Subject: Memo to the Federal Government: Be Afraid of the People -- Be
VERY, VERY Afraid
"Financial elites OWN our government and both political parties.
Their lobbyists control Washington. They've used their ownership of
our government to abolish decades-old legal and regulatory protections
which previously constrained what they could do. In the lawless
environment which they literally bought from our for-sale political
leaders, they were free to pillage and pilfer and steal without limit.
"And even now, after everything has come crashing down, they continue
to dictate what the government's response is, to guarantee that they
-- the prime authors of the disaster -- are the prime beneficiaries,
at the public's expense, of the so-called "solutions" that leave the
real, fundamental problem unsolved, designed instead to preserve their
ill-gotten gains and further increase their power and influence."
The virtues of public anger
.... and the need for more
Glenn Greenwald
Salon, March 21, 2009
http://www.salon.com/opinion/greenwald/
With lightning speed and lockstep unanimity, opinion-making elites
jointly embraced and are now delivering the same message about the
public rage triggered this week by the AIG bonus scandal: This
scandal is insignificant. It's just a distraction. And, most
important of all, public anger is unhelpful and must be contained or,
failing that, ignored.
This anti-anger consensus among our political elites is exactly
wrong. The public rage we're finally seeing is long, long overdue,
and appears to be the only force with both the ability and will to
impose meaningful checks on continued kleptocratic pillaging and deep-
seated corruption in virtually every branch of our establishment
institutions. The worst possible thing that could happen now is for
this collective rage to subside and for the public to return to its
long-standing state of blissful ignorance over what the establishment
is actually doing.
It makes perfect sense that those who are satisfied with the
prevailing order -- because it rewards them in numerous ways -- are
desperate to pacify public fury. Thus we find unanimous decrees that
public calm (i.e., quiet) be restored. It's a universal dynamic that
elites want to keep the masses in a state of silent, disengaged
submission, all the better if the masses stay convinced that the
elites have their best interests at heart and their welfare is
therefore advanced by allowing elites -- the Experts -- to work in
peace on our pressing problems, undisrupted and "undistracted" by the
need to placate primitive public sentiments.
While that framework is arguably reasonable where the establishment
class is competent, honest, and restrained, what we have had -- and
have -- is exactly the opposite: a political class and financial
elite that is rotted to the core and running amok. We've had far too
little public rage given the magnitude of this rot, not an excess of
rage. What has been missing more than anything else is this: fear on
the part of the political and financial class of the public which they
have been systematically defrauding and destroying.
* * * * *
These endless lectures from sober, rational pundits about the relative
quantitative insignificance of the AIG bonuses are condescending straw
men. Nobody thinks that $165 million in bonuses for the people who
destroyed AIG is what has caused the financial crisis. Nobody thinks
that recouping those bonuses or having prevented them in the first
place would solve or even mitigate systemic collapse. The amounts are
miniscule in the context of the broader economic issues. Everyone is
aware of that; nobody needs to have that pointed out. As Armando
astutely observed, the attempt now to dismiss the anger over the AIG
bonuses as the by-product of simple-minded ignorance and/or
ideological rigidity (class warfare! crass populism!) is quite
similar to how anti-war arguments were stigmatized before the attack
on Iraq : ignore the screeching pacifists and let the sober Experts
make the decisions, for they know best.
The AIG scandal is significant and has resonated so powerfully because
it is a microscope that enables the public to see what and who has
wreaked the destruction that threatens their security and future and,
most important of all, to realize that these practices haven't ended
and the perpetrators haven't been punished. The opposite is true:
those who caused the crisis continue to exert control over what
happens and continue to have huge amounts of public money transferred
in order to enrich them.
Eliot Spitzer is absolutely right that, even at AIG, there are far
larger scandals than the bonuses, such as the undiscounted
compensation of AIG's counter-parties such as Goldman Sachs (and just
by the way: it is indescribably symbolic that Spitzer has been
punished and disgraced for his acts of consensual adult sex while the
targets of his prescient Wall St. investigations, who basically
destroyed the world economy, remain protected and empowered). But the
bonus scandal is illustrative of why the crisis happened, who caused
it to happen, and the ongoing political dominance of the
perpetrators. It is, as Robert Reich put it, "a nightmarish metaphor
for the Obama Administration's problems administering the bailout of
Wall Street."
