In the US, the UK, and a handful of other countries, financial transactions have largely displaced the production of goods or services as the source of private fortunes, distorting the value we place upon different kinds of economic activity. The wealthy, like the poor, have always been with us. But relative to everyone else, they are today wealthier and more conspicuous than at any time in living memory. Private privilege is easy to understand and describe. It is rather harder to convey the depths of public squalor into which we have fallen.
Paul Krugman writes today about financial services reform and the debate among those who support it over whether "too big to fail" is the real issue. Krugman comes down on the side that TBTF isn't the issue, that the real problem is the lack of regulation. On the other hand, Krugman notes that former Fed Chairman Paul Volcker believes that the rise of megabanks has created the problems that led to the crisis of 2007-8.
Those who want to understand financial reform should read Simon Johnson and James Kwak's new book, 13 Bankers , which suggests that both issues need to be confronted. The rise of the megabanks evolved out of a constant loosening of bank regulation over the period from the mid 1970s onward, sped by the Reagan Revolution and a financial industry intelligentsia that believed in free markets as the answer to any question. These minds had the attention of the Reaganites, who wanted to unleash the power of the markets in all areas and hated regulation per se.
Out of this era, we got a constant drip of new products like derivatives and "innovative" mortgages, securitization of mortgages, eventually leading to "synthetic" securities, that related to the price of real securities based on real mortgages no longer held by the banks who lent the money originally. No one really tightened up on any banking activities, even after the savings and loan crash of the 1980's, when the regulatory agency that let the S&Ls run amok was replaced by another regulatory agency that let their successors run amok.
But then the whole banking industry changed even more since the 1990's, when the financial moguls were allowed to merge all of the operations of investment houses and old-fashioned retail banking into the megabanks. The combination of the companies we used to know in the United States into six enormous financial services giants has now been accomplished. What's more, their share of the economy has increased to the point where there is more activity around money than is healthy for a nation built on industry, not banking. It's not surprising that a sector that's become too large to serve the real economy has to create more and more complex products (like those that brought down the markets), in order to sell them to an economy that, relative to banking, isn't growing.
So, in a nutshell, Johnson, the former head economist at the IMF, and his colleague Kwak, an economist and former McKinsey and Company consultant, argue that both old-fashioned regulation and limiting bank size are necessary together. While Krugman would argue in favor of regulation alone, Johnson and Kwak point out that regulation works less and less well as the regulated industry grows bigger and more powerful. In our case, financial services fees actually fund the regulators, while companies have a choice as to which of the many agencies they'd like to be regulated by, making it nearly impossible for the agencies to get tough on their funders.
What's needed, Johnson and Kwak say, is a new turn in our economic and political belief system, similar to the one Teddy Roosevelt pushed a century ago, when he argued for breaking up the trusts. If the US moves towards a system of well-regulated and boring banking, like the kind we had for half a century in the post-depression economy, coupled with a willingness to limit the size of any banking institution to that which is less than "too big to fail," we may once again step back from the brink of bubble and bust economics.
Historian Howard Zinn, who we lost in January at age 87 to a heart attack, worked throughout his lifetime to create a different America, one based on human values and the rights of ordinary people to control their own destinies. Zinn wasn't waiting for an American political leader, espousing hope and change, to make the world a better place; he advocated that the people pressure all our leaders through direct action to create jobs, to fight against corporate domination of our politics, to break down racial barriers, and to insure decent healthcare for everyone. Moreover, Zinn worked to end the dominance of the military industrial complex that has so shaped the post-World War II world.
These were just a few of the goals Zinn illuminated in his academic work, by documenting great movements that have pushed our history forward. He spent his lifetime presenting American history as a series of alternatives between passivity in the face of power and the people's occasional willingness to engage in struggles that have not always succeeded fully or quickly, but have eventually led to greater freedom, more economic power for ordinary working people, the poor and the oppressed. His most popular work, The People's History of the United States, has helped preserve a narrative of American movements for change and struggle that helped shape our history every bit as much as the powerful and well-connected leaders who rode astride the changes they created.
For me, Howard Zinn's work, Postwar America 1945-1971, played a formative role in developing a perspective of my own on the country I lived in as a young person. It stood on its head everything I thought I understood about the role our nation played in the world after the end of the Second World War and made me think about how different a place the planet might be had Franklin Roosevelt's emphasis on aiding self-determination kept preeminence after his death in 1945, instead of being subsumed in a fearful mania that led to the Cold War. Zinn's book and the courage of a high school history teacher named James Bunnell to disseminate revisionist histories to his students during the 1970's helped shape my life and outlook. I began to feel differently about how to address power and to find it important to tell people's stories, rather than relying on histories crafted solely from the point of view of those who would bend it to their own substantial economic and political interests.
