The baffling complexity of new market structures at the heart of the banking meltdown were neither baffling nor unknown by members of one after another administration leading up to breaking news of “the crisis,” Robert Scheer writes in his latest book The Great American Stickup. “Informed and prescient observers had seen through the gimmicks.”
Inside the halls of power, the potential for damage was known to those who cared to know, Scheer writes, but when these regulators attempted to sound the alarm, they were ignored, or worse. Rewards in both financial remuneration and advanced careers were such that those in a position to profit went along with great enthusiasm.
“Of the leaders responsible, five names come prominently to mind: Alan Greenspan, the longtime head of the Federal Reserve; Robert Rubin, who served as Treasury secretary in the Clinton administration; Lawrence Summers, who succeeded him in that capacity; and the two top Republicans in Congress back in the 1990s dealing with finance: Phil Gramm and James Leach.
“Arrayed most prominently against [Greenspan, Rubin, Summers, Gramm and Co] — far, far down the Washington power ladder — were two female regulators, Brooksley Born [chair of the Commodity Futures Trading Commission from 1996 to 1999] and Sheila Bair [Bush I and II appointee retained as FDIC chair by Obama].” However, “facing a juggernaut — combined power of the Wall Street lobbyists allied with popular President Bill Clinton, who staked his legacy on reassuring the titans of finance a Democrat could serve their interests better than any Republican could — the regulators never had a chance.” They were summarily crushed.
“Clinton’s role was decisive in turning Ronald Reagan’s obsession with an unfettered free market into law.” A fading actor recast as a great propagandist for the unregulated market, his patented rallying cry ‘get government off our backs,’ Reagan was far more successful at deregulating smokestack industries than the financial markets. It took “a new breed of ‘triangulating’ technocrat-Democrats really to dismantle the carefully built net designed after the last Great Depression …
“Clinton betrayed the wisdom of Franklin Delano Roosevelt’s New Deal reforms that capitalism needed to be saved from its own excess in order to survive, that the free market would remain free only if it was properly regulated in the public interest.
“The great and terrible irony of capitalism is that if left unfettered, it inexorably engineers its own demise, through either revolution or economic collapse. The guardians of capitalism’s survival are thus not the self-proclaimed free-marketers who … want to chop away at all government restraints on corporate actions, but rather liberals — at least those in the mode of FDR — who seek to harness its awesome power while keeping its workings palatable to a civilized and progressive society.
“Government regulation of the market economy arose during the New Deal out of a desire to save capitalism rather than destroy it.
“Whether it was child labor in dark coalmines, the exploitation of racially segregated human beings to pick cotton or the unfathomable devastation of the Great Depression, the brutal creativity of the pure profit motive has always posed a stark challenge to our belief that we are moral creatures.
“The modern bureaucratic governments of the developed world were built, unconsciously, as a bulwark, something big enough to occasionally stand up to the power of uncontrolled market forces…”
On Summers’ announced end-year departure from the Obama administration, Scheer wrote in yesterday’s column: “The announced departure of Lawrence Summers as the president’s top economic adviser is welcome news. Harvard’s loss in taking back its $586,996-a-year professor and ‘president emeritus’ — who is also paid millions by Wall Street on the side — is the nation’s gain.
“Maybe now [President] Barack Obama, who hopefully will also push out Summers’ protégé, Treasury Secretary Timothy Geithner, will begin to provide an authentic populist alternative to those tea party Republicans who totally absolve Wall Street of responsibility for the economic collapse. …
“Early signs are not fully reassuring.”
Sources and notes
Excerpt from Robert Scheer’s book The Great American Stickup, Chapter 1 “It Was the Economy, Stupid,” Posted on September 16, 2010, htttp://www.truthdig.com/arts_culture/item/the_great_american_stickup_is_bush_really_20100916/?
Truthdig: drilling beneath the headlines, http://www.truthdig.com/
Robert Scheer is editor in chief of Truthdig, credited with a thirty-year reputation in journalism, his writing focused on social and political affairs.
“So long, Summers” (Robert Scheer), September 21, 2010, http://www.truthdig.com/report/item/so_long_summers_20100921/
______________________________________________________________
Bennett's books available at New York independent bookstores: Lift Bridge Bookshop: www.liftbridgebooks.com [Brockport, NY]; Sundance Books: http://www.sundancebooks.com/main.html [Geneseo, NY]; Talking Leaves Books-Elmwood: talking.leaves.elmwood@gmail.com [Buffalo, NY]; Book House of Stuyvesant Plaza, http://www.bhny.com/ [Albany NY]
No comments:
Post a Comment