The financial crisis has merely unmasked the corruption and rot in our
establishment institutions that are staggering in magnitude and
reach. Just as the Iraq War was not the by-product of wrongdoing by a
few stray bad political and media actors but instead was reflective of
our broken institutions generally, the financial crisis is a
fundamental indictment on the way the country functions and of its
ruling class. What would be unhealthy is if there weren't substantial
amounts of public rage in the face of these revelations.
* * * * *
Matt Taibbi's new Rolling Stone article perfectly summarizes what the
AIG scandal reveals about our political and economic system, and
should be read in full. In sum: financial elites own the Government
and both political parties. Their money drowns Washington and their
lobbyists control it. They used that ownership of Government to
abolish decades-old legal and regulatory protections which previously
constrained what they could do. In the lawless environment which they
literally purchased from our political leaders, they were able to
pillage and pilfer and steal without limit. And even now that
everything has come crashing down, they continue to dictate what the
Government's response is, to ensure that they -- the prime authors of
the disaster -- are the prime beneficiaries, at the public's expense,
of the "solutions," solutions which preserve their ill-gotten gains
and heighten even further their power and influence. Taibbi:
The real question from here is whether the Obama administration is
going to move to bring the financial system back to a place where
sanity is restored and the general public can have a say in things or
whether the new financial bureaucracy will remain obscure, secretive
and hopelessly complex. It might not bode well that Geithner, Obama's
Treasury secretary, is one of the architects of the Paulson bailouts;
as chief of the New York Fed, he helped orchestrate the Goldman-
friendly AIG bailout and the secretive Maiden Lane facilities used to
funnel funds to the dying company. Neither did it look good when
Geithner — himself a protégé of notorious Goldman alum John Thain, the
Merrill Lynch chief who paid out billions in bonuses after the state
spent billions bailing out his firm — picked a former Goldman lobbyist
named Mark Patterson to be his top aide.
In fact, most of Geithner's early moves reek strongly of Paulsonism.
He has continually talked about partnering with private investors to
create a so-called "bad bank" that would systemically relieve private
lenders of bad assets — the kind of massive, opaque, quasi-private
bureaucratic nightmare that Paulson specialized in. Geithner even
refloated a Paulson proposal to use TALF, one of the Fed's new
facilities, to essentially lend cheap money to hedge funds to invest
in troubled banks while practically guaranteeing them enormous profits.
God knows exactly what this does for the taxpayer, but hedge-fund
managers sure love the idea. "This is exactly what the financial
system needs," said Andrew Feldstein, CEO of Blue Mountain Capital and
one of the Morgan Mafia. Strangely, there aren't many people who don't
run hedge funds who have expressed anything like that kind of
enthusiasm for Geithner's ideas.
As complex as all the finances are, the politics aren't hard to
follow. By creating an urgent crisis that can only be solved by those
fluent in a language too complex for ordinary people to understand,
the Wall Street crowd has turned the vast majority of Americans into
non-participants in their own political future. There is a reason it
used to be a crime in the Confederate states to teach a slave to read:
Literacy is power. In the age of the CDS and CDO, most of us are
financial illiterates. By making an already too-complex economy even
more complex, Wall Street has used the crisis to effect a historic,
revolutionary change in our political system — transforming a
democracy into a two-tiered state, one with plugged-in financial
bureaucrats above and clueless customers below.
The most galling thing about this financial crisis is that so many
Wall Street types think they actually deserve not only their huge
bonuses and lavish lifestyles but the awesome political power their
own mistakes have left them in possession of. . .
Actually, come to think of it, why are we even giving taxpayer money
to you people? Why are we not throwing your ass in jail instead?
But before you even finish saying that, they're rolling their eyes,
because You Don't Get It. These people were never about anything
except turning money into money, in order to get more money; values-
wise they're on par with crack addicts, or obsessive sexual deviants
who burgle homes to steal panties. Yet these are the people in whose
hands our entire political future now rests.
The story of Goldman Sachs -- its tentacles entrenched in every aspect
of the Government and the blindingly favorable treatment it therefore
continues to receive -- demonstrates, just standing alone, how
pervasive the oligarchical decay is.
