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Monday, March 30, 2009

Democrats Aren't the Whole Problem

This is a long one, but I'm trying to start an important argument, so please track with me:

Some of the regular posters on this blog, and no doubt many of its readers, think that the economic mess we’re in is due mainly to the control of the Democrats in Congress over the last 2 years, plus maybe the Community Reinvestment Act (more Democrat meddling from longer ago, but still something we can blame on the Dems). If you’ll scroll down to my post urging Rep. Bachmann to read an article from The Rolling Stone, you’ll see comments from G-Man to the effect that returning control of Congress to Republicans is key to solving our problems: just one piece of evidence showing this belief is prevalent.

Prevalent rubbish, that is. In the belief that problems can't be solved until understood, let's examine an ugly truth: Republican leaders (as distinguished from the party faithful at the precinct level)--as composed for the last 25 years, at least--are no good for fighting the real problem we face. They are roughly equally at fault, with the Dems, for allowing, if not encouraging, the development of the real problem.

Okay, you bite? The real problem is … ta-da!: the banksters, their view of the world, and their current position of power in federal policy making (the banksters first and foremost include the Federal Reserve, but for the sake of G-Man’s blood pressure, I’ll restrict myself to the financial meisters in general). If Republican leadership were going to show itself serious about solving this country’s financial problems in a sane (that is, conservative) way they A) would already have done so and B) would have to kick out everyone with any history of service to Wall Street banks. And they’re not going to do it, because either A) they’re Wall Street banksters themselves, or B) they have accepted the erroneous view that, as a former IMF chief economist puts it, what’s good for Wall Street is good for America.

This former IMF chief economist, Simon Johnson, has documented the bipartisan nature of the oligarchy that has taken over US policy, making it an arm of the finance-meisters for their own enrichment. He explains,
“One channel of influence was, of course, the flow of individuals between Wall Street and Washington. Robert Rubin, once the co-chairman of Goldman Sachs, served in Washington as Treasury secretary under Clinton, and later became chairman of Citigroup’s executive committee. Henry Paulson, CEO of Goldman Sachs during the long boom, became Treasury secretary under George W.Bush. John Snow, Paulson’s predecessor, left to become chairman of Cerberus Capital Management, a large private-equity firm that also counts Dan Quayle among its executives. Alan Greenspan, after leaving the Federal Reserve, became a consultant to Pimco, perhaps the biggest player in international bond markets.”

That list of names looks pretty bipartisan to me. The names dropped in The Rolling Stone piece were similarly bipartisan.

Johnson goes on to describe the policy response so far. This quotation, please note, describes actions all taken by a Republican administration:
“The response so far is perhaps best described as “policy by deal”: when a major financial institution gets into trouble, the Treasury Department and the Federal Reserve engineer a bailout over the weekend and announce on Monday that everything is fine. In March 2008, Bear Stearns was sold to JP Morgan Chase in what looked to many like a gift to JP Morgan. (Jamie Dimon, JP Morgan’s CEO, sits on the board of directors of the Federal Reserve Bank of New York, which, along with the Treasury Department, brokered the deal.) In September, we saw the sale of Merrill Lynch to Bank of America, the first bailout of AIG, and the takeover and immediate sale of Washington Mutual to JP Morgan—all of which were brokered by the government. In October, nine large banks were recapitalized on the same day behind closed doors in Washington. …”

Not only have Republicans been at fault in helping the financial oligarchy into power, and implementing their demands, but the Republicans were a big part of advancing false doctrine in the guise of conservative capitalism that encouraged all of us to hand over our resources to the tender mercies of the bankster bosses:
"In a society that celebrates the idea of making money, it was easy to infer that the interests of the financial sector were the same as the interests of the country… Faith in free financial markets grew into conventional wisdom—trumpeted on the editorial pages of The Wall Street Journal and on the floor of Congress."

If faith in free financial markets had been accompanied by a dim view of the intentions of Wall Street's financiers, we would probably have done much better, because free financial markets are good things. The intentions of Wall Street financiers are not. The meisters of finance, the banksters, are not conservatives, nor even capitalists--they're corporatists. So as events have proved in the ancient and recent past, they'll take handouts from the taxpayer and government-enforced expansion of their market share toward monopolistic status with gleeful abandon. Republicans wrongly promoted the notion that what Wall Street wanted must be good (I have no opinion on the wisdom of gutting Glass-Steagall, but witness Phil Gramm's eager participation in giving Wall Street what they wanted that time), in the willfully blind belief that because Wall Streeters are in business, they must want laissez-faire, limited government. George W. Bush did wrong to put into his administration graduates of Goldman Sachs's top rung, because they, and the bosses at JPMorgan and AIG and Citigroup and Bank of America and HSBC and so on, ad nauseum, are big believers in a perversion of laissez-faire philosophy: "hands off our handouts."

