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Real Change Depends on Stopping the Bailout Profiteers
To understand the meaning of the U.S. election results, it is worth looking back to the moment when everything changed for the Obama campaign. It was, without question, the moment when the economic crisis hit Wall Street.
Up to that point, things weren't looking all that good for Barack Obama. The Democratic National Convention barely delivered a bump, while the appointment of Sarah Palin seemed to have shifted the momentum decisively over to John McCain.
Then, Fannie Mae and Freddie Mac failed, followed by insurance giant AIG, then Lehman Brothers. It was in this moment of economic vertigo that Obama found a new language. With tremendous clarity, he turned his campaign into a referendum into the deregulation and trickle down policies that have dominated mainstream economic discourse since Ronald Reagan. He said his opponent represented more of the same while he stood for a new direction, one that would rebuild the economy from the ground up, rather than the top down. Obama stayed on this message for the rest of the campaign and, as we just saw, it worked.
The question is now whether Obama will have the courage to take the ideas that won him this election and turn them into policy. Or, alternately, whether he will use the financial crisis to rationalize a move to what pundits call "the middle" (if there is one thing this election has proved, it is that the real middle is far to the left of its previously advertised address). Predictably, Obama is already coming under enormous pressure to break his election promises, particularly those relating to raising taxes on the wealthy and imposing real environmental regulations on polluters. All day on the business networks, we hear that, in light of the economic crisis, corporations need lower taxes, and fewer regulations - in other words, more of the same.
The new president's only hope of resisting this campaign being waged by the elites is if the remarkable grassroots movement that carried him to victory can somehow stay energized, networked, mobilized - and most of all, critical. Now that the election has been won, this movement's new mission should be clear: loudly holding Obama to his campaign promises, and letting the Democrats know that there will be consequences for betrayal.
The first order of business - and one that cannot wait until inauguration - must be halting the robbery-in-progress known as the "economic bailout." I have spent the past month examining the loopholes and conflicts of interest embedded in the U.S. Treasury Department's plans. The results of that research can be found in a just published feature article in Rolling Stone, The Bailout Profiteers as well as my most recent Nation column, Bush's Final Pillage.
Both these pieces argue that the $700-billion "rescue plan" should be regarded as the Bush Administration's final heist. Not only does it transfer billions of dollars of public wealth into the hands of politically connected corporations (a Bush specialty), but it passes on such an enormous debt burden to the next administration that it will make real investments in green infrastructure and universal health care close to impossible. If this final looting is not stopped (and yes, there is still time), we can forget about Obama making good on the more progressive aspects of his campaign platform, let alone the hope that he will offer the country some kind of grand Green New Deal.
Readers of The Shock Doctrine know that terrible thefts have a habit of taking place during periods of dramatic political transition. When societies are changing quickly, the media and the people are naturally focused on big "P" politics - who gets the top appointments, what was said in the most recent speech. Meanwhile, safe from public scrutiny, far reaching pro-corporate policies are locked into place, dramatically restricting future possibilities for real change.
It's not too late to halt the robbery in progress, but it cannot wait until inauguration. Several great initiatives to shift the nature of the bailout are already underway, including bailoutmainstreet.com. I added my name to the "Call to Action: Time for a 21st Century Green America" and invite you to do the same.
Stopping the bailout profiteers is about more than money. It is about democracy. Specifically, it is about whether Americans will be able to afford the change they have just voted for so conclusively.
- Posted in



67 Comments so far
Show AllNaomi is a Goddess.
But finding progressive financial advisors in a sea of conservative plutocrats is going to be next to impossible. Robert Reich and Paul Krugman are the only ones I know of, but they don't have the Big Money and Power connections that people like Summers do.
On second thought, that could be a big plus.
Would you agree that Summers lacks a bit of people skills too?
Summers said Africa was "underpolluted".
That's right. Because he knew first hand what real World Bank policy is all about.
Then lets just consider him out, shall we. No loss. The ladies wouldn't have been happy if he were hired anyway.
Day One on my odyssey to keep Obama from turning into a dud:
Job #1 for Obama:
Hire Dean Baker ( Or James Galbraith or Naomi Klein) as your economy person! Baker, one of the few economists who saw the Crisis coming, has a well conceived stimulus plan to revive the economy through health care reform !
