Since the Clinton administration I have repeatedly warned about the triumph of Wall Street and the defeat of Main Street, the destruction of the Middle Class and the dismemberment of the poor; acts of economic terrorism that undermine the very foundations of our democracy - for no democracy can long stand when the ratio of executive to workers pay is 344-1, as various studies have consistently shown.
Five days before last November's election I predicted Barack Obama would be elected president -- and it wouldn't be close. He was and it wasn't. He came to the presidency on a rising tide of hope. For many Americans, but especially those of a certain generation, he brought an excitement unknown since John F. Kennedy. For young Americans, voting for the first time, he awoke a critical interest in the affairs of state.
Fair-minded Americans knew following eight-years of George W. Bush Senator Obama would face some of the most intractable problems to ever confront a new president. From a shattered economy and a demoralized work force, from wars in Iraq and Afghanistan, from 50 million Americans without health care and failing schools, in these unprecedented circumstances, only those stunted in soul and shriveled in spirit would deny Mr. Obama their best wishes, prayers and support.
Having greatly desired Mr. Obama and Mr. Biden's victory over Mr. McCain and Ms. Palin, believing the very fate of our republic was at risk, I have no desire to unjustly criticize the president -- especially given the daunting challenges he faces.
Moreover, amid all these consuming difficulties, President Obama has demonstrated a rare intelligence and grace, a spirit of forgiveness and acceptance toward his political opponents that is simply striking (there are times, however, when one wishes less for Barack Turn the Other Cheek Obama and more Barack Drive the Money Changers out of the Temple Obama).
Historians tell us it's difficult to judge a president in eight years, much less eight months. That's a given, but there is one area where it is possible to make a preliminary judgment; indeed, where it is imperative that judgment be made - Mr. Obama's glaring failure to break decisively with the economic policies of his predecessors.
Those failed policies, arising from misguided faith in free markets, a faith attributed to Milton Friedman and the Chicago School of Economics, and uncritically accepted by Ronald Reagan, and embraced thereafter by Presidents Bush 41 and 43, and shamefully by Bill Clinton and his allies at the Democratic Leadership Council (DLC), led directly last fall to the near catastrophe collapse of the world's financial markets.
There is wicked irony that those who championed "free markets," who prostrated themselves before the God of Capitalism, who proclaimed a new gospel that "greed is good," who prevailed upon a gullible public that Wall Street was infallible, while decrying Government interventionism as oppressive, that in the end, when the world stood on the abyss of financial ruin, the causation for which they bore direct responsibility, that in that moment of ultimate peril, they should turn to government as the means of their salvation - and find it in a $1.7 trillion bailout! (To invoke "hypocrisy" in such a context only exposes the inadequacy of words to damn.)
At the outset of his presidency, when he named Timothy Geithner as secretary of the Treasury and Larry Summers as his director of National Economic Policy, there was fear Mr. Obama would not take the drastic steps necessary to change market dynamics to reflect a new world of economic reality. That fear was well founded, for both Mr. Geithner and Mr. Summers, during Mr. Clinton's presidency, were at the very center of the policies that would evolve into the world's gravest economic threat since the Great Depression.
There is nothing in either Mr. Geithner's or Mr. Summer's portfolios that would lead one to believe they understand the collapse of Main Street or the crumbling of Middle Class America. They are creatures of Wall Street, which is to say that they believe in its ability to make whole the economic ills of our society. In that belief they are mistaken - and by that belief this nation's future is now in danger, in ways not even approximated by the Great Depression. (Yes, I know Dr. Summers was president of Harvard, but he was a failed president of Harvard.)
But I worry no less about Ben Bernanke as head of the Federal Reserve. Yes, he's an improvement over Alan Greenspan - how could he not be better than Mr. Greenspan? - but despite his impressive academic background at Princeton, he appears too dazzled by Wall Street to prove an effective counter; that he too, not unlike others, is victimized by a belief that in immense wealth are found individuals of superior intelligence and knowledge. But the test of Wall Street and Washington isn't ultimately about intelligence but moral values - and what has been revealed is a corruption so vast even Christian charity is constrained to forgive.
Recently at a conference of the Federal Reserve in Jackson Hole, Wyoming, Mr. Bernanke said the U.S. economy is on the "cusp of recovery." He added that economic activity both there and around the world "seems to be leveling out, and the economy is likely to start growing again." Based upon his summary view Wall Street rallied - and summery was the sprit of Americans that day. (Probably not.)
Mr. Bernanke notwithstanding, the economy isn't coming back.
