"People Are Pissed About the Economy."
AIG's use of taxpayer money to reward "the best and the brightest" who bankrupted the company is just this week's outrage. Next week there will be another theft to learn about, and then another, and another.
People are pissed indeed--rightfully and righteously so. And it's not going to subside over night. We can no longer pretend that all the economic crimes we hear about are separate, unrelated cases of "bad apples." If every other apple is bad, then something is wrong with our tree. I don't think the Obama administration has fully grasped this yet.
Public outrage is swelling against an economic system that has failed. This is playing out the way it always does: The public is looking for something to smash. Something is going to be torn down and stomped to pieces; we just don't know what it will be yet. Over the next few years, the politics that arises victorious from this situation is going to be a populist politics one way or another. If progressives delay, the right wing will provide their own freshly polished faux-populism to steal the next couple of decades--a new What's-The-Matter-With-Kansas judo strategy to take our anger at "the system" and redirect it against one another and against the very social cooperation that provides our best hope. "It's big government's fault! It's the minorities! The immigrants! The atheists! The lazy poor!" ...all over again.
Do we need to replay the last 30 years? We will, if we're not careful.
Instead, the Left needs to offer some honest-to-God progressive populism as an alternative. I think the public is more receptive now to bold new ideas than at any time since the Great Depression.
But we shouldn't underestimate how difficult it will be to break the spell of the Religion of Capital. Even as people lose their homes and watch their futures blow away, the old-as-money arguments of the wealthy class are still so deeply ingrained in us. We know we could build a country where everyone who wants to work can, everyone has access to quality healthcare, and every senior has a pension that affords a decent retirement, but we hesitate because we feel like doing those things would break some holy and exalted law. It's a religion that we've been taught since we were young, and the deepest parts of it we dare not question--that is, until things get so desperate that we're willing to explore the alternatives.
If you're just joining us, welcome to one of those desperate times. Obama still has the political momentum to break the spell and do something big. He can ride this wave of public outrage and direct it toward something constructive. He can begin to tear down the giant pillars of wasteful greed in our economy and begin to build up the things that will improve people's daily lives.
If he doesn't start to do this, and cedes populist energy to the Right, then he will not win re-election. (Other than some random sexy scandal, this is his biggest threat to re-election.) The nastiness of our economy will be hung around his neck--and rightfully so. He may not have created it, but if he is seen as enabling it, then it becomes his own.
Right now, there are some hopeful signs but the Obama administration is not yet showing the bold leadership we need to bring about a fundamental change in our economy. I think this is partly because the two biggest economic voices in the administration are 90s-style neoliberals: Larry Summers (Obama's chief economic advisor) and Tim Geithner (Treasury Secretary).
Back in February, I predicted that these free-marketeers would either
1) evolve into progressives,
2) be overpowered by progressives in the administration, or
3) lose their jobs.
Larry now looks like he's heading down path #2, if by "progressives in the administration" we mean President Obama himself. Summers went on TV trying to make us believe the government should do nothing about AIG paying lavish bonuses with taxpayer money, before Obama contradicted him the next day, saying the government would move to block the bonuses. Geithner is probably closer to path #3, losing his job. He has the wrong instincts (like he's serving as Treasury Secretary 15 years too late), which bring him down on the wrong side of these bailouts-n'-bonuses issues.
What does all this mean? Obama can either ride the wave of public outrage or he can stand against it and be crushed by it. By jettisoning Summers and Geithner now and replacing them with progressive economists who don't pretend it's still the 1990s, Obama would signal that he will not stand against the rising tide for change. Holding on to these guys will lead Obama to his own "Heckuva job, Brownie" moment and could very well make him the new owner and latest defender of our failed economic system.
7 comments:
Even now, I'm afraid that the Dems on the hill are too afraid of the ghosts of Republicans-past to gird up their loins and follow the presidents. We need to be heard, both on the hill and in the white house.
I hope hope hope this administration can make the changes that are needed. But does anyone actually know what that would be? Cause I haven't really heard anything clear yet.
But I also think that what we're experiencing now is the result of a spiritual and ethical vacuum that exists in our country. (I know, throw rocks at me.) Not just from those executives, but from all of us--thinking we could have outrageous returns for little effort, or live ridiculously beyond our means with no fallout. And until we have a come-to-Jesus about that, I don't think government reforms will make a lasting difference. As Stephen Colbert said the other night, as long as we aim our pitchforks at AIG, we don't have to own up to our own junk. Y'know?