I never met Zinn, but followed his work and the controversies he encountered and obviously enjoyed during a lifetime of afflicting the powerful and encouraging Americans to do the same. In this blog, a place where I spend a fair amount of time discussing politics and social history, it seems right to remember the life of a man who empowered so many like me to take journalism away from being solely the domain of those who own the presses and give it back to the people. Zinn helped create a world in which so many of us now write, film, and discuss politics and history as a living and democratic study, not simply a discipline given over to those who are most connected to the powerful and well financed. Zinn lived just long enough to see a version of his People's History finally made into a televised performance as The People Speak , hopefully making his work even more accessible to new generations of Americans who may otherwise never have heard the stories of slaves, abolitionists, farmers, laborers, feminists, and war resisters, except perhaps in passing reference.
Rather than summarizing more of his work here, I leave it to readers to follow the links below to read the remembrances and anecdotes of his friends and colleagues and to access some of Zinn's books, articles and notable confrontations. I think one excerpt from The People's History of the United States below will help those unfamiliar with Professor Zinn's work frame his perspective and I will close with it:
If history is to be creative, to anticipate a possible future without denying the past, it should, I believe, emphasize new possibilities by disclosing those hidden episodes of the past, when, even if in brief flashes, people showed their ability to resist, to join together, occasionally to win. I am supposing, or perhaps only hoping, that our future may be found in the past’s fugitive moments of compassion rather than in its solid centuries of warfare. That, being as blunt as I can, is my approach to the history of the United States.
In the wake of Al Franken’s long-awaited Senate victory in Minnesota, Steve Young has an interesting insight in the Huffington Post that should shed some light on how Franken made the transformation from comedian with a conscience to US Senator. After all, Franken wasn’t looking to become a politician a few years ago, but after he was moved to write a scathing parody ripping Right Wing talk TV and radio, something happened.
Young has this take:
The straw that broke the far right wing's back came in the form of a 2003 law suit where the right-wing elevated the comic/author Franken from comic and author to Michael Moore danger level. Penguin Books published Franken's book "Lies and the Lying Liars Who Tell Them: A Fair and Balanced Look at the Right," which included a cover photo of O'Reilly and a chapter accusing O'Reilly of lying. The book had sold fairly well, but would have run its course until Fox News, pushed by O'Reilly taking the bait, sued claiming infringement of its registered trademark phrase "Fair and Balanced." A federal judge found the lawsuit to be "wholly without merit" and Fox then filed to dismiss it. With the media attention drawn by the legal folly, Franken's sales and his public image went bonkers. He not only beat O'Reilly and made him appear thin-skinned and toothless, but his books and satirical approach taught the Democrats to fight back creatively. More importantly, he gave open-minded Republicans a bit of the truth behind far-right talk show zealots claims. Claims that had pretty much gone without scrutiny even by the so-called liberal mainstream media who were happy to book people like Limbaugh, O'Reilly and Ann Coulter to get their take on politics.
These are heady times for political bloggers and
journalists.The President is
daily breaking new ground, yesterday a bankruptcy restructuring of Chrysler,
today a possible Supreme Court opening, tomorrow, who knows?The changes wrought by the economic meltdown
and by a more progressive approach to dealing with it are extraordinary and are
rippling throughout the country. There’s so much to write about, some that’s
exciting and much that’s quite disturbing— from the staggering unemployment and
residential dislocation across the country to the potential for disaster in
developing nations now facing an unprecedented falloff in capitalfrom abroad.
The problem, both for journalists and for bloggers, is
that we’re all being hit hard by the economic meltdown ourselves, making the
act of writing into a financial drain on those we support.For my own part, I’m responsible for
salaries and for keeping up on overhead for office and equipment at my
documentary production company.For many journalists, their means of plying their trade, the newspapers
of America, are failing at a record rate.The bailouts of financial companies and the restructuring of automakers,
while tremendous fodder for discussion, are not replicated in our world of the
art and media of political and social subjects.
During the Great Depression, the US government hired many
of the best writers, filmmakers, and photographers of the era to document the
impact of the economic slide on the people of the country.The memorable and publicly owned photographs
of Walker Evans and Gordon Parks and the prose of the Federal Writer’s Project
were but a bit of the product of these programs Franklin Roosevelt’s
administration promulgated to keep not just America’s blue collar workers on
the job, but also America’s most prized intellects and artists.