Remember, Mr. Pres. --Wall Street is not necessarily the people's (aka Main Street) best friend!
Also, say no to the Clinton free-market fundamentalists/Wall Streeters who were at least half responsible for the Crisis. Say no to Rubin, Summers... Also say no to the University of Chicago Milton Friedmanites...Ayn Rand, John Galt too, Forbes, Greenspan, etc
Might as well say no to the neo-cons who still yearn for American hegemony in the Middle East--Dennis Ross, et. al.
Dr Wu, the last of the big-time thinkers
I agree wholeheartedly with your recommendations.
When we were a country the people had some input. But now that we are an empire only corporate interests will be considered. Changing kings won’t change the kingdom.
Hoa binh
Obama and the democrats passed this bailout. It was their baby. When it didn't pass the first round, Nancy Pelosi declared "this will not stand", and soon the first failed vote was followed by the even larger $800+ billion successful bill.
If I'm not mistaken, the website bailoutmainstreet.com has already been discredited. It had dubious connections and little to no information as to who was behind it.
Great start, people.
"The question is now whether Obama will have the courage to take the ideas that won him this election and turn them into policy."
There's no question about this.... more than any one individual, obama played *the* pivotal role in providing the corporatists their ransom. In essence, he gave his himself an $850 billion campaign contribution... strapped onto the backs of American taxpayers.
THAT is what won him the election... he knows it works... that he can do it again with even more impunity... denying representation and continually fleecing the taxpayer to support his corporate masters' greed and his insatiable thirst for power.
He is as corrupt as any other corporatist politician. He is NOT the solution. He is the problem.
Want a reality check? Take just a quick peek at the talking points that are flooding the communication channels... It is all about "position adjustment" - for American taxpayers, you had better get intimately familiar with lowered (zero) expectations.
Translation: I got mine... you're on your own... and oh, yeah... I'm going to need another trillion or so for my "banking" buddies.
The honeymoon is over.
- the loyal opposition
"Hire Dean Baker ( Or James Galbraith or Naomi Klein) as your economy person! Baker, one of the few economists who saw the Crisis coming, has a well conceived stimulus plan to revive the economy through health care reform ! "
Naoni Klein is a Canadian so that would present some problems. James Galbraith would be interesting. (His father John Kenneth, was also born in Canada)
Dante
Lets take Galbraith. He's pretty good.
Thomas,
Yes Dr. Galbraith would be a good choice. I just finished reading his book,"The Predator State," and he sure impressed me.
Our youngest child (20yrs) is a student at the University of Texas @ Austin. Perhaps I can get her to ask Dr.Galbraith to accept the job should the new President-elect offer it to him. (lol)
"Our youngest child (20yrs) is a student at the University of Texas @ Austin. Perhaps I can get her to ask Dr.Galbraith to accept the job should the new President-elect offer it to him. (lol)"
Hey....it might work!
Glad she is with us. I'd bet she is having the time of her life at UT. Austin is the place to be for the young.
Thomas More November 6th, 2008 5:13 pm
"Our youngest child (20yrs) is a student at the University of Texas @ Austin. Perhaps I can get her to ask Dr.Galbraith to accept the job should the new President-elect offer it to him. (lol)"
Hey....it might work!"
Obama's economic advisers were just named, Warren Buffet, Paul Volcker, Robert Rubin, Larry Summers, and a fifth I didn't recognize and don't remember the name of. No Galbraith was mentioned though.
Lobo Gris
Lobo Gris
Thanks!
Darn it! Summers and Rubin I wouldn't have picked. Oh well. Volker is a good choice, he is no yes man.
TM, you are wrong. Volker was steadfastly behind the bailout. NO, he is a yes man.
And worse than that, Volcker had 8 years at the helm of the Fed (under Carter and Reagan) and all he did was raise interest rates sky-high to control "inflation" and drove Third World countries into debt peonage and U.S. farmers into bankruptcies and driving their tractors down the streets of American cities. Check him out in Klein's Disaster Capitalism, where he is described as administering the Volcker shock. (Those who forget history are destined to repeat it.)
