When I was young -- or perhaps I should begin: Today, when the old community values no longer seem to exist...
Looking back, when I grew up, I absorbed from my family the notion that bankers and financial advisers were persons of integrity. One assumed they worked by professional standards. We firmly believed their clients' interests were paramount in their minds.
Widows like Granny, my great-grandmother Sara Delano Roosevelt, had implicit trust in the people who handled her financial affairs, in much the same way that she assumed integrity and professional standards in her doctor or lawyer.
Looking back again, I'm not at all sure that my grandfather, Franklin Roosevelt, swallowed his mother's idealistic notions. As Assistant Secretary of the Navy during eight years in Woodrow Wilson's administration, he had handled all the Navy's contracts and labor relations. He then observed during the Harding and Coolidge presidencies how business interests were given the highest priority, and then, even during the Great Depression, how President Hoover considered our capitalistic system sacrosanct, untouchable. Hoover's Secretary of the Treasury, Andrew Mellon, was a "leave it alone liquidationist" who concluded: "[Liquidation] will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, lead a more moral life."
Hoover didn't go along with all that meanness, but, as if he was driven by religious fervor, he did not want to interfere with "free enterprise." He felt strongly that capitalism should and could balance itself without government intervention. FDR could see that this wasn't working. The Great Depression was getting worse.
By 1933 any illusions even my dear great-grandmother might have had were shattered by a Congressional committee's exploration of the business and financial community's part in creating the Great Depression. The "Pecora Commission" as it became known, due to the inimitable skill and insight of the committee's counsel, Ferdinand Pecora, was actually initiated by the chairman of the Senate Banking Committee, South Dakota Senator Peter Norbeck -- a name lost to history because of Pecora's extraordinary personality.
Although FDR was inaugurated six weeks after the Pecora Commission began its work, he defended the Pecora investigation against the charge that it was destroying the nation's confidence in bankers. He said the bankers "should have thought of that when they did the things that are being exposed now." The New Deal administration advised the Pecora commission: "The feeling is that if the people become convinced that the big violators are to be punished, it will be helpful in restoring confidence." The present administration, particularly the president's economic advisers, seems averse to seeing anything like that happen.
Alan Brinkley, in a recent edition of Vanity Fair, describes the Pecora Commission's investigation, concluding that it "had a lasting impact on the public's image of the financial world, and it helped make possible new laws and regulations aimed at preventing a depression-size calamity from befalling the country again."
He adds: "Congress has been remarkably decorous about investigating what went wrong." He writes that, in contrast to the Pecora Commission, today, "showboating and modestly informed members of Congress berate witnesses without eliciting any useful disclosures -- only self serving apologies." (Replies from the CEO of Goldman-Sachs come to mind.)
But to ask, "Where is our Ferdinand Pecora?" sidesteps the real questions: Where is the White House? Where is presidential leadership in our crises?
President Obama should note that President Roosevelt's slamming the bankers and financiers -- beginning with his inaugural address and right up through his campaign for a second term -- did not destroy the country's banking system.
Sixty million Americans listened and then responded to the president's advice after his radio fireside chat on March 12, 1933, just a week after his inauguration. Roosevelt concluded: "I can assure you that it is safer to keep your money in a reopened bank than under the mattress."
The next day, the public lined up to return their money to the very banks they had withdrawn it from two weeks before. Why? Their president said that it was now safe to do so. FDR had explained what banking was all about without being condescending. As Will Rogers wryly said at the time: "He made everybody understand it, even the bankers."
The New York Stock Exchange, which had been closed for nearly two weeks, reopened and enjoyed a 15 percent increase the first day. (For more details see Jonathan Alter's The Defining Moment, pages 267-271.)
We haven't been able to count on the banking community since my childhood, and we can't count on this Congress to give us the equivalent of the Pecora Commission. However, we should be able to count on our president.
There are many differences between those days and today, but presidential leadership should remain the same. Confidence in FDR won for the Democrats the 1934 mid-term election, and then provided Roosevelt with an overwhelming victory in 1936, electing him to a second term. Enough said.
Both would erase Thomas Jefferson.
How hard is that to understand? In a country that's broke and going bankrupt and verging on soveriegn debt default, wise people don't want to be holding that country's currency or it's bonds.
