ALSO BY MIKE LOFGREN The Party Is Over VIKING An imprint of Penguin Random House LLC 375 Hudson Street New York, New York 10014 penguin.com Copyright © 2016 by Michael Lofgren Penguin supports copyright. Copyright fuels creativity, encourages diverse voices, promotes free speech, and creates a vibrant culture. Thank you for buying an authorized edition of this book and for complying with copyright laws by not reproducing, scanning, or distributing any part of it in any form without permission. You are supporting writers and allowing Penguin to continue to publish books for every reader. ISBN 978-0-698-18692-7 Version_1 This book is dedicated to Joan Millicent Morris Lofgren A mother and a teacher: To you I owe everything CONTENTS Also by Mike Lofgren Title Page Copyright Dedication Acknowledgments Introduction 1. Beltwayland 2. What Is the Deep State? 3. Bad Ideas Have Consequences 4. Do Elections Matter? 5. Does Our Defense Actually Defend America? 6. Economic Warfare: Big Banks and the National Security State 7. The Commanding Heights 8. The Deep State, the Law, and the Constitution 9. Silicon Valley and the American Panopticon 10. Personnel Is Policy 11. Austerity for Thee but Not for Me 12. A Stopped Clock Is Right Twice a Day 13. Signs of Change? 14. America Confronts the World 15. Is There an Alternative? Notes Index ACKNOWLEDGMENTS I would like express my sincere thanks to Bill Moyers for his encouragement and advocacy of this project from its very inception. Bill’s suggestion to write an essay on the Deep State was the acorn from which the oak took root. Gratitude is owed to Chuck Spinney and Brian O’Malley, two firm friends and former fellow travelers with me in the government. Their observations over the years helped me crystallize and polish the concept of the Deep State. Thanks also to Andrew Cockburn, Ray McGovern, Tom Drake, Winslow Wheeler, Andrew Feinstein, and Bill Binney for their valuable assistance at critical stages. To former colleagues and bosses who provided me with an endless stock of practical knowledge about the way government really works: well, you know who you are! In hindsight, all my governmental experiences were enlightening, if not always as edifying as a Parson Weems fable at the time they actually occurred. Joy de Menil, the editor of this book, worked tirelessly with me to structure the narrative into a coherent whole. Bridget Matzie, my agent, was an unwavering supporter throughout the project. And, of course, none of this would have been possible without a loving and totally supportive family: Alisa, Laura, and Eric. INTRODUCTION F or twenty-eight years I was a congressional employee with an interesting and challenging but by no means remarkable career on Capitol Hill as a staff member and national defense analyst for the House and Senate budget committees. I began my tenure as a mainstream Republican in the early days of the Reagan presidency. By the end of my career I considered myself a resolute nonpartisan, and increasingly viewed all political ideologies as mental and emotional crutches, or substitute religions: for leaders, a means of manipulating attitudes and behaviors; for the rank and file, a lazy surrogate for problem solving and a way of fulfilling the craving to belong to something bigger than oneself. My first perception of this ideological syndrome came in the mid-1990s, when Republicans had taken over the majority in the House of Representatives for the first time in forty years. It was an exciting time, to be sure, but a tumultuous one. Speaker of the House Newt Gingrich, the Robespierre of the Republican revolution, employed chaos, polarization, and scapegoating as the means of carrying out a divide-and-rule strategy. It worked for a time, but I saw in retrospect that it was a technique that crippled the legislative branch so that it could no longer work effectively. It did not help that many Republican congressmen were too busy lasciviously ogling the sordid details of Kenneth Starr’s report on the Monica Lewinsky affair to notice that an obscure extremist group called al-Qaeda had blown up two of our embassies in Africa. The real wake-up call for me came during that surreal period between the terrorist attacks of September 11, 2001, and the invasion of Iraq in March 2003. If there was any point in our post– World War II history that called for careful analysis of the facts and rational responses that would serve the nation’s long-term security interests, this was surely it. Instead, a clique of neoconservative ideologues both inside and outside the George W. Bush administration, abetted at every step by the mainstream news media, acted as carnival barkers for the most destructive and self-defeating policies since Vietnam, and maybe since the eve of the Civil War. A majority of politicians on Capitol Hill, along with a sizable portion of the American people, ambled around like sleepwalkers on the edge of a precipice, unaware of the danger the ideologues were luring them into. When the House Administration Committee instructed the institution’s cafeterias to rename French fries “freedom fries” because the government in Paris stubbornly remained unmesmerized by the Bush administration’s arguments for war in the Middle East, I recognized that the People’s House had hit intellectual rock bottom. Still, I told whoever would listen that the “slam dunk” evidence of Saddam Hussein’s weapons of mass destruction was weak and that by invading Iraq the United States might be purchasing its very own West Bank on steroids—not that my objections changed anyone’s mind. Later, when the invoices began to pile up—the total bill for Iraq summed up to a nice, round one trillion dollars, excluding debt service—I attempted, from my position on the Budget Committee, to reconcile this extravagance, as much as the numbers would allow, with the rote statements of representatives and senators that deficit spending was a sign of an out-of-control government and a national moral blot that would impoverish our children. Parallel to these developments, the American economy was mutating into a casino with a tilted wheel. Ably assisted by politicians, whom I began to see less and less as leaders and more and more as corporate errand boys, the titans of Wall Street constructed a heads-I-win-tails-you-lose economic system based on Ponzi schemes, asset stripping, and rent extraction. The inevitable result was the economic meltdown of 2008. The eventual solution to that catastrophe was not national reconstruction but a bailout of the financial institutions that had caused the disaster in the first place. They soon returned to record profitability and market dominance as the rest of the country experienced the slowest recovery since the Great Depression. The twin shocks of 9/11 and the Great Recession seem mentally to have unhinged a portion of the American people and much of the political class. The following years were consumed