I don’t hold with the IMF—and Mr. Johnson, true to IMF form, doesn’t offer us any solutions conservative in nature. But his description of the problem is clear and damning (and fits, with different evidence, perfectly with that in The Rolling Stone piece previously posted). It shows that we local Republicans should view our national party heads and office holders as political millstones from which to untie ourselves, rather than as intelligent, honest leaders we should follow. To win any hearts in the next few years, we’re going to have to admit to our neighbors and friends that the Republicans in power have been a part of the problem and need to go, while urging them to look at the party’s platform and what the local Republicans they know believe. We must get rid of everyone who has cooperated in the enrichment of banksters, make the end of such enrichment our foremost message, and declare George W. Bush in particular to have been, at best, a cooperator in Goldman Sach’s and JPMorgan’s “Quiet Coup”. If this is populism, it is not populism as practiced by demagogues of the past (and present, as Rep. Bachmann's recent "no foreign currency" gag demonstrates), playing on unsupported stereotypes held by uninformed masses. Rather, it’s a conservative’s populism—an appeal built on facts, the facts that current and future taxpayers and (mostly) unsuspecting foreign buyers (we don’t have to tackle the role of Asian governments just at present) of our debt are being fleeced, and that fleecing is happening to benefit people who are already rich and powerful. It’s the populism of Nathan the prophet, telling King David, “thou art the man”—the populism of truth and justice.

G-Man tells me, “Politics isn’t pretty.” No, G-Man, but I was already aware of that. Now everybody else in the Republican Party needs to join me in admitting that Reality isn’t pretty, much of the time, either. The Rolling Stone, and now The Atlantic, have published pieces making factual claims that fit with everything else I know about the financial crisis to date. Their description of the involvement of the Republican Party’s national office-holders should make us want political blood. Getting mad at the Democrats is kind of like criticizing a pagan for not living like a Christian: they don’t profess any better than they do, so even if it's true that the Democrats are more to blame, they won't feel the heat proportionately. That's just another ugly Reality. But our Republican office-holders profess conservative principles, and they should be held to the consequences of failing to act on what they say they believe.

3 Comments:

Anonymous Anonymous said...

JG

Bicking isn't going to solve the problem. And your concrete solution is this? "To win any hearts in the next few years, we’re going to have to admit to our neighbors and friends that the Republicans in power have been a part of the problem and need to go, while urging them to look at the party’s platform and what the local Republicans they know believe. We must get rid of everyone who has cooperated in the enrichment of banksters..."

What in your minds eye does a local solution look like to you?

3/31/2009 8:17 PM  
Blogger John Galt said...

I'm sorry. I fail to see how conversations between me and my friends and neighbors, and you and your friends and neighbors, isn't an inherently local solution. This post isn't a complaint (and please, spare us the pseudo swearing; use real words with real meanings). It's an argument that we aren't going to win anything until we admit to the people who are sick of us where we went wrong.

If you mean, do I have local political goals, the answer is, not really. Not yet, because I see no one on the local scene who's remotely inspiring. Norm Coleman? Tim Pawlenty? Michele Bachmann, who doesn't seem to know the difference between our domestic transactional currency and a global reserve currency? But surely refusing to vote for those who've failed to live up to conservative ideals, so that they are forced out of office, is a concrete first step--to be followed, we hope, by voting for someone worth voting for. Meanwhile, engage everyone you know in conversation, start arguments, disguise or refuse to increase your income (so that the government can't tax it and use the revenue to its nefarious ends), print t-shirts, march in parades, train your children to use their brains, buy billboard space and put up the preamble to the Constitution, give money to the Taxpayers' League, volunteer at an abortion clinic or serve soup or visit the elderly (to silence all the fools who think conservatives are the callous ones) ...

Enough concrete local solutions for you?

4/02/2009 8:42 PM  
Anonymous Anonymous said...

JG,

It sounds sorta like you're on the right track. It starts with the caucus. And, definately starts with getting the right candidates to support. I hope that is what you mean. We all talk and talk and talk around the republican campfire but when it comes down to getting candidates I'm more than just a little dismayed. 50B picked Grivna after Samuelson. Both are blue and blue goes deep.

4/04/2009 11:37 AM  

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