The rulers of the exchange of mankind's goods have failed through their own stubbornness and their own incompetence, have admitted their failures and abdicated. Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men...
The money changers have fled their high seats in the temple of our civilization. We may now restore that temple to the ancient truths." --First Inaugural, Frankly D. Roosevelt, March ,4 1933
"I, like most of the American people, don't begrudge people success or wealth. That is part of the free- market system." --Barack Obama, February 9, 2010
It's open season on Obama whom so many hoped would lead us out of the neo-liberal wilderness. He once was a community organizer and ought to know how working people have suffered through a generation of tax breaks for the rich, Wall Street deregulation, and unfair competition. When the economy crashed he was in the perfect position to limit the unjustified pay levels on Wall Street and bring a crashing halt to the runaway financialization of our economy.
Instead we got a multi-trillion dollar bailout for Wall Street, no health care reform, no serious financial reforms whatsoever, record unemployment, and political gridlock that's will be with us for years to come.
Is it his fault? Or ours?
Obama has made his share of blunders. However, his statement that we "don't begrudge" the high salaries on Wall Street because that's part of the "free-market system" is about the dumbest thing he's ever said.
He was referring to Jamie Dimon's $17.4 million payday, and Lloyd Blankfein's $9 million. But surely the President knows that at this very moment Wall Street is still receiving $10.4 trillion (not billion) in subsidies from the taxpayer -- and that's after the TARP repayments. That's some free-market.
Dimon's JP Morgan Chase still has a $34.3 billion subsidy, and Blankfein at Goldman Sachs is sitting on $23.9 billion of government welfare. (Many thanks to Nomi Prins for her first rate sleuthing. )
Dimon and Blankfein would love to re-write history so that they could be portrayed as swashbuckling entrepreneurial survivors, men who avoided the bad risks that felled so many others. But without government welfare their institutions would have gone under. They are two very lucky (and well connected) welfare recipients -- lucky not to be among the 28 million Americans that go without jobs or are forced into part-time work.
What's even more ridiculous is what I call the A-Rod Defense: baseball players make a lot of money so we shouldn't get bent out of shape when financial executives make a lot too. That's the American way.
Bad example. Baseball teams also receive taxpayer welfare. Their stadiums often are blessed with enormous tax breaks and subsidies. And the league is exempt from anti-trust provisions. Baseball is a legally authorized oligopoly -- no surprise, then, that the participants have a lot of money to play with.
But ask yourself this: How many people can play baseball like the best major leaguers? How many equally good players are lurking in the minor leagues who could do what A-Rod does with or without steroids? One? Two? None?
Then ask yourself, how many people on Wall Street could step in to replace Blankfein and Dimon? One hundred? one thousand? ten thousand? Couldn't thousands of other executives also have presided over the worst crash since the Great Depression?
And here's one more fact. Baseball players, whether they are worth it or not, don't crash our economy. They don't create vast casinos based on fantasy finance instruments that turn toxic. They don't suck up 35 percent of all corporate profits. They don't create losses that induce unemployment on millions of Americans. But our Wall Street executives did all that and more. They are in the job killing Hall of Fame.
Blankfein and Dimon salaries are a diversion from the bigger story: Wall Street has awarded itself a record bonus pool of $150 billion -- a pool that would be zero were it not for our bailouts. They rewarded themselves during the worst financial year since the Great Depression. How did we let that happen?
That's what FDR would be screaming about, not defending.
But while we're comparing Obama to FDR, we should also compare ourselves to the kind of activity that sparked the New Deal. Today we see no worker upsurge, no progressive revival, no mass movement in the streets among the unemployed and dispossessed like we witnessed in the 1930s. Obama faces no serious progressive pressure. Instead the Tea Party has emerged to grab all of the populist energy.
A right-wing populist movement was to be expected. FDR saw Father Coughlin, the radio preacher, galvanize a powerful populist force based on hatred of Jews and Wall Street. Huey Long gave Roosevelt fits with his "Everyman a King" demagoguery. But most importantly, these reactionary forces were more than balanced out by the labor movement that strengthened as workers poured into unions and into the streets.