by crazy arguments about the president’s birth certificate, death panels, and voters shouting that the government must get its hands off their government-provided Medicare. By 2011, when a new crop of Tea Party freshmen had taken their seats in Congress and announced that their first priority was to drive the country into a sovereign debt default, I decided I’d had enough. The circus was being run from the monkey cage, and it was time to move on. Back in private life, I wrote about the rightward lurch of the Republican Party and the intractable gridlock on the Hill in a book titled The Party Is Over: How Republicans Went Crazy, Democrats Became Useless, and the Middle Class Got Shafted. Perhaps I can claim a modest amount of credit for helping to launch the now-thriving cottage industry of political pundits noticing the nuttiness of the present-day Party of Lincoln with the mortified distaste of an Anglican bishop confronted by a tribe of cannibals. That said, I was hardly ready to launch myself into the arms of the Party of Jefferson and Jackson. That crowd had serious problems, too. Shortly after finishing the book, I began to feel that I had dealt with the symptoms—lurid symptoms, to be sure—rather than fundamental causes. Diseases always manifest themselves as symptoms, but these should not be confused with the underlying cause of the malady. America’s politics were broken, but so were its economic engine and its supposedly bipartisan foreign policy. Social indicators of human development such as life expectancy and maternal mortality showed that America was slipping in comparison with other developed countries. Economic inequality was growing. Infrastructure was getting rickety. Educational policy was confused and ineffectual. The Tea Party, as gaudy and irrational as its anger might be, was merely one among several warning signs of a deep-seated dysfunction in the way American society was run at the very top. Anyone who has spent time on Capitol Hill will occasionally get the feeling when watching debates in the House or Senate chambers that he or she is seeing a kind of marionette theater, with members of Congress reading carefully vetted talking points about prefabricated issues. This impression was particularly strong both in the run-up to the Iraq War and later, during the mock deliberations over funding that ongoing debacle. While the public is now aware of the disproportionate influence of powerful corporations over Washington, best exemplified by the judicial travesty known as the Citizens United decision, few fully appreciate that the United States has in the last several decades gradually undergone a process first identified by Aristotle and later championed by Machiavelli that the journalist Edward Peter Garrett described in the 1930s as a “revolution within the form.” Our venerable institutions of government have outwardly remained the same, but they have grown more and more resistant to the popular will as they have become hardwired into a corporate and private influence network with almost unlimited cash to enforce its will. Even as commentators decry a broken government that cannot marshal the money, the will, or the competence to repair our roads and bridges, heal our war veterans, or even roll out a health care website, there is always enough money and will, and maybe just a bare minimum of competence, to overthrow foreign governments, fight the longest war in U.S. history, and conduct dragnet surveillance over the entire surface of the planet. This paradox of penury and dysfunction on the one hand and unlimited wealth and seeming omnipotence on the other is replicated outside of government as well. By every international metric of health and living standards, the rural counties of southern West Virginia and eastern Kentucky qualify as third-world. So do large areas of Detroit, Cleveland, Camden, Gary, and many other American cities. At the same time, wealth beyond computation, almost beyond imagining, piles up in the money center of New York and the technology hub of Palo Alto. It piles up long enough to purchase a $95,000 truffle, a $38 million vintage Ferrari GTO, or a $179 million Picasso before the balance finds its way to an offshore hiding place. These paradoxes, both within the government and within the ostensibly private economy, are related. They are symptoms of a shadow government ruling the United States that pays little heed to the plain words of the Constitution. Its governing philosophy profoundly influences foreign and national security policy and such domestic matters as spending priorities, trade, investment, income inequality, privatization of government services, media presentation of news, and the whole meaning and worth of citizens’ participation in their government. I have come to call this shadow government the Deep State. The term was actually coined in Turkey, and is said to be a system composed of high-level elements within the intelligence services, military, security, judiciary, and organized crime. In John le Carré’s recent novel A Delicate Truth, a character in the book describes the Deep State as “the ever-expanding circle of non-governmental insiders from banking, industry and commerce who were cleared for highly classified information denied to large swathes of Whitehall and Westminster.” I use the term to mean a hybrid association of key elements of government and parts of top-level finance and industry that is effectively able to govern the United States with only limited reference to the consent of the governed as normally expressed through elections. The Deep State is the big story of our time. It is the red thread that runs through the war on terrorism and the militarization of foreign policy, the financialization and deindustrialization of the American economy, the rise of a plutocratic social structure that has given us the most unequal society in almost a century, and the political dysfunction that has paralyzed day-to-day governance. Edward Snowden’s June 2013 exposure of the pervasiveness of the National Security Agency’s surveillance has partially awakened a Congress that was asleep at the switch and has ignited a national debate about who is really in charge of our government. At the same time, a few politicians, most notably Elizabeth Warren of Massachusetts, are beginning to argue that the American economy is rigged. But these isolated cases have not provided a framework for understanding the extent of the shadow government, how it arose, the interactions of its various parts, and the extent to which it influences and controls the leaders whom we think we choose in elections. This book, based in large part on my experiences and observations while in public service, aims to provide that framework. My reflection on our shadow system of government has come only after my retirement in 2011 and my physical withdrawal from Washington, D.C., proper and the institutions located there. Unlike