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Another Bailout Joins the Goofball Economy
The whole thing is nuts. The economy is a shambles, saved from a free fall only by the Federal Reserve’s unprecedented promise of free money for banks for at least two years. That’s how long a seven-member majority of the Fed’s Open Market Committee expects it to take for significant relief to take hold for the 25 million Americans who can’t find full-time employment.
The 10-member committee’s three dissenters in Tuesday’s decision, all unelected Fed regional board presidents, are free-market ideologues who don’t believe the government has a role to play in reversing the nation’s economic disaster. One is a former Wall Street investment banker and vice chairman of Henry Kissinger’s consulting firm. The other two are University of Chicago school of economics disciples long committed to free-market purism and blind faith in the mathematical models that had much to do with radical deregulation and the subsequent collapse of the financial markets. ![](/sites/commondreams.org/files/imce-images/goofballeconomy.jpg ""How dare a credit rating agency that got it so wrong, and should itself be investigated for malfeasance in the creation of the banking meltdown, dictate public policy?" (photo: Jacob Bøtter)")
"How dare a credit rating agency that got it so wrong, and should itself be investigated for malfeasance in the creation of the banking meltdown, dictate public policy?" (photo: Jacob Bøtter)
That view led Minneapolis Fed President Narayana Kocherlakota, before he assumed his Fed position, to sign a petition that the libertarian Cato Institute placed in various newspapers opposing President Barack Obama’s economic stimulus plan.
The dissent of the three members is thought to have prevented the Fed from pursuing more vigorous action such as the anticipated “QE3” purchase of additional securities. As New York Times columnist Floyd Norris speculated, “perhaps the dissenters really want to essentially say something like ‘We’ve done all we can, and if the economy is still lousy, that is for someone else to deal with.’ ”
Meanwhile, Obama has been reduced to an impotent bystander promising vigorous budget cuts in response to Standard & Poor’s adverse credit rating. The president’s pathetic performance on Monday, as the market crashed, was the low point of his career. Nor did it help that the rush of investors to Treasury bonds validated his bold claim that the United States of America deserves a perfect credit rating. On that point he is right, but Obama’s failure to challenge the idiocy demanded by S&P, along with the Republicans—that government spending be dramatically cut in the face of an economic crisis—cast his remarks as terminally tepid.
How dare a credit rating agency that got it so wrong, and should itself be investigated for malfeasance in the creation of the banking meltdown, dictate public policy? For S&P to insist on massive government cuts that would only increase joblessness is like a burglar shifting blame for his crimes to the poor quality of locks.
This from a credit rating agency that, as NYT columnist Joe Nocera points out, “has consistently fallen short.” S&P judged Enron to be an exemplary company until shortly before the corporation imploded, and it gave its triple-A seal of approval to the toxic securitized mortgage debt that caused the great recession. There are serious problems with the U.S. economy, but they are not the ones that Standard & Poor’s outlined when it sent the stock market into a tizzy.
We don’t need draconian cuts in government spending at a time when the economy remains mired in deep unemployment, when state and municipal governments are shedding jobs and when the housing market is on life support. And if some Amercians thought that we did and voted to put irresponsible Republicans in charge of the House of Representatives, isn’t it the duty of the president and his fellow Democrats in control of the Senate to fight back? That’s called democracy, and we need more of it instead of the false unity for which Obama settled.
Sure, it would have been much better if a phony populist movement called the tea party had not been financed by fat cats out to preserve their unseemly tax breaks and thereby gained control of the House. That’s what undermined what S&P termed the “effectiveness, stability, and predictability of American policymaking and political institutions [that] have weakened at a time of ongoing fiscal and economic challenges. …” But, as S&P acknowledged with its downgrade after the congressional vote on the debt ceiling, the fact that the president caved was of no help.
The result is that Obama has agreed to effectively remove the elected federal government from the battle to restore economic health and instead left us to the tender mercies of the banker-dominated Federal Reserve, which, like the folks at S&P, condoned the reckless Wall Street policies that got us into this mess. At a time when we need a full-throated defense of the role of government in protecting the interests of a majority of Americans suddenly made deeply vulnerable by the chicanery of the financial oligarchy, we are denied even the logical clarity of a former community organizer who once promised hope.
