Tuesday, July 5, 2011

The New Gilded Age & Obama's Failure

Here are some juicy bits from a NY Magazine article by Frank Rich on Obama and the 2008 Financial Meltdown. This subtitle to the article sums it up:
The president’s failure to demand a reckoning from the moneyed interests who brought the economy down has cursed his first term, and could prevent a second.
Here is Rich's take on the NY Public Library's centennial celebration:
Bloomberg delivered a pre-dinner benediction from an altarlike perch on the main reading room’s balcony. “Free and open access to information may be the single most important component of any democratic society,” he said.

But it was impossible to banish toxic trace memories of the financial meltdown. Some two weeks earlier, the mayor had restricted the “free and open access” he now extolled. His fiscal 2012 budget called for slashing $40 million from the library system, a cut that would have mandated four-day weeks and the shutdown of a dozen branches.
One of the library’s formative patrons, present at the original dedication exactly 100 years earlier, was Andrew Carnegie, a ruthless tycoon second to none. But Carnegie did build a steel empire that sped the growth of the nation. Our own Gilded Age’s legacy is the financial “products” that greased the skids of America’s decline. At the centennial gala, you couldn’t escape the paw print of Stephen Schwarzman, the Blackstone Group billionaire whose library gift had entitled him to blast his name on any stray expanse of marble on the 42nd Street building. Schwarzman is nothing if not a representative 21st-­century titan. His principal monument has been to himself­, namely a notorious over-the-top 60th-birthday party, exquisite in both its bad timing and bad taste, that he threw the year before the crash. (If you’re shelling out a million bucks for an entertainer, is Rod Stewart the best you can do?) He is perhaps most renowned of late for comparing Obama to Hitler because the administration dared propose taxing private-equity firms’ share of client profits at a rate higher than 15 percent. (He later apologized.)
And here is the astoundingly lawless "results" of the Obama administration:
What haunts the Obama administration is what still haunts the country: the stunning lack of accountability for the greed and misdeeds that brought America to its gravest financial crisis since the Great Depression. There has been no legal, moral, or financial reckoning for the most powerful wrongdoers. Nor have there been meaningful reforms that might prevent a repeat catastrophe. Time may heal most wounds, but not these. Chronic unemployment remains a constant, painful reminder of the havoc inflicted on the bust’s innocent victims. As the ghost of Hamlet’s father might have it, America will be stalked by its foul and unresolved crimes until they “are burnt and purged away.”

After the 1929 crash, and thanks in part to the legendary Ferdinand Pecora’s fierce thirties Senate hearings, America gained a Securities and Exchange Commission, the Public Utility Holding Company Act, and the Glass-Steagall Act to forestall a rerun. After the savings-and-loan debacle of the eighties, some 800 miscreants went to jail. But those who ran the central financial institutions of our fiasco escaped culpability (as did most of the institutions). As the indefatigable Matt Taibbi has tabulated, law enforcement on Obama’s watch rounded up 393,000 illegal immigrants last year and zero bankers.
And here is the pitiful reality of the "do nothing" Obama administration:
Those in executive suites at the top of that chain have long since fled the scene with the proceeds, while bleeding shareholders, investors, homeowners, and ­cashiered employees were left with the bills. The weak Dodd-Frank financial-reform law that rose from the ruins remains largely inoperative, since the actual rule-writing was delegated to understaffed agencies now under siege by banking lobbyists and their well-greased congressional overlords. The administration’s much-hyped Consumer Financial Protection Bureau is being sabotaged by Washington Republicans intent on blocking any White House nominee, whether Elizabeth Warren or some malleable hack, to lead it. “We can’t let special interests win this fight,” said Obama when he proposed the agency in October 2009. Well, he missed his moment to fight for both it and Warren, and the special interests won without breaking a sweat.
Go read the whole article. It is a sad litany of failure on the part of Obama. George Bush failed the US by creating the mess and pushing America over the brink. Obama has failed the US by standing at the brink and looking on and reciting grand speeches and making empty promises while America is prostrate and broken at the bottom of the ditch.