Might it not now be another moment in American history for
the government to infuse the art and trade of comment and image with a bit of
public investment?The addition of
some money for the National Endowment for the Arts and the National Endowment
for the Humanities— even some small bit of capital to disburse to the thousands
of journalists, media makers, writers, and artists whose contribution to
memorializing our nation’s response to crisis will help guide the way into the
future.Perhaps we should think of
it as a stimulus for those who always look to find a way to contribute their
insights and visions, but who need just a small bit of support to leverage our
talents with the nonprofit community and to wrest further support from
individuals.The imprimatur of the
national endowments was once an important gateway for other funders to look
towards when supporting projects and artists.
Over the last few decades of conservative, market-oriented
politics, the once proud seed investments the US made in our public endowments
for art and the humanities have barely survived.Filmmakers and artists, writers, and media makers have
endured, but have only done so by utilizing the increasingly inexpensive means
of producing work: small and affordable cameras, the internet to publish on,
and other innovative technological means.The courage of American artists and the innovations that make American
writers available to us are not a limitless panecea, however.Some financial support is necessary in
order to make this work available to the American people— and by doing so, to
help rejuvenate the public discussion that comes of a lively American scene of
art and comment.
I
haven’t got much more to say on this at the moment.I need to go put some more CDs for sale on eBay and
advertise my edit suite online.But think about it.Maybe
we should write to our Congresspeople and insist that they remember us, too,
when they address the flotsam and jetsam of the meltdown.
Last night I listened on my I-Pod to editor Michael
Kinsley go on about his new book, Creative Capitalism.The premise of it seems to be that a
new and socially responsible sort of entrepreneurism may be a creative way to
help solve the world’s ills.Or not.Hard to say, Kinsley says.You have to read the book.Lots of important and influential
people talked to him and they have some great ideas.
Or not.
In the or not category, Kinsley noted a contribution by
Larry Summers, who speculated that corporations aren’t exactly designed to make
our lives better and that when they make claims in this area, we ought to watch
them carefully.OK, not so
original, but not hard to sign on to.
But Kinsley went on to intone about how great it is that corporate
folks like Bill Gates make tons of money, then go on to give some of it
away.Isn’t that nicer?Well, I guess… if you forget all about
the anticompetitive legacy of Microsoft, sure.It’s lovely that he has religion now, after amassing his billions.
So this morning, I see in his blog that Ezra Klein hasactually
cracked the Kinsley book.Summers apparently went on to say that even though they are
only out to profit for themselves, corporations and financial funds shouldn’t actually be regulated.That’s also
bad.Really?
Apparently, Summers thinks hedge funds
are the answer to our problems, exactly because they aren’t regulated… cause he
didn’t regulate them and their favorite products, derivatives, when he had a
chance to.So the fact that
they’re going under left and right shouldn’t embarrass him, correct?
Well, he said that earlier this year, so I guess he might
have changed his mind…
Gee, I hope President Obama listens to Summers lots and lots... Or not.
After two days of increasingly rousing rhetoric and slickly delivered attacks on the Democratic ticket, the RNC ended on a note that seemed almost tired and depressed. The off-key impression, made by the candidate himself, John McCain, was surprising in its contrast to the conservatism-on-steroids that the rest of the RNC put on display. His speech seemed oddly flat in both tone and substance.
The entire night had a sleepwalking quality to it, filling in portions of the program that had been previously left out of the hodgepodge re-scheduling due to Hurricane Gustav without building the conclusion of their case for the candidate.
Tom Ridge led the primetime festivities with a speech I wanted to like. There’s something appealing about Ridge; he’s like a guy from the local hardware store who you can trust to find the right bolt to hold cement and who’ll tell an anecdote to make you feel better about not knowing which one to use yourself. In fact, his anecdote in the speech about finding John McCain in his office during one of the low points of the nomination campaign, illustrating his friend’s ability to tough out the hard times had a likeable quality. But his entire speech felt like that same guy from the hardware store delivered it, forced into a prepared speech on teleprompter instead of a short chat—very stiff.
The video on Sarah Palin, originally prepared for Day 3 but cut because Rudy Giuliani wouldn’t keep his speech to the agreed length, seemed oddly out of place after her night was over. And Cindy McCain’s family tableau, while pleasant and lovely in an Inaugural Ball sort of way, attired in a silk blue dress that must have cost as much as the entire annual budget of the town of Wasilla, AK, seemed somewhat off-speed for a convention windup.