What have we today? Rush Limbaugh, Glenn Beck, Sarah Palin and the Tea Party. What we don't have is a serious challenge from the progressive side of the spectrum. We don't have an alternative vision to the billionaire bailout society. We don't have a clear agenda to push onto Obama. And we sure as hell don't have a mass movement that could enforce it.
We can moan all we want about Obama's shortcomings, the mistakes his Administration has made and his inability to take on Wall Street. But we haven't exactly applied a lot of heat. A million people on the mall demanding "Jobs Now" along with serious Wall Street reforms might help. A million people showing up repeatedly might actually get the job done. Why have we forgotten how to build a mass movement just as the Tea Party shows that it can be done?
The free market on Wall Street is dead and has been for a long time. It's been replaced by a billionaire bailout society that will provide decades of chronic unemployment and on-going bailouts for the super-rich.
It's a damn shame Obama can't deal with it. It's a bigger shame that we won't force him too.
Les Leopold is the author of The Looting of America: How Wall Street's Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About It Chelsea Green Publishing, June 2009.
Follow Les Leopold on Twitter: www.twitter.com/les_leopold
Simon Johnson: Obama Still Doesn't Get It
This isn't a free market. It is rather one of the most complete instances ever of savvy businessmen capturing a state and the minds of the people who run it. Is this really what the president seeks to endorse?
You go first.
In Mexico in the mid-'90s Wall Street engineered a currency coup that tripled the debt owed by small businesses and family farms and also allowed for them to be massively ratejacked on top of it. Mexicans consequently formed the "el Barzon" movement and pushed back Wall Street and deposed their ruling party of 60+ years. In this country YouTube phenom Ann Minch has already declared the debtors' revolt and begun going after them (http://www.debtorsrevoltnow.com).
If you've been pushed under, you can read my book for free: http://www.scribd.com/doc/25443175/Debt-Hope-Down-and-Dirty-Survival-Strategies-Evaluation-Version-Complete
2. Government's incestuous relationship with Wall St. is what has lead us to the collapse and systemic gambling with highly leveraged securities. That relationship existed in the 90's... right thru Bushie and now on into Barack's term. Government FORCED Wall St. to make bad loans, and Wall St. came up with a tragicly flawed way to try and deal with them... Dems and Repubs are both to blame for that.
3. The reason there is no "mass movement" on the left is because there percentage of the population that identifies themselves as "liberal/progressive" is small and shrinking. The agenda to strengthen government to control Wall St. wrongdoing (popular) has merged with the agenda to have governement control Main St.'s choices to drive what they want, eat whatever they crave, and use whatever light bulbs they like without being taxed for their "social" sins. (unpopular)
I've said it before and I will say it again...Who/Whom do you believe it was that got Obama elected? There WAS a movement during the '08 campaign. I believe the great "shutdown" came when we started to slowly realize that uh maybe Obama wasn't the great Progressive candidate we all thought he was. Every time we would organize to shake Washington up...Obama and his team (of one...Rahm) would shut us down. All of a sudden we were frickin' re tards, and maybe if we ignore them long enough they will go away...after all...where COULD they go? To the Rebubs? Hahahahaha. Why get behind someone who is trying to ignore you at every turn?...THAT is what will make the Repubs take everything back, and Obama will give them the key.
"Who/Whom do you believe it was that got Obama elected? "
It was independents, an unprecedented youth vote, and yes, also Progressives. But not exclusively Progressives. You don't get to "own" the Presidency because you voted along with a lot of other folks.
"...the great "shutdown" came when we started to slowly realize that uh maybe Obama wasn't the great Progressive candidate we all thought he was."
Obama never campaigned as the "Great Progressive Hope". If you listen to his speeches, and read a book of his you'll realize Obama has ALWAYS had criticism for the left as well as the right.
So now that it turns out Obama isn't everything that Progressives had projected upon him, the Progressive response seems to be to give up. Take the ball and go home. Withdraw from the process, instead of standing up to fight and march and organize and email and call. I'm sorry but apathy is useless and pathtic as a response to dissapointment. It shows that Progressives aren't really serious about bringing about change, they're just waiting on someone else to do the dirty work for them (i.e. President Obama).
Come November the tea party whackos will make further gains, and we'll all live to regret it. But hey--at least it'll be great fodder for more angry apathetic posts on HuffPo. No doubt.
