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Karl Rove Picks Himself Up, Becoming Latest Bad Actor To Escape Accountability

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Despite burning through some $390 million worth of GOP donors' fortunes, Karl Rove is still very much poised to be a central player in the Republican Party's rebuilding. That should only be surprising to people who don't know the first and only bipartisan rule of the Washington and Wall Street elite: There is no such thing as failure.

"If Karl had worked for these millionaires' companies he would have been fired," said Wayne Slater, a senior political writer for the Dallas Morning News who co-wrote the biography "Bush's Brain" and has known Rove for a quarter of a century.

But the rules for accountability in Washington are different, Slater said. For Rove, a master of flattery, "even if he doesn't deliver this time, he promises next time he will ... that's a formula for success."

Journalists covering the political consulting industry have long observed that its proprietors seem to succeed by "failing upward," reaping paychecks from a losing campaign and then moving onto the next one.

But Rove, who did not respond to a request for comment, is more than a mere consultant: he wielded political power from the inner sanctum of the George W. Bush White House. As such, he is emblematic of an establishment that still seems simply too big to fail, four years after the the Iraq War and the financialization of the American economy were repudiated by voters. Screw-ups are everywhere, but accountability is nowhere. There is no sign of that trend stopping after the most recent election.

The failure of President Barack Obama's administration to impose meaningful punishments on the architects of the financial meltdown has been well-documented. Tom Montag, the Goldman Sachs vice president who referred to one of his firm's own trades as "one shitty deal," is now a senior executive at Bank of America. His name has recently been bandied about as a candidate to replace Lloyd Blankfein back at Goldman. Blankfein has stuck around, of course, as has Jamie Dimon at JPMorgan Chase.

Even the people who were fired have made out quite nicely. Stanley O'Neal, the Merrill Lynch CEO who drove his company into the ground, serves on the board of Alcoa and generally keeps a low profile -- but probably will never face jail time. Ken Thompson was ousted as CEO of Wachovia in June 2008, but he got to hold onto a $5 million golden parachute and serve on the boards of BNC, the PGA Tour and Hewlett-Packard. Martin Sullivan, AIG's former CEO, received a $47 million severance package and now works as an executive at the insurance company Willis Group.

In the public policy world, accountability is just as absent. Dan Senor, who as a relatively young spokesman for the Coalition Provisional Authority in Iraq spun that disaster effortlessly, was most recently seen serving as a key adviser to Mitt Romney's presidential campaign. On the domestic side, Glenn Hubbard, the Columbia University economist who was instrumental in providing intellectual heft to the argument for the Bush-era tax cuts, also served as a Romney adviser, and was tipped as a potential Treasury secretary.

Phil Gramm, who was instrumental in deregulating the securities industry, is still vice chairman of UBS, a position he's held since he left the Senate. Alan Greenspan may have lost some of the reputational shine he had as the Maestro of the world economy, but other than that he's doing fine: he runs his own consulting company, and in April he received an NYU alumni award.

"I don't see even the equivalent of the old British men's club blackballing, as in, 'it's simply not done' type stuff -- that behavior, whether or not it's going to be prosecuted, [that] puts you out of the company of your peers," said former bank regulator William K. Black.

"Imagine we had a group of doctors who were supposed to be experts on the Hantavirus and they said, 'Oh, don't worry, it's not contagious,'" mused Dean Baker, an economist at the Center for Economic and Policy Research. "Presumably they'd all be fired and have to find some other way to survive."

But many people whose actions were not directly criminal, like economists who simply supported deregulation and failed to see the housing bubble, are "so valuable as legitimators of the status quo that they're kept on," Baker said.

Surveying the scene, Charles Ferguson, the filmmaker who has directed movies about both Iraq ("No End In Sight") and the financial crisis ("Inside Job"), said he saw two forms accountability could have taken: reputational damage and jail time.

The architects and cheerleaders of the Iraq War, he said, suffered from "terminal ideological blindness and managerial incompetence and insane arrogance."

"Unfortunately," he added, "it's hard to put people in prison for those things."

So instead, he said, some people like Condoleezza Rice "have had a lower profile than they would have liked, for sure than they would have otherwise had, but having to keep a relatively low profile is a very small price to pay considering what they did." Others, like Senor, have continued on their upward career trajectories.

When it comes to the financial industry, meanwhile, Ferguson and others have argued for years that jail would be an appropriate punishment for the bad actors behind the economic crisis. But it has not happened.

Black, who pursued the criminals behind the savings and loan crisis, said the lack of accountability was not the result of some new development in history.

"I don't think that human nature has changed," Black said. "I think we've always had the ability though to change the environment and select differently for who is going to prevail."

These days, he said, politicians from Bill Clinton to Bush to Obama were content to deregulate markets and let the bad actors inevitably encouraged by them off the hook.

"They always say well, you know, not everything is criminal," Black said. "Well, yeah, good -- prosecute the stuff that is."

Other countries have chosen a different path. After Icelanders literally banged pots and pans to force out the government that had enabled the "neo-Vikings" of finance, Iceland hired an ex-cop to oversee a team of 100 assistants to "stalk" those responsible for the crisis. His "interview rooms are never empty," according to an article in Le Monde.

In the United States, Ferguson says the lack of accountability -- which is "a bit of a mystery" to him -- has only one apparent solution.

"Unfortunately," he said, "it would appear in our current political climate that there has to be public clamor, because the authorities aren't doing it on their own."

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