropolitan area, holding defense contractors, intelligence contractors, and government civilians involved in the military-industrial complex.
00:09:55There are over 400,000 contractors, private citizens, who have top-secret security clearances.
00:10:04>> And they are heart and soul of the deep state, as you describe it.
00:10:08>> Absolutely.
00:10:09>> They're being privatized.
00:10:13Which means the power shifts from accountable officials to unaccountable contractors.
00:10:18>> About 70 percent of the intelligence budget goes to contracts.
00:10:23>> How new is this?
00:10:26I mean, back in 2010, the "washington post" published a stunning investigation of what the editors called "top-secret " I mean, we have known about this, have we not?
00:10:38>> Yes, we know about this, but the intelligence functions of the government are too important to outsource in the manner we have.
00:10:52It's something where absolute discretion is needed and absolute trust that they are not violating civil liberties.
00:11:05And to put this kind of a burden, if you will, on private-contract employees is, i think, become a great disservice.
00:11:14>> You say that you came to question this.
00:11:17It took you a while.
00:11:19It was a gradual enlightenment that took place.
00:11:21You were dealing with big numbers and particular details in the budgets that all of these agencies were sending to you when you were on capitol hill, right?
00:11:28You were seeing the numbers?
00:11:29>> Absolutely.
00:11:36>> And you -- what was happening to the numbers?
00:11:39>> At the end of 2001 is -- we appropriated a lot of money and it didn't seem to be going to afghanistan, the approximate source of the 9/11 attacks.
00:11:48It seemed to be going to the persian gulf region.
00:11:52And I said, "what's going on here?
00:11:56Saddam hussein didn't bring down " so, the little light went on.
00:12:05And I began to sort of disenchant myself from the normal group think that tends to take over in any organization.
00:12:16>> Group think?
00:12:16At some point in your essay, you talk about how groupthink drives the deep state.
00:12:21>> It absolutely does, just as it tends to drive any bureaucratic organization.
00:12:29>> What do you mean by groupthink?
00:12:31>> Well, the psychologist irving janis called it groupthink.
00:12:36It's a kind of assimilation of the views of your superiors and your peers.
00:12:44It's becoming a yes man.
00:12:45And in many respects, it's an unconscious thing.
00:12:54>> Yeah, remember what upton sinclair once said "it's difficult to get a man to understand something when his salary depends on him not " >> that is certainly part of it.
00:13:03>> You describe washington as clearly and obviously the headquarters of the deep state.
00:13:05But talk about some of the others who are in the game.
00:13:08>> Wall street is, perhaps, the ultimate backstop to the whole operation.
00:13:14Because they generate so much money that they can provide second careers for a lot of the government operatives.
00:13:24They're going to make more money than they ever dreamed they would on wall street.
00:13:31And I think a good example of that is the most celebrated soldier of the last decade, david petraeus.
00:13:42What did he do when he retired?
00:13:43He went to kohlberg kravis roberts, a wall street buyout firm with $90 billion in assets under management.
00:13:51>> You describe him as a kind of avatar of the deep state.
00:13:54>> He is, in a way.
00:13:58Because he now represents both ends of it.
00:14:02We see now our present-day cincinnatus did not pick up the plow when he lay down the sword.
00:14:10>> Cincinnatus was the roman who left his farm to become a general in the war.
00:14:15When the war was over, he went back to be a farmer.
00:14:16That doesn't happen today.
00:14:18>> No, it doesn't.
00:14:21The vast majority of generals seem to end up on the boards of defense contractors.
00:14:26>> Talk a little bit about what you call this strange relationship between silicon valley and the government, and how it fits into the deep state.
00:14:36>> Well, the national security agency could not do what it does, the cia could not do what it does, without silicon valley.
00:14:52Now, silicon valley, unlike the defense contractors, mostly sells to private individuals and to companies.
00:15:01It's not a big government vendor.
00:15:04However, its services are necessary.
00:15:06And de facto, they have become a part of the nsa's operations.