The film about John McCain appropriately highlighted the candidate’s remarkable war biography; bringing to life a young man who one almost expected to see strutting onto the stage by the film’s end, ready to fight back against torture with a witty one-liner about his keepers. But then the real McCain, a man who’s not a prisoner of the North Vietnamese, but of the last eight years of right wing policies, took to the real stage, in front of a green background that highlighted a sickly complexion and a stiff composure.
The speech itself had few strains of the maverick the RNC had been preparing viewers for. It was more of a laundry list of what the candidate would do than an inspirational description of what all of the points amounted to. He started genially enough, thanking one and all around him, almost in wonder that he’d finally achieved the Republican nomination in spite of the fates and the Bushes.
The next portion of the speech, in which he talked about the kind of debate he planned to engage in with Senator Obama— and the way his running mate Sarah Palin would help him to buck the expectations of any who think it’ll be about yelling at the other side, could have led to a more inspiring call to the future. Instead, it began a litany of all the things he’s fought against over the years, including the corruption of the Republican Party as it fell prey to the lure of pork barrel spending and lobbyists’ cash.
McCain soon segued into Iraq, values, and reducing government spending (even, oddly enough, on unemployment support checks). He spent time on charter schools and on foreign aid, two areas not generally considered central to his campaign. In all this, his delivery began to bog down with the weight of the speech’s density.
He found better footing when moving on to foreign policy and his theme of experience and preparation for the Commander-in-Chief’s role. His line about the threats facing the United States, that, “I’m not afraid of them. I’m prepared for them,” brought the delegates to their feet.
His discussion of his family’s history of service during World Wars and his own dislike of what he saw happen to comrades in Vietnam led quickly to another good moment about his ability to keep the country strong, but out of conflict when possible. After that, when he went on to say that he bears scars from conflict, but that Senator Obama does not, he seemed to step over the line into self-involvement, before stepping back into the best part of the speech, now almost forty five minutes in.
His Vietnam story, as much as we’d all heard it, was his strongest section. The acknowledgement that he’d found his love of something bigger than himself: his country, not in being personally strong, but in being broken under torture, was a really personal and authentic moment of connection with viewers and the delegates. It led to a rousing finish, with McCain urging Americans to be involved in their country, each in their own way— and to fight with him to push for a better America.
Unfortunately, most viewers would probably be asleep or otherwise engaged by the time McCain got to this conclusion, finally finding energy in a speech that had few rallying moments to precede its good end.
In summary, it was a lackluster night, just when the RNC needed more drama to bring the candidate into the fall campaign.
The first full day of the RNC concluded with speeches from President Bush, via satellite, then Fred Thompson, and Joe Lieberman, in the flesh. The former, while appealing to the assembled Republican delegates, was tucked into the nine o’clock hour, away from the major media push. The last two were assigned to first bash the opposition, in Thompson’s case, and then to appeal across party lines, in Lieberman’s. Mention of the Republican Vice-Presidential nominee was made, but briefly and in the context of contrasting her to the Democratic Presidential nominee as more inexperienced.
Bush’s speech hit the expected endorsement points, presenting John McCain as a candidate who would finish the job in Iraq and do an independent, but laudable job following the Bush Presidency. McCain's campaign was no doubt helped by the personal presence of Laura Bush to both introduce and cap off the President’s remote address, giving a warmer touch to the speech and taking an edge off the unpopular Bush.
Fred Thompson’s speech, however, was all red meat, both positive and negative. He defended VP nominee Sarah Palin as someone who “has got the other side…in a panic.” He contrasted Palin as someone who has “run a state,” as opposed to “running the Washington cocktail circuit,” an allusion to Senator Obama’s celebrity status.
Thompson talked about John McCain’s early life and military service, detailing the long-ago scene of horror on the deck of the USS Forrestal, which nearly engulfed the future Senator in an accidental missile explosion, then covered his capture by the enemy in Vietnam, and the near-death experience he endured following being shot down.
The Tennessee Senator took time to cover various anecdotes from McCain’s captivity in a Vietnamese POW camp, pointing out the courage and rebelliousness of the young pilot’s responses to beatings and interrogations there for five long years as an example of his character.
Finally, Thompson moved to discuss McCain’s career in the US Senate. He emphasized how the Arizona Senator worked in various ways to push important legislation through, whether by bipartisanship or by confrontation, creating a record of accomplishment.
