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| Economy |
| American Oligarchy |
| 2010-05-03 |
| Don't expect real reform from the Wall Street Democrats. Or Republicans. By Christopher Caldwell "Now, the Senate Republican leader, he paid a visit to Wall Street a week or two ago," said President Obama at a California fundraiser for Barbara Boxer in mid-April, putting on a mocking, homespun voice. "He took along the chairman of their campaign committee. He met with some of the movers and shakers up there. I don't know exactly what was discussed. All I can tell you is when he came back, he promptly announced he would oppose the financial regulatory reform." To judge from the guffawing that followed, few in attendance realized that Obama is more dependent on "movers and shakers" in the financial sector than any president of our time, although the files of the Federal Election Commission make this clear as day. The movers at Goldman Sachs, whose top employees were grilled before the Senate Banking Committe last week, gave Obama's party three times as much money in the last cycle ($4.5 million) as they gave to Mitch McConnell's ($1.5 million). The shakers at Citicorp gave Democrats almost twice as much ($3.1 million) as they gave Republicans ($1.8 million). So every time the president accuses Republicans of trying to "block progress" or of defying "common sense," as he did that night, he is executing a dangerous tightrope walk. His party's electoral fortunes depend on his making forceful calls for reform of our banking laws. His party's fundraising fortunes depend on his ensuring that no serious reform--of the kind that endangers the big banks' size and power--ever happens. That may be why the Democrats' strategy of painting the Republicans as obstructionists on finance reform has gained little traction. By the same token, if Republicans ever did get serious about reforming the banks--and even about breaking up an industry that has turned into a Democratic war chest--they would put Democrats in mortal peril. There seems no chance of this. Obama's taunts show a confidence, verging on certitude, that Republicans' hypocrisy is as deep as his own. What does it mean, the inability or unwillingness of either party to change or discipline the big banks in any way, even after all the havoc they have lately caused? In the year and a half since the implosion of Lehman Brothers, Simon Johnson, who was the chief economist of the International Monetary Fund in 2007 and 2008, is the only person to have come up with a plausible explanation. He has done so by examining the United States as an IMF analyst would examine some bankrupt basket-case of a country in what used to be called the Third World. Johnson believes that the leaders of the American finance industry have turned into the sort of oligarchy more typical of the developing world, and that they have "captured" the government and its regulatory functions. Johnson laid out this bombshell thesis in the Atlantic a year ago. There are many ways for countries to blunder their way into big economic trouble: Kleptocracy, capital flight, or a commodity-price crash can all spark a panic or collapse. Nevertheless, Johnson wrote, "to IMF officials, all of these crises looked depressingly similar. Each country, of course, needed a loan, but more than that, each needed to make big changes so that the loan could really work." In a gripping new book, 13 Bankers (Pantheon, 304 pages, $26.95), written with his brother-in-law James Kwak, Johnson explains why those changes aren't happening in the United States. Pg 1of 5 |
| Posted by:ed |
| #8 It's a stark illustration of the inequities of capitalism that organized labor can only afford to buy one political party, but Wall Street can buy both of them. ...Mickey Kaus |
| Posted by: tipper 2010-05-03 23:04 |
| #7 I wish it was funny. |
| Posted by: g(r)omgoru 2010-05-03 15:51 |
| #6 It's primary season here in Ohio. If there's competition in your area as there is in mine, some incumbents can be put on notice if they lose their primary, and so they won't even be running in the general election in November. The Cincinnati Enquirer has a cute little interactive gizmo that allows one to mark a sample ballot -- with side-by-side comparisons of the candidates ticked. |
| Posted by: trailing wife 2010-05-03 12:11 |
| #5 The only way to bring about reform in Washington is for the voters to shake the Congressional critter tree very, very, hard in November 2010. |
| Posted by: JohnQC 2010-05-03 10:25 |
| #4 Gr(o)m, I think earlier you used the phrase "The New Class" for something or other. Perhaps it's applicable here. It looks to me like we have a semi-capitalist economy being run by all the same people who couldn't run a communist economy back in Russia. Each day they wake up in the morning and tell themselves that the Russian economy collapsed back in the late 80's because the Russians were too stupid to make it work, but they personally are smarter than that and can make it work. |
| Posted by: Thing From Snowy Mountain 2010-05-03 10:13 |
| #3 A pox on both your houses. |
| Posted by: lex 2010-05-03 09:45 |
| #2 Obama is more dependent on "movers and shakers" in the financial sector than any president of our time Bull. With all the money he passed to trade-unions... |
| Posted by: g(r)omgoru 2010-05-03 03:11 |
| #1 The game is rigged. There will be no meaningful reform. We've been sold out boys. |
| Posted by: bigjim-CA 2010-05-03 03:03 |