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Suck on This

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Notes from a nation in which the wealthy and powerful increasingly act with near impunity and the lesser off just have to "suck on this" -- in the immortal and unwittingly apt phrase of one of our elite pundits.

1) Last week, former Fed Chairman Alan Greenspan weighed in on the wisdom of free markets and invisible hands:

"Today's competitive markets, whether we seek to recognise it or not, are driven by an international version of Adam Smith's "invisible hand" that is unredeemably opaque. With notably rare exceptions (2008, for example), the global "invisible hand" has created relatively stable exchange rates, interest rates, prices, and wage rates."

Lots of people had fun with this statement, including Henry Farrell and his readers at Crooked Timber. Among their efforts to contextualize Greenspan's remarks:

"With notably rare exceptions, Newt Gingrich is a loyal and faithful husband."

"With notably rare exceptions, Charles Manson has lived a peaceful life"

"With notably rare exceptions, Germany remained largely at peace with its neighbors during the 20th century."

In 2008, Alan Greenspan acknowledged that he found a "flaw" in his ideology about how markets work. Happily for him, it appears that he has recovered his former self-confidence. So, Greenspan presided over a calamity with devastating consequences for millions but no personal "skin" in the game and has managed to forget whatever remorse or sense of self-reflection about the consequences of his actions he might have briefly entertained. As for the people who have suffered the actual consequences: Naturally, they can "suck on this."

2) Here's a notable tidbit about Transocean, Ltd., the company whose rig exploded last Spring, causing the Gulf oil disaster:

"Transocean Ltd. gave its top executives bonuses for achieving the "best year in safety performance in our company's history" -- despite the explosion of its oil rig that killed 11 people and spilled 200 million gallons of oil into the Gulf of Mexico."

I trust no comment is necessary here.

3) This week, the Supreme Court handed down a 5-4 decision in which it determined that John Thompson, who was wrongly convicted of robbery and murder and spent eighteen years in jail in Louisiana, including fourteen on death row, was not entitled to compensatory damages, despite the fact that Supreme Court precedent deems it a constitutional offense to knowingly withhold exculpatory evidence (which happened at several points in Thompson's case). The majority opinion, written by Justice Thomas and a concurring opinion penned by Justice Scalia argued that only one person - in apparent willful denial of the actual case record - was guilty of withholding evidence and that this wasn't the DA's responsibility. Slate's Dahlia Lithwick described Thomas' and Scalia's opinions as a "master class in human apathy." Of course, why should they care about whether Thompson receives justice? He's just a loser-nobody, after all.

4) On ABC's This Week on Sunday, former Bush administration spokeswoman Torie Clarke repeated the incessant meme that businesses aren't investing or hiring because of "uncertainty," despite there being no credible evidence for that supposition. Recall that a key premise of capitalism is that there is a fundamental relationship between risk and reward, which drives innovation, progress and wealth creation. Notwithstanding this basic premise, wealthy corporations are sitting on record piles of cash, making record profits, doling out record bonuses and still we're hearing that these poor babies are unable to act because there might be new taxes someday, or new regulations or new trade agreements. In other words, what we once called "life" has now been re-defined as intolerable and paralyzing uncertainty.

This is, of course, in stark contrast to the message that ordinary workers, unionized and otherwise, receive every second of every day: your lives are too secure; you need to learn how to live within more modest means, like "everyone" else; that a generous welfare state is too indulgent, disincentivizing people from entering the crucible of competition and, yes, uncertainty, that makes our magnificent system the extraordinarily productive beast it has always been. Corporations cannot be expected to be productive unless they have an entirely predictable playing field on which to act. Ordinary workers cannot be expected to be productive as long as they face an entirely predictable playing field in which to act. In other words, message to corporations -- we're sorry to trouble you in anyway (remember Congressman Joe Barton's pathetic apology to BP last year?). Message to workers - "suck on this."

5) William Greider's article in the latest issue of The Nation documents the degree to which the Justice Department is increasingly giving a pass to large corporations that have engaged in potentially criminal misconduct.

The New York Times reported last year that federal judges were expressing mounting frustration with the sweetheart deals that prosecutors were cutting with big banks.

Along those lines, Greider quoted former Delaware Senator Ted Kaufman about the alarming degree of law-breaking and impunity from prosecution among our largest enterprises: "at the end of the day, this is a test of whether we have one justice system in this country or two. If we do not treat a Wall Street firm that defrauded investors of millions of dollars the same way we treat someone who stole $500 from a cash register, then how can we expect our citizens to have any faith in the rule of law?" Unfortunately, we already know the answer to that question. After all, Treasury Secretary Tim Geithner has dismissively said that calls for prosecuting wrongdoing in the financial collapse reflect a "very deep desire for Old Testament justice."

Geithner can rest easy, though. The fact that not a single financial executive has gone to jail in connection with the 2008 meltdown and that, instead, Wall Street received a massive bailout for its troubles, suggests that we're a very long way from realizing his deep-seated fears of public retribution.

Two nations, separate and unequal.

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