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43 Comments so far
Show All"Impotent bystander"?!
Obama neither "settled" nor did he turn in a "pathetic performance".
What he and the democrats did was a brazen and manipulative ploy to push the agenda which Mr. Scheer would have us believe was forced upon them by their republican cohorts in crime.
In spite of all his knowledge, Mr. Scheer can't see the obvious.
Mr. Scheer, YOU are the pathetic one.
Nice to see everyone (well, most people) are getting it, despite this pathetic Democratic Party propaganda. You're correct, no one "failed, they just played different roles. Capitalism is dying and its rulers realize there's no more time for subtlety. You're watching a Smash-and-Grab robbery.
Capitalism is not dying (as you may wish). The rich are simply winning the class war, winning the Monopoly game. Ignorance and propaganda have turned far too many average citizens into tools of a highly sophisticated campaign favoring the rich. Over the next few years we will see some rioting such as has been occurring in Greece and the UK, but we can always find room for a few more prisoners (California excepted?). Here in Minnesota we have many practically empty jails (bring us your poor, your tired, your hungry...)
When they are deployed to deal with US riots, Northcom ,the US Army battalion that has been dedicated to "quelling domestic disturbances " since 2008 will make the UK and Greek cops look like Boy Scouts.
Capitalism is stronger than it has ever been, even back in the laissez faire era taxpayer funded corporate welfare was never as lucrative as it is for today's global capaitalists and the capitalists of that era may have owned a few governments whreas today they own nearly all governments.
Scheer needs to stop blaming the tea party. After two years of supply side legislation while the Democrats were in control, the tea party came along just in time to give Democrats cover so they could continue to drain the US Treasury into the hands of global capitalists at our expense.
Agreed. They are in a panic-ed "flight forward" to try to achieve long-cherished goals, and they see their opportunity melting before their eyes as they reach to grab the "prize" (never realizing the prize was life-as-a-human, and the singular chance to escape "the wheel"). Thus does the Dance of Maya lead the damned to their doom. But there is, wearily, always another chance to "get it right".
RE: Capitalism is dying and its rulers realize there's no more time for subtlety. You're watching a Smash-and-Grab robbery.
This statement has two things going on in it.
1) Capitalism is NOT dying, but it is in crisis. David Harvey says capitalism never really solves its crises, but it moves them around geographically. The difference is that geography now includes us! What we see with our current crisis, like the Great Depression, is tremendous consolidation of capital, the big capitalists are gaining much more power and wealth at the expense of the small capitalist, but mostly at the expense of the working class.
2) "There's no more time for subtlety." This is an important point. During a crisis like now, the true nature of capitalism is uncloaked. Gone is the facade of "liberal democracy." The true venal nature of capitalism or, as you say, "smash-and-grab robbery" becomes obvious.
What's dying is not capitalism, but the liberal illusion that capitalism is the "best system for the most people". Capitalism is more than compatible with feudal monarchies like Saudi Arabia, or dictators or fascism. The notion that capitalism and democracy have anything to do with each other is being challenged daily in streets around the world. Critically, the place where we are not yet seeing much push-back from working people is here in the USA - the center of the global counterrevolution.
Whats in a name - democracy - a word that has strong propaganda value.
"The notion that capitalism and democracy have anything to do with each other is being challenged daily in streets around the world."
That depends on how you define "democracy". If you define a democracy as:-
* a two party parliament where the elected of both parties get to go on "fact finding" guided tour holidays with all expenses paid by Israel, but referring to this as "bribery" is "antisemitic"
OR
* a system where the corporations and the rich control the media which determine who gets to be elected,
OR
* a system where the parliamentarians have to please the rich in order to get the campaign funds in order to re-elected, or to have cheap loans or to have the congressman's cleaning corporation get the contracts
OR
* all of the above
then I would say it has everything to do with capitalism.
If you live in a "democracy" in a smaller country where the elections are funded by foreign money, then you live in a country that has a government that is controlled by someone else, typically corporations associated with the empire. What we normally call "democracy" is really a code word for plutocracy.
