2009: The Year Wall Street Bounced Back and Main Street Got ShaftedThere is more, go read the rest of the blog posting.
by Robert Reich
In September 2008, as the worst of the financial crisis engulfed Wall Street, George W. Bush issued a warning: "This sucker could go down." Around the same time, as Congress hashed out a bailout bill, New Hampshire Sen. Judd Gregg, the leading Republican negotiator of the bill, warned that "if we do not do this, the trauma, the chaos and the disruption to everyday Americans' lives will be overwhelming, and that's a price we can't afford to risk paying."
In less than a year, Wall Street was back. The five largest remaining banks are today larger, their executives and traders richer, their strategies of placing large bets with other people's money no less bold than before the meltdown. The possibility of new regulations emanating from Congress has barely inhibited the Street's exuberance.
But if Wall Street is back on top, the everyday lives of large numbers of Americans continue to be subject to overwhelming trauma, chaos and disruption.
It is commonplace among policymakers to fervently and sincerely believe that Wall Street's financial health is not only a precondition for a prosperous real economy but that when the former thrives, the latter will necessarily follow. Few fictions of modern economic life are more assiduously defended than the central importance of the Street to the well-being of the rest of us, as has been proved in 2009.
Inhabitants of the real economy are dependent on the financial economy to borrow money. But their overwhelming reliance on Wall Street is a relatively recent phenomenon. Back when middle-class Americans earned enough to be able to save more of their incomes, they borrowed from one another, largely through local and regional banks. Small businesses also did.
It's easy to understand economic policymakers being seduced by the great flows of wealth created among Wall Streeters, from whom they invariably seek advice. One of the basic assumptions of capitalism is that anyone paid huge sums of money must be very smart.
But if 2009 has proved anything, it's that the bailout of Wall Street didn't trickle down to Main Street. Mortgage delinquencies continue to rise. Small businesses can't get credit. And people everywhere, it seems, are worried about losing their jobs. Wall Street is the only place where money is flowing and pay is escalating. Top executives and traders on the Street will soon be splitting about $25 billion in bonuses (despite Goldman Sachs' decision, made with an eye toward public relations, to defer bonuses for its 30 top players).
Sadly most Americans are still in thrall to the idiotic economic policies of the Republicans that created this mess. So it looks like the 2010 elections will swing power back to the Republicans (maybe not a majority, but a much larger minority). This is crazy. People are creating their own misery by letting Republican have a voice, have credibility, or continue their crazy opposition to anything constructive.
Watching this mess from Canada it simply breaks my heart. People have made bad choices which has wrecked the economy and now when things can be fixed in 12 months, people are going back to the original source of the problem for a "fix". Nutty.
6 comments:
This has been the pattern through many election cycles. Just as economic policy could turn things around; the people elect to go with the Republicans again. 1980 is a prime example of how our political process really doesn't know what is good for itself. Because of greed and popularity; we elected to begin our downfall... Jimmy Carter just wasn't getting it done and wasn't flashy or exciting enough to suit the American voters, but his policies would have brought us into a greater era of prosperity instead of economic collapse.
You are right Thomas.
For me the classic "bait and switch" election was 1968 when Nixon won on a platform of a "secret plan" to end the Vietnam war. The secret? He would keep fighting it until the US won.
Now, if he had told people this "secret" then they wouldn't have elected him. But he dressed it up as a great change from Johnson's fumbling attempt to either ramp up and win or draw back and plead with North Vietnam to negotiate. Nixon sounded like he "had a plan".
Little did people realize it was a prank Nixon was pulling on them. Nixon was full of "fun pranks" like the Watergate break-in. I loved his secret plan to end radicalism in America, Cointelpro.(Oh, okay, Cointelpro was not Nixon's brainchild, but he was its #1 fan.)
You have brought something "new" to my attention; very interested in Cointelpro (hope to post a little blurp about it tonight).
The presidential elections may not be the biggest harm done. I mean, the midterm elections are probably more damaging to a continuity in policy. I believe this till I remember the vast majority that we have had and still no real valuable changes, but I hope that this will not be changed in the coming election, but as you say the voters will probably see to a more Republican congress.
Thomas: One reason why Cointelpro still bugs me is that it was a shocking revelation to me that the government was secretly destroying groups. (OK, I could understand taking down really dangerous groups, but they targeted peaceful groups. Unitarians and Quakers were targeted because they wanted to stop the Vietnam War. This was unacceptable to J. Edgar Hoover and other right wing nuts in government.)
One searing event is etched in my memory. I remember getting into a real shouting match with my father back in 1969 when the FBI killed Fred Hampton, a Black Panther. I have no love for the Black Panthers. They were militaristic nuts. But the FBI literally murdered Fred Hampton in his sleep.
I remember watching the news report on a major news network and the reporter had the camera man pan the camera along the door and walls of the room in which Fred Hampton was sleeping and there were literally hundreds of bullet holes. He then had his camera man pan back to the wall behind the police. Nothing. Nada. Zip.
The official "police report" in 1969 said it was a shoot out initiated by the Panthers. But when the US Congress blew open Cointelpro, papers were released showing that there was a program to assassinate "threats" and that's what they did to Fred Hampton.
Now I don't know Fred Hampton and I probably wouldn't have any love for him if I knew him, but I was shocked to find that the government acted as judge, jury, and executioner secretly while using the media as a patsy to spew out misinformation. At that point I no longer had much faith in government.
I would like to have faith in government. I still advocate voting and organizing to sway government, but the murder of Fred Hampton made it clear to me that it is a real them-versus-us situation. My naive belief in good guys wearing white hats disappeared. I realized that the real world is uglier than I ever imagined. That's when my philosophy that nothing is black or white, everything is some murky gray, at best we stumble through life trying to do good, but nothing is clear was born.
In thousands of years of history; nothing has ever become black and white or clear (its always muddy). We think that we can come to an understanding and to some degree we do, but its still gray and the more knowledge there is the less truth there is for anyone to find. I still think that the dangerous ones are those who believe that it is black and white. These are the extremists who burn civilization in an effort to cleanse society or protect people from heresy or some idea. These are the witch hunters, white supremacists and other zealots down through history. How can anyone be so sure that they have the answers? Hoover is an example of this misguided enthusiasm. I wonder who directed him or if he was working on his own....
I haven't read much on Hoover but I do know that he had a homosexual liaison with his second in command at the FBI. Why is this important? Because Hoover was rabidly anti-gay. The most dangerous people are those who suppress awareness of themselves.
Hitler hated Jews, but there is good evidence that his father was the illegimate offspring of a sex between his mother an a Jew. Self-hatred fed Hitlers extremism.
I think troubled self-hate accounts for a lot of the vicious crazed people running around causing so much grief. I think accounts for Hoover's crazed fear of homosexuals, communists, socialist, etc. that he blanketed with the label "subversive".
Apparantly Hoover stayed in power as long as he did because he used his investigators to dig up dirt on presidents, senators, and congressmen and threatened them with releasing it if they pressured him to step down. He was a fanatic who was convinced that he personally was essential to save America from itself. The problem was, his vision of America was anti-liberal, anti-progressive. So he was increasingly out of step with the tenor of the times by the time the 1960s arrived.
Post a Comment