Jerry D Rose, sand flea
You have points that are true, but remember, he stood fast in raising interest rates against a real firestorm of opposition. Without that rise in interest rates inflation would have continued to run rampant and our economy would have been devestated. Thats why I say he's no yes man.
Debt is a choice and eventually if you take on too much, you are going to suffer, just as we are now. Our pain hasn't even started yet. This recession is young and when we start feeling the pain, attitudes change. Its going to be bad. We bought our first house at 14% interest rate and were allowed because of our good credit to ONLY pay 5 points in closing. I wasn't fond of Volker then, but later when we refinanced at 9%, he looked better. At 7% he was downright handsome.
"(Those who forget history are destined to repeat it.)" I would suggest to you that this is exactly what we just did for the last 12 years.
Even if I'm wrong, Rubin is a much worse choice, so I'm at least 1/2 right!
Thanks to you both for your thoughts
"Glad she is with us. I'd bet she is having the time of her life at UT. Austin is the place to be for the young."
Thomas, I love the city (Austin) myself. She really enjoys going to school in Austin. Our family is scattered all over the place with our daughter in Texas, and our son at the University of North Carolina @ Chapel Hill, and my wife and I in Canada. (21st century family.(lol)
Thomas when we get back to the United States I will have to apply for citizenship. It gets lonely being the only non-American in the family. (lol)
Anyway it appears that President-Elect Obama has picked his ecomonic advisors. This guy is moving fast.
Dante
Come on down. We always have room for good folks!
He is moving fast. A lot won't like his selection of Rahm Emannuel as chief of staff, but I think its good. If he is going to avoid the early mistakes of Clinton he is going to neeed a guy like this. Congress is likely to cause him problems by trying to push far too much, far too early.
What "problems" with Canadians. There are no requirements of Cabinet officials, other than chain of succession.
I don't think Naomi Klein being a Canadian is much of an issue - Didn't stop Arnold "Governator" Swarzenneger from being elected in California.
I guess he's been a US Citizen for a long time, but he was born in Austria. So there's ways around Naomi's issue.
Barack could just say "Naomi, you are now an official US Citizen" and that would probably do the trick. ;)
whoah. Looks like you might have to come up with something else. Clearly there aren't many in the old school who want to help you.
And it doesn't bode Well. Rahm Emannuel? ---
Oh no. Looks like it's not morning in America after all. Looks like happy hour might be over soon, too.
Naomi Klein, whose SHOCK DOCTRINE is my bible for the understanding of these times, is right as usual about the fact that Obama will have no chance of delivering on his campaign promises unless he can somehow tame the same Wall Street beast on whose back he rode into the presidency. What neither she nor any commenters on this post have so far mentioned, there likewise there will have to be "lowered expectations" for domestic social needs until he lowers the monstrously high expectations for expenditures for wars that shouldn't be fought and for weapons systems that shouldn't be developed and maintained. But in a sense Obama rode that beast as well into the presidency is he put himself at the beck and call of an Israeli lobby that is the tail wagging the dog of U.S. foreign policy; our "staunch ally," Israel, is an extremely expensive mistress to maintain if we want to have any decent sort of "home" life.
Naomi Klein's Shock Doctrine illuminates the problem well.
In the cycle of Repug/Demok politics we've had in the USA for the last several decades - "lowered expectations" is what we always get when a Democrat finally wins. This is because the corruption and looting that happens during Repug Administrations always leaves the Demoks with a huge deficit, and other catastrophies to clean up. This thrills the blue dog contingent to have problems with the economy push any real peace and social justice issues "off the table".
American's lack of education and ignorance of history makes them fail to notice this pattern.
Let's see, Obama not only voted for the Wall Street bailout but actively encouraged others to do the same, all the while ignoring letters, e-mails, and phone calls that were 100 to 1 against it. And now a 180 degree turn around is being called for after you have already given him your vote and elected him. Remember that he needed your vote to get elected when he ignored you before, and now you expect him to listen you?
Lobo Gris
This is the start of a long fight. Sensible people know the money is gone. Paulson and the other sneak theives probably hoped to get this done quick & dirty and secretly.
