Blog Archives

The Machiavellian vs the Proletariat – whose economy is it, anyway?


“You sit around here and you spin your little webs and you think the whole world revolves around you and your money. Well, it doesn’t, Mr. Potter. In the whole, vast configuration of things, I’d say you were nothing but a scurvy little spider!” – George Bailey, from the 1946 film, “It’s a Wonderful Life

In this crazy capitalist, consumer-driven economy of ours, you can be the populist hero George Bailey or the manipulative banker, Mr. Potter. Mitt Romney and his surrogates, want to remind you, though, that even George Bailey was a money lender. His Building and Loan went broke because Potter called in the note, and there was no money when the people came for it. In 2008, according to Mitt Romney’s friend and colleague at Bain Capital, Edward Conrad, it was the investors who panicked and caused a run on the banks, wanting their return when the short term investments didn’t pay off.

“The banks did what we wanted them to do,” Conrad said in a recent interview with New York Times writer, Adam Davidson. “They put short-term money back into the economy. What they didn’t expect is that depositors would withdraw their money, because they hadn’t withdrawn their money en masse since 1929.”

According to Conrad, the system was working. Davidson writes:

“[Conrad] argues that collateralized-debt obligations, credit-default swaps, mortgage-backed securities and other (now deemed toxic) financial products were fundamentally sound. They were new tools that served a market need for the world’s most sophisticated investors, who bought them in droves. And they didn’t cause the panic anyway, he says; the withdrawals did.”

Hancock-Bain bldg

John Hancock Tower, Boston, MA, home of Bain Capital
(from RhythmicQuietude, through Creative Commons)

You see, to Edward Conrad, we are just poor, dullard consumers who don’t get the value of the “investor class” (aka the 1%) to our economy. “Most citizens are consumers, not investors,” he told Davidson. “They don’t recognize the benefits to consumers that come from investment.”

Davidson interviewed Conrad in advance of the publication of his book, “Unintended Consequences: Why Everything You’ve Been Told About the Economy Is Wrong.” Davidson characterizes the pro-bank, pro-wealth disparity scree with the anti-blurb, “This could be the most hated book of the year.”

Conrad ignores the many other factors that played a role in investors wanting their money back. Manufacturing has been leaving this country in droves since 1970s, and according to PolitiFact, no president lost more manufacturing jobs than George W. Bush – over 430 million per year he was in the Oval Office. Yet Bush insisted that Freddie Mac and Fannie Mae work with conventional lenders and community groups, “such as the National Urban League, the National Council of La Raza, ACORN(!) and others,” to get people into “a home of their own,” even if they couldn’t afford it, as a stepping stone to the “American Dream.”

More homes being bought meant more loans. More loans meant more money for banks. Eventually, they started bundling the loans together in units and selling those. When the investors Conrad says made a run on the banks for their money, it was partly because the siphoning off of manufacturing jobs caused consumers to lose confidence, and real small businesses (not small corporations that wore the moniker for the funding) began to lay off people. Notes couldn’t be met, homes were lost through default, and as the defaults increased, those who held the notes began to panic. So it was a loss of jobs, and the resulting loss of consumer capital, that caused the economy to collapse.

Conrad has proposed what could be called the anti-Dodd-Frank legislative step of “creating a new government program that guarantees to bail out the banks if they ever face another run,” Davidson says. Does Conrad’s pal, Romney, really think that the public wants banks to receive guaranteed bailouts every time there’s a colossal financial system fuck up? How would they sell that to the Tea Party folks, who hate the Bush bank bailouts?

Davidson’s interview with Conrad reveals that people like him see people as either the innovative, risk-taking investment class, or as “art history majors,” who seem unwilling to put forth the effort to succeed. He claims that there should be more people like him, and they should be making double the money they do now, disparity be damned. To him, it seems, you’re either in a yacht, or your treading water. Tread harder, because a rising tide may lift all the boats, but unless you innovate a floatation device, you’ll drown, which Conrad would probably say, in the whole vast configuration of things, is your own fault.