Yes, the term "democracy" is full of propaganda"value". With a few significant exceptions, like the Paris Commune of 1871, democracy as an applied political doctrine, has been a sham. The Great Revolution of 1789, was a bourgeois, that is, capitalist revolution. "Liberty, equality, fraternity," were used as tools to placate the French masses without which the Revolution would not have been possible. But those "rights" were not intended for the masses by the capitalist class. This is also true of the American Revolution of 1776. Should we abandon rule by the people (the demos) just because the term has been distorted by those who would manipulate the masses? Should we abandon the term "truth" because it has been used by the church and harnessed as a tool of ruling class control? See the forest for the trees.
I think we are on the same page.
Understand the hidden meme at work, based on the culture's intrinsic racism:
Obama can't resist, but must jump up and say "Yes, massa -- I'll jump -- just tell me how high". Just shows that Black people, even smart ones, can't really lead -- natural born slaves, you know...
Seriously -- has any white president ever been said to be overwhelmed by the ruling class and congress as much as Obama is said to have been? Would a white president be given a pass and excused as really trying but just too weak to stand up? Would not a white man which has done what Obama has by now be universally condemned as the fascist he is??
Sure it's not exactly that simple, of course, but it's a real factor to look at, playing into the subconscious racism of many people who assume at some level that a Black just can't measure up. Isn't this like the compliant, comic relief and side kick roles that Blacks have had to play so often in the old movies and TV shows (when not playing the depraved violent villain)?
Consider the charges so often made that those who criticized Obama were racist (and those who criticized Hillary Clinton were sexist).
Think about it.
That thread may exist to some extent, but the same stuff was spread about Carter. Maybe that is the "Southerner thing". They talk slow - must be sorta slow.
Incrementalize tax rates upwards.
No matter how much tax Gates, Buffet, or their ilk, paid on their first billion, they should ALWAYS be made to pay more on their second billion.
A lack of aggregate demand as big as we face cannot be solved by monetary policy alone. --- Our economy (actually, most Western democracies) is stuck in the mud and the Congress and the President don't know what to do. They aimlessly stand off to the side and exhort the Federal Reserve to solve the problem by "pushing harder on the rope" rather than pass legislation to "pull" the economy out of the mire. --- How about a little good old fashioned fiscal policy rather than so darn much "austerity" ? --- The pattern we're in is looking more and more like the Great Depression. --- Get ready for the multiple dip Great Recession , at the very least.
"Congress and the President" DO "know what to do" and they have been doing it...systematically transferring wealth from 98% of the population to 2% of the population. Senators don't amass ten million dollar campaign war chests and Obama isn't going to amass a billion dollar 2012 campaign war chest unless they all deliver for the corporations funding those war chests.
The pattern IS indeed one of depression. Obama is a 21st century Herbert Hoover. At least Hoover just ignored the problems while things got worse. Team Obama has proactively made things worse than they would have been if he had spent the past two years just shooting hoops.
A commentator on NPR recently remarked that "Obama is the JFK for today's young Americans". My initial reaction was...I hope that is not true, but if it is, we better start calling them Generation Archie (Bunker) rather than Generation X.
Actually, Hoover did not ignore the depression. He kept pouring money into the banks, expecting that they would lend it out and get business rolling again. The banks just kept the money, making recovery impossible. Hoover kept telling the nation that "prosperity is just around the corner."
I take it you're talking about Herbert HUSSAIN Hoover? Oh, I meant B. H. Obama ;-(
I know it has been mentioned before but it bears repeating.
The trigger of the Violence was the Police beating to death a 16 year old protester who had been peaceably demonstrating in earlier protests.
Since 1998 333 persons taken into Custody by the British police (the bulk of these poor persons of "color") were beaten to death or died while in police custody for reasons unknown and since that time there has not been a SINGLE conviction of a Police officer for the same.
Duplicate post--please delete.
A very fine post, Jill. Cygnus hit the nail on the head, too.
I'd add that the whole world, via Fukushima, is now paying the price for various governments' refusals to prosecute officials who systematically destroyed the careers of nuclear whistleblowers.