So the fight is for accountability and a bulldoggish pursuit of disclosure about where the money is going and how it is being used. Either we can divert some of it to directly help mortgage payers, unemployed and small businesses or else this bailout should be made into the biggest public eye-opening educational event we have seen in a long time. We have to keep asking WHERE THE CASH AT?. (No endorsement of Little Wayne here).
We should help people like Naomi Klein to keep this issue in the limelight. We have to get on the media for facts. Write to them demanding coverage and analysis by people like Krugman.
Joe
Excellent post.
There are a number of 'first 100 days' email campaigns to Obama.
Transportation
http://t4america.org/
Just Foreign Policy
http://www.justforeignpolicy.org/involved/askBarack.html
National Security Archive alerts: Court rebukes CIA on Freedom of Information
http://www.nsarchive.org
Absolutely Naomi.
Obama owes his victory to his grassroots organization and they should morph into an activist group for executive accountability. They need to remind him why he got elected early and often.
Obama's choices to recycle the Clintonites that took the first steps that resulted in the current economic failure and an uber-Zionist as Chief of Staff do not bode well for his administration.
If voters had wanted another Clinton White House, they would have selected Hillary. They overwhelmingly did not.
Obama's Afghanistan plan is a non starter. Invading and occupying Afghanistan is no more legitimate than our invasion and occupation of Iraq.
Though Obama's campaign did start to bog down when he abandoned the progressives policies that won the primary and the economic tsunami worked in his favor, I do not think the selection of Palin did McCain any favors. For once the press did its job in revealing how unprepared Palin was for the national stage.
she proved to be drag on the McCain candidacy.
I only wish the press had done a better job of reporting on McCain's anger management problems and other personality defects that would make a dangerous occupant of the Oval office.
Obama could have done a Kerry during the last weeks of the campaign and retreat back to the progressive positions that won him the primary. The danger was that, like Kerry, it would be too little too late to inspire the kind of support he was able to garner because the nation blamed the economic mess on Bush.
Calling these banksters Bailout Profiteers doesn't do justice to the scope and longevity of their efforts. The bailout contract is the final step of the Federal Banking Profiteers' privatization of the federal Treasury Department, which was institutionalized with the passage of the Federal Reserve Act and the concomitant creation of the Federal Reserve Banking system. End the Fed and you end the profiteering.
"Bill Clinton's Third Term."
Hey man. It could have been worse. With a Mccain/Palin administration, you wouldn't even be lucky to get anything to eat. A president alone can't do everything. Obama may look like Bill Clinton to you but you cannot deny the fact that it sure beats a 3rd Bush/Cheney term any day.
Terrance Mitchell
Redfield, South Dakota
Exactly, stop the heist! May I also suggest arresting the Bush gang for War Crimes and Crimes Against Humanity? That would be dramatic positive change.
Rahm Emmanuel? Oh, no. As Bay Buchanan said this morning, "Rahm Emmanuel makes Newt Gingrich look like the Dali Lama."
Why can't we get new names and faces in government for a change? These retreads aren't going to instill confidence in anyone.
Galbraith would have been a more intelligent pick.
Galbraith would make a wonderful Secretary of the Treasury.
I agree! Good choice.
Barack Obama will have to take a big chance and put his 2012 reelection at risk in order to do the right things for this country. I'm betting that he is exactly the kind of guy who will do that. It is too early to judge him as just another politician, especially to do so solely on his choice of Emmanuel as CoS.
The author is right. The corporate bailout is robbery, and it was perpetrated by the very party that always cries "keep govt out of our lives" and always chastises citizens to "take personal responsibility." I am sure the hypocrisy is what turned many against the republicans at the end of the campaign. BOTH parties have a lot of repair work to do, to gain people's respect and support again. Obama's hereby put on notice that "more of the same" will not be acceptable. It's a lot on the shoulders of of one man at best, but if he succumbs to industry lobbying, he will be done like dinner.
It was the doublecross by the Clintons with Nafta and Daddy Bush with his
"New World Order". Why did Bill Clinton recieve $10,000,000 from the Saudies?