-PBG

Shaken confidence: U.S. culpability in a post 9-11 world


9/11 attacks in New York City. (US National Park Service)

American resolve formed around the twisted steel ruins of the World Trade Center in Lower Manhattan in 2001, like 15-ton concrete blocks around re-bar. Our determination to avenge the acts of September 11 was certainly not a question. What should have been questioned at the time and wasn’t, was how we would react as a nation, after the shock, after the dust, after the sun rose on the twelfth and there were holes in the New York City skyline, the Pentagon in Washington, D.C., and a field in rural Pennsylvania.

Hearts began to heal, even then, for those of us who were not directly affected by loss of a beloved family member, though as a nation, for weeks, palpable sorrow rode over us in waves, like bands of a fading hurricane. We had weathered the eye of the storm, and though buffeted by its aftermath, we would have found our own way to heal. Still, the government sought to intervene on our grief, distract us from our sorrow. They told us to behave as if nothing had happened, nothing to worry our pretty little heads about. Like a father who doesn’t want to bother his young children with difficult realities, we were told to “go shopping.”

At that point, the wall of American resolve segmented. Our willingness to stand together as a nation of guaranteed Constitutional liberties was broken. Instead of one, united wall, standing on the shoulders of our founding fathers, of the greatness of our Republic, our leaders gave in to the inevitability of war, the justification of hate, the easy propaganda of a public willing not to have to understand what happened.

“A great people has been moved to defend a great nation,” George W. Bush told the country that night. “Terrorist attacks can shake the foundations of our biggest buildings, but they cannot touch the foundation of America. These acts shatter steel, but they cannot dent the steel of American resolve. America was targeted for attack because we’re the brightest beacon for freedom and opportunity in the world. And no one will keep that light from shining.”

But if one were to ask Osama bin Laden why he organized the attacks, he would not have said, “I wanted to extinguish the freedom the infidels represent.” His motives were more political than cultural. Having characterized the attacks that way, though, Bush made it possible for our government to begin dismantling those very freedoms of which he spoke, and blame it on the terrorists. His administration could then characterize its subsequent freedom squashing actions of torture, rendition and wiretapping, of invading Iraq, as a godly fight against “evil-doers,” and necessary.

President Bush and his administration’s springboard reaction was predictable, and the enemy who attacked us was counting on it. Though the world stood with us as brothers against the wanton destruction of lives, and the disruption of commerce the events of 9/11 brought, there were concerns that, in its reaction, a power as great as the United States could potentially abandon the concept of America as “guardian of liberty,” and engage in some wanton destruction of her own.

European newspapers were saying, within a week of the attacks, that although the old world saw the coalition building Bush was engaged in as a good sign, “The ‘war against terrorism’ is no licence to kill,” and “that even in Europe there are reservations about the US’s policy.” Unchecked, a military power like ours, combined with our immaturity as a nation, had the potential to subvert the peace of the entire planet.

Our elected representatives, afraid of appearing dovish, authorized two wars and the liberty limiting Patriot Act. Our check on political power, the radio, television and the newspaper agencies, afraid of appearing as unpatriotic outliers, asked only who we were going after and when. Few asked why.

Those who questioned our leadership’s course of action were quickly blackballed, black listed, really. Less than a week after the attacks, comedic pundit Bill Maher’s ABC-TV show, Politically Incorrect, was cancelled shortly after he called President Bush out, for calling the attacks “cowardly acts.”

“We have been the cowards,” insisted Maher, “lobbing cruise missiles from 2,000 miles away. That’s cowardly. Staying in the airplane when it hits the building, say what you want about it, that’s not cowardly. Stupid maybe, but not cowardly.”