The American economy cannot come back, until such time as jobs are found for the millions of Americans out of work -- and I do not mean jobs at Wal-Mart or McDonald's. I mean jobs adequate to the income needs of the middle class; jobs that include money for mortgages and health care; money for clothes and college tuitions; money periodically for vacations and maybe a new car; money sufficient for contributions to church and charities - and jobs that give the poor among us hope for a brighter future.
Can anyone be found, anyone, inside the Obama administration or outside in the private sector, who's talking about jobs adequate to meet these needs? No one is talking about such jobs, because no one knows when or whether such jobs will be available to our citizens. It is the truth they dare not speak.
But this crisis is about more than jobs, for at its core is the vast income disparity that began under Mr. Reagan and has gown exponentially. There is no moral justification for some people making millions and millions of dollars while others labor in economic purgatory.
Amid all of this the working class, men and women of quite courage and unsung heroism, the very foundation upon which America stands, the people who fought our wars, built our cities, educated our children, healed our sick, cared for our elderly, gave generously to people in need, that working class, saw real income decline and futures placed at risk.
And while they were losing income they witnessed the wealthy and the privileged, those driven by insatiable greed and moral turpitude, driven to buy bigger houses (like the childless couple in Connecticut who own a 37,000 square foot house), faster automobiles, sleeker private jets, not one or two but three or four vacation homes, designer clothes, cosmetic surgery and personal trainers, becoming in the process, the adoring objects of too many politicians of both major parties; a political class blinded by the glitz and glamour of those who bankrolled their campaigns; politicians who stupidly embraced the folly of equating wealth with wisdom, big bank accounts with ethical and moral values, and who, amid the stupor of their adoration, made the fatal mistake of allowing unregulated markets.
If you have a shred of decency you cannot argue it is acceptable for executives to make 344 times that of the average American worker. You cannot argue it is acceptable that in 2007 50 hedge fund managers made 19,000 times more money than the rest of us. You cannot argue it is acceptable that executives of Bear Sterns were paid egregious sums, which otherwise divided among company employees would have resulted in year-end bonuses of $90,000. You cannot argue it is acceptable that Kerry Killinger, the fired CEO of Washington Mutual, made $14 million, while his successor sells out to J.P. Morgan and receives $19 million in salary and severance pay for three weeks work - which Senator Bryon Dorgan of North Dakota says would take the average American worker at $50,000 a year 382-years to equal!
Which the senator, in justifiable anger went on to say on the floor of the U.S. Senate, "Unbelievable. Absolutely unbelievable. But it is a hood ornament on a carnival of greed that has existed now for some while, unabated, in which people at the top have made massive quantities of money. Then the whole thing comes crashing down because they began creating exotic securities that were supported, in some cases, by worthless mortgages, placed by bad brokers and, in some cases, bad mortgage companies; sold up the chain to hedge funds and investments banks, all of them making massive quantities of money, and then it goes belly up and everybody wonders why."
It matters not your politics or economic philosophy; whether you worship Adam Smith or John Maynard Keynes; whether you voted for Barack Obama or John McCain, the issue of vast income disparity threatens our democracy -- and it cannot be defended. And, if you are reading this and are a person of wealth and assume this isn't about you, it most assuredly is about you, because in the end this is about all of us -- and the America we say we love.
How do we fix the problem of income disparity? How do we bridge our economic divide? Do we take from the wealthy and give to the poor? That may have worked in Sherwood Forest and the mythical world of Robin Hood, but this is the real world and that can't happen -- nor should it.
The options before us are limited, but there's a chance a wise and vigilant government, one that understands the danger of uncontrolled markets and man's insatiable greed, a government that strives to restore balance between executive and workers pay, only that form of government can extricate the U.S. from the financial black hole into which it has plunged.
The president, at whose desk the buck stops, has not yet made the commitment to impose the tough regulations required to change market dynamics -- and unless he does so his administration will fail; but such a failure would be of secondary consequences, for it will mean America has failed - and that is failure we cannot accept.
Finally, in the September 21 issue of The New Yorker, James B. Stewart wrote about the battle to save America from the economic Armageddon that loomed. In was inside reporting at its best (even if one is left wondering who were his sources, if not the very people he quoted?).
Following a meeting at the height of the economic meltdown, Mr. Stewart quotes President George W. Bush, as asking Treasury Secretary Henry Paulson and Fed chairman Ben Bernanke. "How have we come to this point where we can't let an institution fail (AIG) without affecting the whole economy?"
The Treasury secretary and the Federal Reserve chairman sought to explain to the president the market's massive failure. Then the president said:
"Someday you guys are going to need to explain to me how we end up with a system like that. I know this is not the time to test them and put them through failure, but we're not doing something right if we're stuck with these miserable choices."