Why another ten million during the primaries?
We voted for Obama, not Hillary and her gang.
Will Opra and Obama wake up in time? Will Obama take a look at that Bail-out money?
Who is getting what? What about Main St?
We are in a major depression. Unless Obama acts now, we are doomed..
Who can save capitalism from itself?
Henry Paulson while an executive at Goldman-Sachs, made over 500 million dollars in pay, bonuses, and stock options. Maybe he could put this next bailout on his Visa card?
The bailout will inevitably fail. The creation and then payment of the bailout debt (by the US taxpayer) will ultimately leave the taxpayer with less to spend, causing their economy to drop even further, resulting in more job losses, less investment and, once again, a further downsizing of the economy. This economic animal is eating its own tail.
http://blogoffanddie.wordpress.com
http://theimpolitecanadian.wordpress.com/
I would never hit someone with a hockey stick, unless of course, we were playing hockey. Then I swing at anything that moves.
Much can and will be predicted about Obama's win. Whether Americans have once again been duped by the two party campaign season remains to be seen. Obama's choice for Chief of Staff is one indication that what we are seeing is over five billion dollars and two years spent to make sure that there is the ideal appearance of change rather than change itself.
There is something of the smell of public relations and advertising industry slight-of-hand here: change the colors and logos on the package and put NEW AND IMPROVED! on the same product and one is bound to generate interest and even enthusiasm... or at least buy time until everyone awakens to the fact that no real change has taken place.
One is tempted to hope otherwise. One also hesitates to interrupt the real emotion that has arisen due to the breaking down of boundaries made of hate and bigotry, especially among those who have been most direly affected by that hate and bigotry. But celebrations pass. Then what?
The Dominate O
O is rather overwhelming
the constance of a dominant sound
OOOOOOOOOOOOOOOO
like the scream of money
honing in on moony cheeks
squatting at the trough of desire
Oh Prophet O
Oh Prophet O
Oh Prophet O
All aboard the O
for a steep circular climb
to...
obliterate Osama?
with a collateral Oh Oh o bomb a?
Moony cheeked money
ushers in a new black don
as the empire fades in the dusk.
Spare some change please...?
Chump change trillions
for a chance at toxic sleaze?
just...
leave it in the can
Or for .....
change we can believe in
Yes the can.
ha! good one. thanks
Mr. Obama, put Elliot Spitzer as the SEC head and Nader as the the Attorney General. Then we will get change we can believe in.
Otherwise, it will be the SOS.
Eliot Spitzer... that's a good one.
Those two have the intelligence, moxy and single-minded bulldoggedness we need to get answers. Not a chance they will be appointed, although neither has done anything to hurt the general public.
But we should demand follow-through from our elected officials. Make it clear that we will not stop watching and want to know how OUR money is being spent. We want it to be used to help ordinary people, not to finance bank mergers, bonuses and all the other creative and slippery antics that continue to emerge.
Joe
The Electoral College votes have not been counted yet. This is a time of war. The Founding Fathers foresaw this situation: a reality into which the likes of John McCain ought to step. In the meantime Obama may be impeached before 20th January because he forged his birth certificate. Far too early to be talking of "transition".
People here seem to be missing the central point Naomi Klein is making in this article. She states quite clearly and quite concretely, amidst a flurry of absurd and presumably tongue in cheek hypotheticals, in paragraph seven: "We can forget about Obama making good on the more progressive aspects of his campaign platform." Her words. Her article. Her main point, missed over and over again by posters here.
Well, some posters have and some haven't stuck to the "point" of Klein's article, which point you correctly state in that short quote. We use these posts to go on personal tangents that sometimes stray from the author's point but that's ok, makes reading the posts seem more like a flowing conversation than somebody's lecture. But to the "point," I for one was on-point in my post on Nov 6 at 2:31 PM, only seeking to expand on Klein's point that it's not only the cost of rescuing the economy from the current morass that will make it impossible for Obama to deliver on his "progressive" agenda; it's that he's keeping an expensive "mistress," Israel, the support of whose military agenda is going to make it impossible to feed the "kids at home," the economic needs of the U.S. "Main Street."