The Counter Reformation

When it comes to deeply held beliefs, you don't give them up easily. Think of the religious wars of Europe. Well, the US is about to get a mini-version of this as the corporate elite prepare to do battle to resist change. Here is a bit from an excellent blog entry by Robert Reich, Clinton's Secretary of Labor:

... Goldman Sach's CEO Lloyd Blankfein, who says the firm's business strategy doesn't need to change.

What? Goldman got $10 billion of taxpayer money precisely because it and other big banks were so over-leveraged they threatened the whole financial system. I can understand why Blankfein doesn’t want to change. He took home $54 million last year. (He has foregone a bonus this year and is taking home a piddling $600,000.) But the public expects real reform for its $10 billion at Goldman and tens of billions more in other major banks.

Blankfein isn't alone. I've heard the same thing from CEOs and directors all over the Street. They see the problem as cyclical, not structural. "The economy stinks," they tell me, "but it'll turn around in 18 months, and then we're back to the same business."

...

Right now, Wall Street and Detroit are willing to say whatever they need to say to keep the taxpayer money coming. But when the economy begins turning up, my betting is that their Washington lobbyists will push back hard against any major restructurings the government wants to impose on them. New regulations of Wall Street will be watered down and circumvented; new requirements on the Big Three for green technologies will be resisted.

Yet the bailouts have been sold to the public as means toward fundamental change in finance and autos. If the bailouts are to do what they're supposed to – stop Wall Street from wild risk-taking with piles of borrowed money, and push the auto industry into making fundamentally new products that conserve energy -- Washington will not only have to set strict standards now and in the months ahead when the bailout money flows, but also hang tough when the economy begins to revive.

Here is a blog entry by Robert Reich called "Democracy and Greenspan" which looks deeper into the politics of lobbying to understand how the corporate elite manage their affairs:

The ideology of a perfectly self-correctly free market has given way to what might be described as a raid by America’s biggest banks and corporations on the public purse, supposedly justified by benefits to the broader public which seem never to materialize. What happened to the ideology? On closer inspection, it turned out to be something of a cover all along.

During the same years Greenspan called for deregulation of financial markets, Wall Street was accelerating its bankrolling of the U.S. Congress. Securities and investment firms contributed larger and larger amounts of money – not just to conservative Republicans who might expect such support but also to Democrats who had never been so graced before. According to Center for Responsive Politics, Wall Street firms dramatically increased their contributions to both parties during these years. Their share of total donations to the Democratic Senatorial Campaign Committee, for example, rose continuously, from 5 percent during the 1999-2000 election cycle to 15 percent by the 2007-2008 cycle.

Robert Reich is one smart cookie. Too bad he is not a real "player" in US politics shaping the future. Instead he appears to be on the left shouting out his ideas and encouragement while the scrum of politics is a messy confusion where the right may just snatch victory from the hands of the centre-left Obama camp.