Atrios has been writing a version of the same key observation
virtually every day for weeks -- that almost every plan to "solve" the
financial crisis involves nothing more than transfers of enormous
amounts of public money into the pockets of the same unchanged system
and the same people who caused the collapse in the first place:
The issue is that [Geithner] and friends never distinguished between
bailing out the system and bailing out the players. There was a way to
do that, and they didn't do it.
In condemning Geithner's "bank rescue" plan, Paul Krugman notes that
-- yet again -- it enables great benefits for the richest investors,
with the public protecting them from the risk of losses (privatize
gains; socialize losses), and concludes: "The Obama administration is
now completely wedded to the idea that there’s nothing fundamentally
wrong with the financial system."
When it comes to its primary challenge, the administration elected on
a platform of "change" is, above all else, viciously devoted to
preservation of the status quo. Read John Cole's summary of expert
reaction to Geithner's banking plan.
That is why the AIG scandal, rightfully so, is producing so much
public outrage -- because it demonstrates what the political and
economic system really is, a system which the Government continues to
prop up and embrace. Brian Beutler put it this way:
It's not that the success of the bailout depends on what happens to
these $160 million, but that these $160 million strongly suggest that
some very rich, and, perhaps, very bad men have leveraged their way
into control of the whole bailout process and the government's now
following their lead. And their incentives are, to say the least, not
in line with the best interests of the vast majority of taxpayers. . . .
It's simply not the case that Geithner and other high-level economic
officials were so concerned with the bigger picture that they
outsourced the question of compensation to Congress entirely. On the
contrary, they were extremely involved in resolving that very
question. They were opposed to strict compensation limits. . . .
But clearly they also thought that letting executives take home big
fat piles of government money was either a matter of expedience or a
matter of necessity. And either way it has huge implications for the
success or failure of one of the most expensive and urgent government
programs in the country's history.
The AIG scandal vividly reveals how corrupt and self-interested are
the people who are still exerting primary control over this process,
which is why our establishment class is so eager to demand that
everyone look away. For months, Americans have been told that they
must sacrifice and trust the Government to engage in extraordinary
actions if they want to stave off another Great Depression, only to
watch as hundreds of billions of dollars fly to the very people who
are the prime culprits. As Jane Hamsher put it: "The 'populist rage'
that the pundits find so unseemly is actually the appropriate response."
* * * * *
We saw this week the benefits which unbridled and intimidating public
rage can produce. The retroactive, confiscatory tax on bonuses
imposed by the House is, to be sure, a crude and troubling (and
arguably unconstitutional) response. But the virtues of that episode
easily exceed its vices: Congress sought to seize those bonuses
because, for once, they were afraid of simmering public fury and
responded to it rather than to the dictates of the corporate and
lobbyist class that owns them and which they serve. Whatever marginal
"unfairness" that tax might produce pales by many, many magnitudes
when set aside the decade-long (and ongoing) pillaging of America's
financial security and the future of its middle class by the financial
owners of our political system.
And that's the point: only this true, intense, and -- yes -- scary
public rage can serve as a check on ongoing pilfering by the narrowed
monied factions who control our Government for their own interests and
who otherwise have no reason to stop. Who else is going to impose
those checks? The bought-and-paid-for, incomparably subservient,
impotent and inept Congress? The establishment-loyal, vapid political
press? An executive branch run by the very people who are most
vested in, dependent on, and loyal to the financial system that
produced these disasters? Only a healthy fear of the populace --
exactly what has been missing -- can achieve that.
Obviously, mass rage can entail its own excesses and, and if
unchecked, can lead to mob rule, a form of majoritarian tyranny (as
Armando notes, its isolated, unrepresentative excesses (death
threats!) are already being exaggerated to discredit the underlying
anger itself). But we are far, far, far away from the point where
unchecked public sentiment plays too great of a role in how our
political institutions function. Rather: we're a country that, for
the last decade, acquiesced meekly and quietly as our Government
transferred huge amounts of national wealth to a tiny elite; launched
a devastating war based on purely false pretenses; tortured, spied on
us and literally claimed the right to invalidate law and the
Constitution; and turned itself over to the highest bidders.
The overarching question is not: why is there so much public rage?
The overarching question is: why has there been so little? A
political establishment that can function without any fear of the
citizenry will inevitably trample on its interests. That is what has
been happening more than anything else. And it is why we need far
more public outrage, and fear of that outrage more deeply implanted in
the minds of our political and financial elites.
-- Glenn Greenwald
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