Why? The president is an integral part of the political system owned by a fraction of 1% of the population. How otherwise can we explain Obama surrounding himself with the likes of Summers and Geithners? Let's be real. After all, It is a prerequisite for any meaningful change. ;-)
What is to be done? If Mr. Obama refuses to call the Republicans' bluff and gives in to their current hostage-taking, he will in effect be collaborating with the Republicans and participating in large-scale budget-cutting that will amount to a dismantling of the New Deal. If this hostage-taking succeeds, other threats will follow every few months until most or all of the New Deal legacy is deconstructed. This would be completely unacceptable from a Democratic president. If Obama refuses to stand up to the Republicans and say No! to them, while explaining his reasons clearly to the public the way FDR did, then Obama is unworthy to be the Democratic candidate in 2012. He must either protect the New Deal or step down next year and run as a Republican or independent.
War, today, is something that Congress will authorize $600 Billion expenditures on at the drop of a hat, and the Wars are always increasing in number even as does the expense. Wars are not declared (although the Constitution demands this), nor are they re-authorized every two years (ditto). They simply happen. We've got at least four un-declared Wars going on now, with more popping up all the time.
And there's a very simple reason for this: Bribery.
Oh, no, they'll do anything at all to avoid having it be called "Bribery," knowing that Article 2 Section 4 lists this side-by-side with "Treason." They call it "campaign contributions," or "lobbying." Or, the Supreme Court simply declares (though it has no constitutional authority to do so...) that "Corporations" (never mentioned...) have the "constitutional" right of Freedom of Speech. Which means, of course, "$peech."
One day, a group of bankers got the bright idea that "the right of a sovereign state to 'issue money and to regulate the value thereof'" could be turned into Big Business ... for them.
Here's how: Instead of simply "printing money," the Treasury "issues securities" which are "backed by the Full Faith and Credit of the United States.(TM)" In other words, "you can't lose." And the reason why you can't lose is that the Treasury also "loans" banks the money with which to buy those securities ... at near-zero interest with an unlimited credit supply. An easy, obvious, two-stage shell game ... but it puts private banks squarely in the middle of the flow of cash.
"Fractional reserve banking" also means that banks can leverage those "assets" to issue loans to the tune of hundreds of times what they have "on reserve" (see preceding paragraph).
Politicians now feel that they are, and that they must be, in-bed with bankers ... who, of course, go to great lengths to $$ Make The Bed VeryComfy $$ ...
Thus, "the top two-percent of the world" make "all that money" while the rest of us seem to be, whether we are a person or a company or a US State, starving.
It isn't real. It's Rumpelstiltskin. But if "you've got $$ yours," human nature takes over.
Nothing will get done for the common man there. That is a lost cause!
They are all self serving crooks at best.
We keep expecting the Obama administration to take severe action against Wall Street corporate and bank execs, but it is not happening. It is really necessary to reinstitute the Glass-Steagall Act, and everyone at Goldman Sachs should be serving prison terms. Instead, they seem to own and control Obama. We are long overdue for a Constitutional convention, because it is apparent, things are not working to keep whatever integrity and confidence we had in our country from slipping away.
Sadly, the current president embraced Bush's bottomless bailout policy--not FDR's Glass-Steagall firewall.
Even at this late date, the Administration opposes Rep. Marcy Kaptur's HR 1489, which would re-instate Glass-Steagall.
As Ezra Klein at the WashPost noted--in an intended compliment to the current president and swipe at the current GOP--Obama's policies are those of a GHW Bush GOPer.
Obama--showing no sign of wanting to be a new FDR-is apt to meet GHW Bush's reelection fate.
As a demonstrated 'economic royalist' he deserves it.
I think you are right that Obama is not interested in being like FDR. He rarely uses FDR's name, and I've never heard him explicitly mention the New Deal, though he must have a few times. He wants to be a "compassionate" Reagan -- as you say, another Bush. As for reinstating Glass-Steagall, which is so hugely important and would significantly help to prevent another meltdown, it is the single biggest thing Obama could do if he were sincerely interested in reducing the deficit. By not supporting the reinstatement of Glass-Steagall, Obama is leaving the door open to another big recession in a very few years, a recession which will cost literally thousands of times the amount of the budget cuts he wants to make in essential social programs. The next recession will blow the deficit sky-high. Any president who does not support reinstatement of Glass-Steagall is irresponsible and not interested in serious deficit reduction. Last year Geithner-Obama opposed a bipartisan Senate bill to reinstate Glass-Steagall co-sponsered by Maria Cantwell, so he will probably oppose HR 1489 as well. Obama is a DINO.
There is NO truth anymore, nothing outside of personal morals, to believe in. No one, I repeat, no one is going to save you.
It's something we all must do for ourselves, and in doing so, we will recognize common directions and common goals to a just society.
It just isn't happening right now. And I don't think anytime in the foreseeable future.