Obama has made one fact crystal clear: HE MUST BE A ONE-TERM PRESIDENT!!!
Obama will be a one term president only if the Republicans really want him to be.
Obama has delivered more Republican legislation than most Republican presidents have, while giving cover for Republicans. Republicans play Brer Rabbit very well in complaining about how they dislike Obama, while getting nearly everything they want from him.
The Republicans will likely deploy their resources to take control of the Senate, which won't be very difficult and will give them even better results from Obama during his second term.
CMU LOL and fell on the floor. How true! repug thug bullies are getting everything they want thru a democratic senate and President. Good cop/bad cop. I wish it were really funny but it isn't - we the people our losing (have lost) our grip on democracy and the fascist corporate state has taken over.
Since the people have been complacent in this take over and have not taken to the streets, to do so now??? Probably to fat/dumb/broke! comfortable sitting at their computer complaining like we think it will do any good.
I haven't been able to articulate it but this is exactly what I predict also. I told my son that I thought Obama would be elected. Though I could hardly add any analysis. After all, why should he be? But, Ray, you said it, right here.
And the damned Democrats let him!
"The whole thing is nuts."
Only if you haven't been paying attention to the imposition of fascism on the American populous for the last 30 years, Mr. Scheer.
Again and again, journalists like Mr. Scheer and other respected members of the gatekeeping "left" consistently fail to paint an overall picture of what has been happening in this country by failing to use words that everyone can understand and instead treat each move by the fascist elite as singular and dissociated from any overall plan that is being imposed upon us.
Either that or they call intra-system remedies/changes all the while they seemingly unwittingly document that the fascist elite are ripping apart said system and turning it into the fascist playground that hasn't been seen in 60 years.
As has been stated above, Scheer and others documented the destruction of the rule of law through events such as the 2000 election and 9/11 but somehow failed to see where this destruction of the foundations of our society was headed.
Now that the horse is already well out of the barn, NOW it's nuts, huh?
Don't forget the most oft repeated line ..."NOBODY could have seen it coming", right?
That touches upon one of my sincerest wishes:
For the people to awaken to the fact and hold these fascists accountable who have been claiming to be the smartest, most competent and most able to "lead" us yet who somehow "never see it coming", "had no idea", "were taken by surprise", "were victims of circumstance", etc etc.
There comes a breaking point in a population when no excuse will save you as a leader.
No mitigating circumstance, no happenstance occurrences will be tolerated by a populous that has grow weary and therefore immune to your bs.
This is a dream I have for the people of the world. To finally have them clearly see through the manipulations used by the elite to shackle them to a reality in which they are serf and peons.
Actually, "Nobody Could Have Seen It Coming" might be the greatest slogan for the next revolution I could think of.
Scheer and Thom Hartmann (who coincidentally has a post today) have acted as mouthpieces for the corporate wing of the democrats for a long time. One more time we give free money to the crooks who created the problem, because if we don't they will shoot themselves (Cleavon Little, Blazing Saddles). We should take them up on their threat and let them do it.
You have to appreciate that Scheer was an early casualty of the disdain of the MSM print media because, I am sure, he was too radical. But, still, it took some time for me to decide to read this article. I often thinks he gives Obama too much of a pass, too. I often enjoys listening to him on the truthdig radio and I thought his interview, with his son, of Dennis Kucinich was excellent.
I think it is hard to get out of the habit of believing that system will solve from within. I have that habit. And Scheer is older than me. But there is nothing to suggest that this system has the insight nor will to solve from within.
And as for Scheer, he has the courage to print Chris Hedges.
So he often has _something_ to say. It's not perfect. I like him better when I listen to him. You tend to glimpse that he is really grappling with issues.
http://www.truthdig.com/report/item/kucinich_says_obama_got_the_deal_he_wanted_20110804/
This the result of that Holy Mantra of "Capitalism" and "Free Markets" and "Privatization".
They now own everything and the owner class can now dictate policy. Elections mean nothing. The Politicians take direction from the Banks and the rating Agencies and the Corporations which dictate what WILL be done.
This is very clearly Fascism.
