If there is one fundamental problem with the West and its economies and politics, it is the sheer power and influence that "finance capital", comprised of banking corporations and financial institutions, wield over entire governments, political systems, politicians, elections and major decisions that shape the fate of the West and thus much of the world.
The sheer power and insidious influence that "finance capital" has come to wield in the West have contributed a lot to the economic problems that these countries are facing today. It has also contributed to the problem of the weakening of democratic institutions and spirit in these countries - a problem that has been ongoing for more than two decades.
Perhaps, the full extent of the influence and power of "finance capital" in the West was on display during and after the financial crisis of 2008-09 that brought the economies of the U.S. and much of the West to the brink of a catastrophic collapse.
During years and decades before the crisis, powerful banks and financial institutions had effectively developed, strengthened and maintained a grip over the political system, political parties and individual politicians by way of generous corporate campaign contributions and donation of vast sums of money to politicians and political parties.
People and insiders from the financial industry are routinely appointed to high-ranking positions within these governments. In the U.S., for example, the two major political parties, the Republican and the Democratic parties and their individual politicians receive a substantial portion of their funding from banking corporations and financial institutions.
The U.S. president Barack Obama, for example, relied heavily on financial donations and funding from banking companies and financial institutions, such as the Goldman Sachs to fund his presidential campaign.
As is the case with many other politicians, once elected to the public office, Barack Obama had to keep in mind the generous financial contributions of his friends and benefactors in the Wall Street. This fact contributed, among other reasons and factors, to the free pass that banking companies and financial institutions had in the aftermath of the crisis.
As the crisis broke out, these financial corporations managed to persuade the government to bail them out using public money while the common people were left alone to fend for themselves in the face of disaster and bankruptcy - common people who were losing their homes and futures and suffering partly as a result of these institutions' wrong decisions and predatory practices during the pre-crisis days and years when everything was fine.
Some commentators have called what has been going on as being socialism for the rich and powerful and capitalism for the ordinary people, the poor and the unconnected. This characterization rings true after witnessing what has been happening across Europe and North America in recent years.
In the U.S., the political system and the administration of President Obama have been unable to take effective steps towards reforming the financial system and scaling down the extent of power and influence that the financial industry has inside the corridors of power in Washington.
People in the government who are responsible for policy-making on these crucial fronts are former - or future - CEOs and managers of the same banking corporations and financial institutions who they oversee and regulate.
In other words, the power and influence that the "finance capital" wields in the corridors of power in Washington is so extensive that even high-ranking government officials are hand-picked by the same banking and financial institutions such as the Goldman Sachs and President Obama - helpless as he finds himself - confirms the appointments. The U.S. Treasury Secretary, Tim Geithner, former Treasury Secretary and Henry Paulson, as top-ranking policy-makers, are all former officials at prominent financial institutions.
The crisis in Europe
What is going on in Europe these days is yet another testimony to the sheer power and influence of "finance capital" and how major banks and financial corporations dictate the terms and conditions and force them upon governments, countries and societies.
The democratic tradition in the West is, no doubt, strong. The democratic mechanisms of governance and systems of checks and balances to prevent abuse and concentration of power are also strong. However, even this strong democratic tradition and robust democratic systems have been unable and ineffective in checking and preventing the excessive concentration of power in the "finance capital" and the banking and financial institutions that wield this power.
What is happening in Europe today is partly what is called a market run on such countries as Italy that despite having strong finances in terms of low budget deficits cannot procure funds and borrow at favorable rates. Markets determine the rates and prices at which countries can borrow; However, markets are being extensively subjected to manipulation by a number of banking and financial institutions, mainly from the Wall Street, and other hedge funds that have a large say in determining the market fluctuations and rates.
These groups of financial institutions and powerful hedge funds are, unfortunately, taking entire governments and nations hostage by the power of market manipulation that they posses; their wishes cannot be resisted by governments and neither by their regulators. A few days ago, the financially- strong German government, for the first time in many years, failed to sell almost 40% of its 10-year bonds that it had for sale.
It was clear that it was a punitive measure by these financial institutions that control the markets. It was aimed at partly punishing Germany and its government for insisting on the idea of banks and financial institutions taking 50% loss on the loans they had given to Greece and other troubled countries.
The day after the failed auction of bonds, Germany's finance minister announced his country would stop insisting on banks taking a 50% loss. This event provided a glimpse into the extent of power and influence that the financial industry wields over markets and governments in the West.
The new "technocrat" government appointed and not elected in Italy has as its Prime Minister Mario Monti, who is a former official in Goldman Sachs, an extremely powerful Wall Street investment banking corporation.
Italy's new government is headed by insiders from the banking and financial industry and is sure to promote the interests of the same banking and financial industry. This is yet another triumph for this industry which, with each passing year, tightens its grip over the West's economic and political system. What the West and its governments and citizens need to do is to break the supremacy of "finance capital" and redeem their tainted democracies and economies.