Obama needs to be a one term president. Not because the idiot Republicans offer anything better. They offer worse, far worse. What is needed is a true candidate of the people. Somebody to the left of "socialist" Obama. What is needed is a true fire-breathing politico with a backbone of steel and the eyes afire with the righteous outrage of Jehovah come to smite the sinners and infidels. America needs a political leader who will lead.

The Frank Rich article is a must read for those needing a refresher course in the horrors of the 2008 financial collapse. But it also does double duty by pointing out -- in very graphic detail -- the utter failure of Obama to respond appropriately to the devastation of this crash and the suffering of the American people. It has a litany that names names of the "big shots" that Obama adores and/or shelters. It makes it very clear whose side Obama is on: the well heeled not the down at the heel.

You really must read this article.

Update 2011jul06: Here is a bit from a post by Matt Taibbi on his Rolling Stone blog about this Frank Rich article:
A lot of people are talking about Frank Rich’s explosive new article in New York magazine. I think it is a remarkable thing, the latest and maybe the most comprehensive in an increasingly lengthy series of articles and investigations into the Obama administration’s failure to properly investigate the causes of the financial crisis.


Rich’s thesis is that this issue is becoming important not just to reporters, but to voters, and that Obama may soon pay for his failures at the polls:
Obama can win reelection without carrying 10021 or Greenwich in any case. The bigger political problem is that a far larger share of the American electorate views him as a tool of the very fat-cat elite that despises him.
In making this point, Rich uses language that seems unusually savage for him:
For all the lurid fantasies of the birthers, the dirty secret of Obama’s background is that the values of Harvard, not of Kenya or Indonesia or Bill Ayers, have most colored his governing style. He falls hard for the best and the brightest white guys.
Yikes! That last line is truly brutal and I imagine will not be forgotten inside the White House, which once must have viewed Rich as one of Obama’s great supporters in the punditry world. A lot of journalists, myself included, were once enthralled by Obama, and saw his election as a rare uplifting moment in our electoral history, with the candidate himself performing with tremendous grace and class as he helped slay the country’s racial demons. Some of us even thought that Obama might be that rare, once-in-a-generation-type political talent who could help the country rise above itself, an MLK or a Roosevelt.


The gist of this blistering Rich piece is that Obama came to office at a time of unprecedented hardship and public discontent, and made a mistake in deciding not to ride that anger and take an axe to those guilty of destroying the economy. Rich isn’t saying that Obama needed to put a guillotine on Maiden Lane; he’s saying that Obama’s big problem was that his failure to clean up Wall Street coincided with a similarly inexplicable failure to address the unemployment problem:
Howard Dean rage has never been Obama’s style—hope-and-change was an elegant oratorical substitute—and had he given full voice to the public mood, he would have been pilloried as an “angry black man.” But Obama didn’t have to play Huey Long. He could have pursued a sober but determined execution of justice and an explicit, major jobs initiative—of which there have been exactly none, the too-small stimulus included, to the present day.
Rich goes on to argue, very convincingly, that Obama decided to pass on the unemployment issue because he accepted the advice of Bob Rubin acolytes like Tim Geithner, who urged the president to move instead toward the Tea Party and take up the “austerity” mantle.


More and more, I hear that Obama’s hands-off-Wall-Street policy is a matter of concern within what used to be his own circle – Beltway professionals, intellectuals, lobbyists, academics, etc. Pretty clearly, that concern is bleeding into the mainstream press now. It’ll be interesting to see if Rich is right about it bleeding into the voter pool next.
I think the Democratic party should plan for a one term Obama. It needs to be lining up candidates for 2012 who will be fire breathing populists with a real democratic socialist agenda, something that will make silly the previous right wing press mislabeling of "socialist" Obama.

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