Great comments. I think everyone on this thread sees clearly, and has contributed to the dialog. Tough to remain blind when so much is happening in plain sight.
SR, I was thinking of posting a virtually identical comment, but you beat me to it-- you early bird, you. ;)
O.S. You're just being nice so that I go easy on your masturbation joke in another thread. You boys have so much difficulty not thinking with your "other" head, some times... in any case...
By the way, at least 3 people besides myself have inquired as to whether you're doing any SERIOUS writing. Are you? You've certainly got The Skill...
Old Bear Roars Out
Doesn't Know Bull
In 2008 the European and American banks told their governments that if we don't give banks Trillions of dollars in taxpayers' debt banks will destroy the global economy.
In 2011 ratings agencies then opined how taxpayers owe too much debt, gotta cut back... way back.
They want to do this in the face of a world wide recession caused by the banks taxpayers gave Trillions to.
Now, the Europeans are informed they have to buy Italian and maybe soon French bonds with taxpayers on the hook for hundreds of billions of dollars more.
Notice the time compression of disaster scenarios, breaking down the system bit by bit while prolonging the inevitable decline as long as possible.
As even money becomes funnier we should do all we can to start a new world currency and leave the old world order behind us. It'll happen anyways so why not now?
It is our present world currency system that is screwing up our planet and piling debt onto our kids. If the nations of the world created a single currency and everybody worked or competed for the same dollar, then trade would be fair. We could then use our monetary power for humanity's survival and not just the chosen few.
Also, since the cellphone is a unifying identification device why not empower it with bio-metric identifiers enabling them for use as voting machines. This would be instant democracy, a world beyond our grasp.
The power of democracy and a new world currency would give us a chance to do the things that need to get done to save our children.
Since I hate cell phones, Facebook and all the rest of it, I don't know how to implement any plan of action. So if anyone reading this has the imagination and know-how to get the ball rolling, then God speed... we'll need it.
"The president's pathetic performance on Monday, while the stock market crashed, was the low point of his career."
Nope.
Monday was indeed pathetic and revealing, but in my opinion Obama's low point still was his West Point speech in late 2009, announcing he was escalating rather than reversing course in Afghanistan ("not a war of choice, but a war of necessity") while fully committing himself to institutionalizing the Bushies' global war on terror.
A president's terminally tepid failure to placate another day's downturn of the big Wall Street casino, blowing his scripted lines as the perpetual smiley face for American corporate capitalism, is far less important than betraying the public interest (and the people who elected him in 2008) on matters of life and death.
"For S&P to insist on massive government cuts that would only increase joblessness is like a burglar shifting blame for his crimes to the poor quality of locks."
Nice anology and turn of phrase, if a bit imprecise.
Standard & Poor, Goldman Sachs, Citibank, and the Wall Street bankster high rollers all pocketed billions in profits by palming off exotic, toxic securities to investors globally as AAA - being good as gold and safe as a US government bond. When this grandiose Ponzi scheme was exposed and the bubble burst in the last quarter of 2008, first Bush and then Obama made good on the fraud by bailing them (and AIG) out, courtesy of the public treasury. In gratitude, S&P last week downgraded Uncle Sam's credit rating to AA+, thus encouraging the smartest of the smart money to flee elsewhere in the global financial marketplace.
It's all the fault of the cops and the locksmiths. Help me, help me. Please stop me before I steal again. Standard & Poor's were more like the outside lookout, posing as a member of the local neighborhood watch, rather than the actual burglar.
Bill from Saginaw
to investors globally...
Imagine how our tax dollars were used to shut down the global lawsuits against these corporations and the US.
Criminal actions with no consequence, indeed, reward.. by those we have empowered as "leaders." The British are taking action against the hypocrisy and failure of their leaders.
Never forget the very rich are pocketing billions by selling short. This was not a surprise to them. It made a lot of people much richer that before. Once again, the people get screwed by the politicians and super rich. Obama betrayed America one more time. I WILL NOT VOTE FOR OBAMA no matter what the option is. Rewarding betrayal is simply beyond what I can stomach.
looking at his job after he left columbia, a probable c.i.a. asset...who knew how to keep getting his bread buttered.....