00:15:12I'm sure the ceo's of some of these companies try to obscure the fact that this has mostly been voluntary for many years.
00:15:18>> You mean the surveillance?
00:15:19>> The sueillance.
00:15:21>> The gathering of information f unowing citize.
00:15:24>> Absolutely.
00:15:25>> For commercial purposes, though.
00:15:29>> Precisely.
00:15:30They've done it themselves and they've assisted the nsa through a fisa court order.
00:15:38>> Foreign intelligence -- >> foreign intelligence surveillance act.
00:15:41So, this has been going on for quite a while.
00:15:46Yet now, like inspector renault, they are "shocked, shocked" to find out.
00:15:50But I think their main shock is that they're now starting to lose market share in foreign countries.
00:15:58>> These moguls, as you call them, pass themselves off as libertarians.
00:16:02>> Oh, they do.
00:16:04They make a big pretense about being libertarians and believing in the rugged individualism and so forth.
00:16:13But they've been every bit as intrusive as the nsa has been, in terms of collecting your data for commercial purposes, rather than so-called national security purposes.
00:16:28But they're in it just as heavily as the nsa is.
00:16:33And they somehow manage to get the intellectual property laws rigged so that you are theoretically subject to a fine of up to $500,000 for jail breaking your phone.
00:16:46>> Which means?
00:16:48>> Which means if you don't like the carrier on the manufacturer dictates you shall have and you change it without authorization, you don't have the right to something you bought.
00:17:05>> Could this symbiotic and actual relationship between silicon valley and the government reflecting the deep state, explain the indulgence washington has shown silicon valley on matters of intellectual property?
00:17:18>> Absolutely.
00:17:22People no longer necessarily own their property that they buy if they're buying it from silicon valley.
00:17:29They simply have a kind of lease on it.
00:17:33>> If, as you write, the ideology of the deep state is not democrat or republican, not left or right, what is it?
00:17:44>> It's an ideology.
00:17:46I just don't think we've named it.
00:17:49It's a kind of corporatism.
00:17:53Now, the actors in this drama tend to steer clear of social issues.
00:17:58They pretend to be merrily neutral servants of the state, giving the best advice possible on national security or financial matters.
00:18:10But they hold a very deep ideology of the washington consensus at home, which is deregulation, outsourcing, de-industrialization and financialization.
00:18:24And they believe in american exceptionalism abroad, which is boots on the ground everywhere, it's our right to meddle everywhere in the world.
00:18:35And the result of that is perpetual war.
00:18:40>> And you say it is shadowy and more ill-defined.
00:18:48More ill-defined than what?
00:18:50>> It's more ill-defined than simply saying wall street or saying the military-industrial complex, or saying silicon valley, or the corporations.
00:19:02It's a symbiosis of all of the above.
00:19:05>> Here's your summing-up quote -- "as long as appropriations bills get passed on time, promotion lists get confirmed, black or secret budgets get rubber stamped, special tax subsidies for certain corporations are approved without controversy, as long as too many awkward questions are not asked, the gears of the hybrid state will " is that the ideology?
00:19:33>> That is a government within a government that operates off the visible government and operates off the taxpayers.
00:19:43But it doesn't seem to be constrained in a constitutional sense by the government.
00:19:55>> Is there a solution to the way the system works now?
00:19:57>> I think we're starting to see some discord in the ideology of the factions that make up the deep state.
00:20:07We're seeing silicon valley jump ship.
00:20:10They are starting to protest against the nsa.
00:20:14We're seeing the tea party bailing out against the deep state.
00:20:22They may be wrong on many economic issues.
00:20:24But I don't think they're necessarily wrong on this one.
00:20:28>> So the public could be growing wise?
00:20:31>> I think they are.
00:20:34There's a much more vivid debate going on in the country about surveillance ever since the revelations by edward snowden.
00:20:42>> Mike lofgren, thank you very much for being with me.
00:20:46>> It's good to be here, bill.
00:21:00>> Thanks to the journalist lee fang, we have another revelation into how the deep state enterprise works.