Which is what Obama alluded to in his inaugural address. Let's hope he can lead in that kind of reformation as well. It's a tall order.
Amy, I'll throw the first stone:
It seems you are linking economics to God/Jesus/spirituality/ethics by way of claiming that if we "come-to-Jesus", only then will our government reforms help the economy.
I understand what you mean and I like it, but I'd like to decrypt and find a more universal translation of your comment.
"Not just from those executives, but from all of us--thinking we could have outrageous returns for little effort, or live ridiculously beyond our means with no fallout." This is a deep rooted psychological issue with Americans. We think we need what we don't need. So we buy unnecessarily. We (the middle class) buy houses and cars and go into debt just to maintain a "middle class" image. It seems like everyone who thinks they are supposed to be middle class is clawing out of the fiscal poverty hole to appear middle class. Nobody wants to appear poor. It's an image thing. I know families who appear (big house, new cars, kids) to be quite wealthy yet are bankrupt.
It seems like there is a middle class but my arguement is that the middle class is an illusion. It's the haves and have nots. Of course there are exceptional have nots who don't have the image complex and live in their means and maybe this is the true middle class but if anything this is a scant group of people (maybe %20 of USA). Then I'd say another %20 is the "haves" and the remaing %60 is the "have nots" (most of which appear to be middle class via going into severe debt).
And don't sell yourself short by using religion as a crutch. Each individual has to take responsibility for her own actions. Take control of the wheel and realize only you control your destiny. Yes fate is a factor but ultimately what counts is what you do with the hand dealt to you. And if one is dealt a poor fiscal hand, then work with that and live within means.
I know very little about economics so I'm not certain of the principles behind why the econmoy crashed. But for some reason I trust Obama. He's getting tons of flak for potentially creating more debt but somehow I think in the long run whatever he's doing (universal health care, etc.) is worth the raving conservative critics and potential decline in public opinion (and potential loss in reelection). You gotta see the forest for the trees?
And keep blogging BTM, this is my only news source!!!!
I hope, hope, hope he knows what he's doing. For all our sakes. The faux populism judo is my greatest fear. I swear that if he could just pull off fixing health care, or starting to fix it, that would make so many people's lives better that it would buy major good will.
Until then, I know that we are paying $1100 a month for COBRA coverage.
Chris--I agree, so many are living under the illusion of having more than they really do, and almost that we have a "right" to those things. (And that where it's a spiritual/emotional issue in my mind.) As disgusted as I am with some of the high profile AIG-type stories, I'm hoping that we can look at our own choices and not just throw rocks--in other words, that something productive will come from the anger.
Dave, keep posting! It's cold and lonely out here.
To pick up where Amy and Chris left off--
I think the notion that a "spiritual and ethical vacuum" is part of the cause of our economic mess is right on. I would just add this: Sometimes when we focus just on the failings of individuals, we ignore the failings of the systems and social institutions we've created. Obviously, we need both--individual change and social change.
For example, some conservatives have tried to blame the mortgage crisis almost entirely on families who wanted more house than they could afford. But they ignore the banks who were pushing loans that they knew people could not repay, as well as the free-wheeling financial system that encouraged firms to gamble on those loans with our (the nation's) money. And we almost all ignore that this is the sociopolitical system we as a people have chosen. It doesn't have to be like this.
I think one of the big phantoms filling the country's "spiritual and ethical vacuum" is our hyper-consumer culture. Powerful corporations work very hard to get us to buy things we do not need, even when buying them means we go into debt to other corporations. Ignoring the wastefulness and deception of this economic model for a moment, we cannot pretend these marketing strategies and the culture these corporations have created do not affect us as individuals on a deeper psychological, even spiritual, level.
Again, it doesn't have to be like this. I hope the populist wave I describe gets us on track to change a lot of this stuff. We need to re-regulate the financial system and rebuild the economy from the bottom up. We need to limit the wealth and political power that individuals can wield. We need to reintroduce the concepts of shared sacrifice and shared prosperity. And we need to shatter the delusion that we can all live like kings, to name a few things.
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