Bush and Dick Cheney have said many times that “history will decide” whether their administration’s policies  were necessary for the country and good for the world.  This anniversary is not just a time to reflect on the tragedy of what happened on that bright, Tuesday morning, ten years ago. It is a time to ponder the tragedy of what has happened to our country since: increasing intolerance; attacking the construction of mosques in communities where Muslims have lived for decades; the rise of Christian Dominionism; anti-immigrant paranoia; candidates who would have been considered part of a lunatic fringe twenty years ago are suddenly mainstream; and we continue to fight the longest wars in our history.

“While fighting a war with al Qaeda, America has waged a political war with itself,” the Rand Corporation‘s terrorism experts observed in a report released this past July. “This is nothing new in American life…[b]ut the shadow of 9/11 across America has exacerbated the internal conflicts. Fear may lie at the heart of much of America’s response, just as the terrorists intended. But the terrorist attacks have…if anything…magnified the extremes within America, from the isolationist impulse to go it alone to the internationalist impulse to remain a beacon of freedom for the world, from the reluctance to engage to the desire to sort things out. In what could be the final legacy of 9/11,” the Rand report continues, “the terrorist attacks have compelled America to become an exaggerated version of itself, with its own internal contradictions heightened and intensified.”

History, then, will not only judge the merits of our leaders and where they took us; it will also decide how far we allowed our country to be taken from the ideals in which the founders of this country believed, and for which, generations of Americans have fought and died. Who stood? Where did they stand? What did they do when they stood there?

On September 11, 2001, members of Congress stood on the steps of the Capitol and sang, seemingly spontaneously, “God Bless America,” in unison. It was, arguably, the high point of national unity that horrible day. We all stood with them.

Where did you stand, and what are you willing to do now to restore America as a beacon of liberty?

One World Trade, aka Freedom Tower, and other construction at Ground Zero, the corner of Liberty St. & Greenwich St., New York City. (June 2, 2011, by PBG)

-PBG

The ebbing tide of war


swimming to afghanistan

“…tonight, we take comfort in knowing that the tide of war is receding.” – President Barack Obama, announcing the first Afghanistan withdrawals, June 22, 2011

For 10,000 American men and women, their boots are wet as they stand in the sand of the ebbing, bloody sea. Soon, they will turn and march for home. Obama calls it bringing “these long wars…to a responsible end.”

Sounds civil enough, very, um, responsible. Even if you disagree with the pace of the withdrawal that Obama proposed, Wednesday, it’s hard to argue with being a “responsible” commander-in-chief. Hard to argue, but apparently not impossible, if you’re running for that title.

Declared GOP 2012 candidate Tim Pawlenty almost broke out the old “cut-n-run” whimper that was prevalent under Bush 43.  He told Fox News’ Bill O’Reilly that “a responsible end” was not the “outcome” Americans prefer. “When America goes to war,” he said, “America needs to win.”

Yep, Americans should not leave until we hand Karzai the keys to a gold Cadillac, that he can take down to the A&P without getting shot. Politico’s Alexander Burns called Pawlenty’s reaction “the full Douglas MacArthur.”

Politico also reported that candidate John Huntsman, the former governor of Utah, wanted a faster paced withdrawal, and that Mitt Romney didn’t commit (shock!), one war or another, vaguley slamming what he called “an arbitrary timetable.”

For all that, having only a third of the troops out by the end of next year seems not to go far enough in getting us out of there by 2014. The president claims that this is “a more centered course” and “we must be as pragmatic as we are passionate; as strategic as we are resolute.”  He may be right, but the fact remains, we shouldn’t have been there this long.

Obama acknowledged, in his plan, that “even as there will be dark days ahead in Afghanistan, the light of a secure peace can be seen in the distance.” Maybe, but if you’re a soldier at sea in that ebbing tide, that light on the shore can keep moving farther and farther away. For them, the coming peace still feels a lot like war, because when they wake up, they are still in Afghanistan. When they eat breakfast at the mess, they are still in Afghanistan. When they go on patrol, they are still in Afghanistan. From morning to morning, and night to night, they are still in Afghanistan.

Please bring them home, soon and safely.

-PBG

Follow

Get every new post delivered to your Inbox.

Join 513 other followers

%d bloggers like this: