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.