Having praised McCain for his life history of service, Thompson moved to attack the Democratic nominee for his inexperience and his address to “America’s critics” abroad in Europe. Then Thompson delighted the crowd with an attack on the Democratic Congress for hurting business with its legislative philosophy. His anecdote about the Democrats pouring water only out of business’ side of the bucket got a huge rise from the delegates.
In a rousing finish, Thompson told the gathered Republicans that their nominee couldn’t raise his hand high enough to salute the flag he loved, because his war injuries didn’t allow him to do so, but posited that this physical limitation was another measure of the service and sacrifice that made John McCain a superior candidate for the Presidency. All in all, it was a great combination of honor and attack in a speech that built up McCain and tore away at the qualifications and record of the opposition, side by side.
The highlight of the night was to be Joe Lieberman’s speech, but while strong, he was somewhat eclipsed by Fred Thompson’s address. Lieberman seemed to be working to strike a balance between feeding the emotions of the partisan crowd and repeatedly referring to the oddity of his addressing an explicitly Republican delegation. He was at his strongest when discussing McCain’s support for the war effort in Iraq and of the surge in particular.
Lieberman’s praise of John McCain focused on experience and service to country, drawing on their twenty-year relationship in the US Senate together as a basis to point out McCain’s strengths and character. According to Joe Lieberman, the reasons to cross party lines and support John McCain lie in the extraordinary nature of the times and of the candidate himself. This is “no ordinary election,” Joe said, and McCain “no ordinary candidate.” McCain will, according to the Connecticut Independent, “get the government working again for the American people.”
“Whether you are an Independent, a Reagan Democrat, a Clinton Democrat, or just a plain Democrat, vote for the person you believe is best for the country, not for the party you happen to belong to,” Lieberman implored.
The Connecticut Senator’s appeal was focused on the way McCain has repeatedly brought together Senators across party lines to pass ethics reform, end a deadlock on approving federal judges, and to address immigration issues, albeit unsuccessfully. Lieberman’s CO2 cap and trade legislation, co-sponsored by McCain, was another example he chose to show that McCain is committed to fighting global warming.
Lieberman’s address was sometimes intended to reach outside the hall to the television audience exclusively, as he made his pitch to those who might never have supported a Republican before.
The two made a strong, if belated, start to the real business of the RNC, building up their candidate and tearing down Barack Obama. On Night Two (or 1.5), the Republicans are shifting gear and settling down to business.
Buried inside an article in today’s NY Times about Section 8 housing is a real story. The second half of a piece by Solomon Moore, entitled “As Housing Program Moves to the Suburbs, Tensions Follow,” details anecdotes suggesting that the Antioch, CA police department has engaged in a systematic program to intimidate and evict African American tenants on the federal Section 8 program living in their community.
However, the story’s headline and the emotional thrust of it suggests that tensions in Antioch stem mainly from mistakenly allowing poor blacks to move to the suburbs, not from an abuse of power by local police or seemingly intolerant attitudes on the part of some white residents. With reference to one recent opinion article in the Atlantic Magazine, the piece seems to dismiss past social science data on reforming public housing policies away from high-rise, high-density project developments towards rental assistance for housing in neighborhoods where opportunity already exists.
Reading the piece, I wonder whether the editors of the Times have sat with tenants of Section 8 housing for any period of time. The writer appears to have attempted to cover the story of one tenant and police intimidation. However, as published, the story smacks of an article which was editorially forced into a point-counterpoint mishmash of contextual references.
Readers may want to check out other points of view about the challenge, in an era when few programs are being funded to alleviate poverty, to help poor families find opportunity.
— John Ashcroft on the presence of Al Qaeda operatives (soon to be 9/11 hijackers) in the United States, 2001.
Is anyone still wondering why the Bush Administration didn’t want a 9/11 Commission or why their cooperation was so poor once the Commission was inevitable?
In her telling, a major incentive for Mr. Cheney’s
descent into the dark side was to cover up for the
Bush White House’s failure to heed the Qaeda
threat in 2001. Jack Cloonan, a special agent for
the F.B.I.’s Osama bin Laden unit until 2002,
told Ms. Mayer that Sept. 11 was “all
preventable.”
In the days immediately following September 11th,
the most powerful people in the country were
panic-stricken. The radical decisions about how to
combat terrorists and strengthen national security
were made in a state of utter chaos and fear, but
the key players, Vice President Dick Cheney and
his powerful, secretive adviser David Addington,
used the crisis to further a long held agenda to
enhance Presidential powers to a degree never
known in U.S. history, and obliterate Constitutional
protections that define the very essence of the
American experiment.
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