00:21:06Writing for the republic report, a non-partisan, non-profit that investigates money in politics, he takes up that controversial trade deal called the trans-pacific partnership that president obama is trying to push through congress with minimum debate and no amendments.
00:21:22Controversial because some of its provisions reportedly enable corporate power to trump representative government, even go around domestic courts and local laws.
00:21:33One is said to prevent governments from enacting safeguards against another bank crisis, another to empower corporations to sue governments for compensation if, say, environmental protons, or regulations on tobacco and drugs interfered with future profits.
00:21:50Because of the secrecy we don't know everything that's in the draft agreement.
00:21:55Senator elizabeth warren calls it "a chance for these banks to get something done quietly out of sight that they could not accomplish in a public place with the cameras rolling and the " which brings us to two officials chosen by president obama to lead those trade negotiations.
00:22:12Lee fang reports that they received multi-million dollar bonuses as they left giant financial firms to join the government.
00:22:21Bank of america gave this man, stefan seelig, more than $9 million in bonus pay as he was nominated to become the undersecretary of commerce for international trade.
00:22:33And this man, michael froman, got over $4 million when he left citigroup to become the current u.s. trade representative.
00:22:41Now, both are no doubt honorable men -- they are all honorable men -- but when push comes to shove, and the financial interests of huge corporations are on the table, we can only hope they will act as independent men, not faithful servants of the deep state.
00:22:57But given the secrecy, we may never know.
00:23:01According to fang, many large corporations with a strong incentive to influence public policy give executives bonuses and other incentive pay if they take jobs within the government.
00:23:13Among them; goldman sachs, morgan stanley, jp morgan chase, the blackstone group, fannie mae, northern trust.
00:23:21Citigroup even provides an executive contract that awards additional retirement pay upon leaving to take a "full time high-level position with the government or regulatory " I'm not making this up.
00:23:37You get a bigger incentive if you leave wall street to go regulate wall street.
00:23:45So it is the fox is groomed for the chicken coop, and the deep state grows fat on its prey.
00:24:05>> Coming up on moyers & company, a powerful new book breaks the code of "dog whistle " >> dog whistle politics doesn't come out of animus at all.
00:24:13It doesn't come out of some desire to hurt minorities.
00:24:16It comes out of a desire to win votes.
00:24:19And in that sense, I want to start using the term strategic racism.
00:24:24It's racism as a strategy.
00:24:26It's cold, it's calculating, it's considered, it's the decision to achieve one's own ends, here winning votes, by stirring racial animosity.
00:24:36And here's a hard, difficult truth.
00:24:40Most racists are good people.
00:24:42They're not sick.
00:24:45They're not ruled by anger or raw emotion or hatred.
00:24:51They are complicated people reared in complicated societies.
00:24:54They're fully capable of generosity, of empathy, of real kindness.
00:24:59But because of the idea systems in which they're reared, they're also capable of dehumanizing others and occasionally of brutal violence.
00:25:09>> At our website, com, remember to read the complete text of mike lofgren's essay, "anatomy of the deep state," and then tell us what you think.
00:25:17I'll see you there and I'll see you here, next time.
00:25:37>> don't wait a week to get more " com for exclusive blogs, essays and video features.
00:25:54>> Announcer: Funding is provided by -- anne gumowitz, encouraging the renewal of democracy.
00:25:58Carnegie corporation of new york, celebrating 100 years of philanthropy, and committed to doing real and permanent good in the world.
00:26:06The ford foundation, working with visionaries on the front lines of social change worldwide.
00:26:11The herb alpert foundation, supporting organizations whose mission is to promote compassion and creativity in our society.
00:26:18The john d. and catherine t.
00:26:20Macarthur foundation, committed to building a more just, verdant, and peaceful world.
00:26:25More information at
00:26:28Park foundation, dedicated to heightening public awareness of critical issues.
00:26:33The kohlberg foundation.
00:26:35Barbara g. fleischman.
00:26:37And by our sole corporate sponsor, mutual of america, designing customized individual and group retirement products.
00:26:44That's why we're your retirement company.