In the 30's, it was still possible to believe that government could solve problems; that it could right the ship and restore our economy.
But since Reagan, the people have been fed a myth: Government is the problem, not the solution,." and no one has had the courage to confront that myth. As a result, it has grown form a slogan to an accepted fact.
So now, we look around for a savior and find none.
Until progressives bust Reagan's myth, there are no solutions and there can be no mass movement.
All it would take are a few leaders to have the courage to stand up and confront the toxic residues of Reaganism that infect this country. To point out that government delivers better health care at lower costs; that it delivers the world's most effective retirement and disability program at a fraction of the cost that the private sector does; that it creates more new medicines; more new energy technologies; etc etc etc.
To point out that unconstrained capitalism is a curse, not a blessing; to point out that those who pretend otherwise to so in order to rob us, cheat us, and otherwise bilk us from wiealth that is rightfully ours.
I'm not saying that absence of regulation will fix the situation, I'm just saying we need a system with checks and balances that protect the public from co-opted regulators, and while curbs on lobbying and campaign spending by big corporations might be a good start, that won't do it either.
It is, as you say, the fact that the private sector has no checks upon it. If corporations existed in anything like their current state when the Founders were writing the Constitution you can bet they would have put in checks and balances to curb their power.
Remember, the reason we had unprecedented growth in the 50s, 60's, 70's and a good part of the eighties was the fact that the financial sector was well-regulated and transparent. That's why foreign money flowed into American securities markets.
But if you look at indices of market volatility, they skyrocket, bouncing around like a yo-yo after Reagan yanked us rightward and deregulated us.
Wages flatlined and wealth began to get concentrated into the extreme upper income brackets.
Don't get fooled by the regulations are bad meme -- Reaganism is a toxic disease spread by corporate interests and the uber-rich -- a sheeps coat on a predatory policy.
UNIONS AREN'T DEAD--though some should be. The problem is, that WRONG Unions are in rapid decline. The trade-unions, whom have an important part in American industrial and manufacturing are is free-fall.
Unfortunately, the despicable Public Sector Unions, SEIU, and the godawful Teacher's Unions are thriving. And their grotesque excesses are tarninshing the laudable legacies of UAW, Teamsters, IBEW etc.
Dump the pocine slop-bucket feeders of SEIU, Pub. Sector and Teachers Unions, and many Americans will re-evaluate their opinions of the role of Unions in the economy and the body politic.
Until then, NOTHING. Mom always said, you are defined by your freinds. The Trades have made common-cause with vultures.
QUESTION: Let's talk bonuses for a minute: Lloyd Blankfein, $9 million; Jamie Dimon, $17 million. Now, granted, those were in stock and less than what some had expected. But are those numbers okay?
THE PRESIDENT: Well, look, first of all, I know both those guys. They're very savvy businessmen. And I, like most of the American people, don't begrudge people success or wealth. That's part of the free market system. I do think that the compensation packages that we've seen over the last decade at least have not matched up always to performance. I think that shareholders oftentimes have not had any significant say in the pay structures for CEOs.
However, I do understand and agree with Mr Leopold's point that we all need to stop waiting for someone else to fix our problems and get active in the process. The Livid Left loves to complain but I don't see anyone marching on Washington or demonstrating in support of health car reform. If health care reform, regulatory reform and the jobs bill die we'll have no one but ourselves to blame.
We live in a nation of 300 plus million people SOMEONE CAN address this toil in a concise way. You are just too preoccupied with status quo to do it yourself. sulking in our latently preceived impotence and being passive aggressive about our diminishing virtues wont cut it. it is sad watching the same drivel pass off for dialog complaining is the new dialog, well, complaining about complaining, and placing "responsibility" and appropriate niceties like apologizing. what ever happened to righteous indignation since politicalization and dissent became mainstream; and what is the difference between Bush and Obama that you reward one with obedience and not other can some one explain that to me? And what about starting a bankers strike or a mobile city to city food bank or....
if access is control then we should start a network that feeds into an organization. it could be as easy as a chain letter and a website that collects email addresses; to prompt a specific concerted action; be it a boycott, a congregation, or an internet forum. then you get to the neat stuff, like organizing resources. Heck, we could start our own housing lottery!