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alan greenspan
Don't Mourn Alan Greenspan
He never mourned for you.
Jun 24, 2026
Alan Greenspan, who served as chair of the Federal Reserve from to 1987 to 2006 and who died on Monday, was a monster. He was the Henry Kissinger of economic policy. Like Kissinger, he was mistakenly considered a genius. Reporters, businesses, and many members of Congress hung on his words—more accurately, his jargon-filled word salad, which obscured more than it explained—to understand what was going on in the economy. Despite the fact that his policies, like Kissinger's, were a blatant failure, he was, also like Kissinger (who also died at 100), still taken seriously by the media after he left government service, and made a ton of money as a consultant. Both men caused enormous harm and suffering for which they were never held accountable.
The New York Times obituary has a few paragraphs about writer and pseudo-philosopher Ayn Rand's influence on Greenspan, but doesn't do justice to the fact that Rand's inner circle wasn't just a discussion group. It was a cult. Greenspan absorbed her belief that selfishness was the highest principle. It was that view that guided his economic thinking, including when he was Fed chair, and before that, chief economic advisor to President Gerald Ford.
The core of Rand's influence was Greenspan's belief that government should play no role in regulating business. He believed that corporations could police themselves without any government rules. He reflected Rand's belief that corporations' self-interest and greed, and those of major shareholders, would lead them to behave responsibly.
Greenspan was appointed Fed chair by Ronald Reagan in 1987 and reappointed by George H.W. Bush, Bill Clinton, and George W. Bush. He was also part of the corporate ruling class, serving on the boards of several Fortune 500 corporations, including Mobil Oil, J.P. Morgan, the Aluminum Corp. of America (Alcoa), Morgan Guarantee Trust Co., Automatic Data Processing Inc., Capital Cities/ABC, Pittston Company, and General Foods.
Greenspan's influence, along with the intense lobbying by the banking industry, provided the justification for the dismantling of dismantling of decades of government bank regulations, providing lenders with the leeway to engage in an orgy of mergers, speculation, and risky and racist lending practices that ultimately led to the collapse of major Wall Street firms.
The banking industry's greed—its insatiable appetite for profits and wealth—led to the 2007 mortgage meltdown, the implosion of the housing market, the near-collapse of the financial industry, and the breakdown of the whole economy, including widespread layoffs and foreclosures, from which we have still not fully recovered. But it was made possible by the see-no-evil views of Greenspan and his ilk.
In the late 1990s, during Greenspan's watch at the Federal Reserve, banks and private mortgage lenders began pushing subprime mortgages, many with “adjustable” rates that jumped sharply after a few years. These risky loans comprised 8.6 percent of all mortgages in 2001, soaring to 20.1 percent by 2006. That year alone, 10 lenders accounted for 56 percent of all subprime loans, totaling $362 billion. These loans were a ticking time bomb, waiting to explode.
Starting in 2007, housing prices fell by third. Americans lost $7 trillion in wealth. Over 5 million Americans lost their homes. The drop in housing values affected not only families facing foreclosure but also families in the surrounding communities because having a few foreclosed homes in a neighborhood brings down the value of other houses in the area. The neighborhood blight created by the housing collapse was much worse in African-American and Hispanic areas because they were the primary victims of subprime loans and almost twice as likely as whites to lose their homes to foreclosures.
Brooksley Born, chairwoman of the Commodity Futures Trading Commission from 1996 to 1999, wanted her agency to regulate derivatives and other exotic financial investments (including credit default swaps) that she accurately predicted were too risky and would lead to disaster. But Greenspan, along with President Clinton’s Treasury Secretary Robert Rubin and economic advisor Larry Summers, stopped her from exercising the kind of regulatory authority that would have prevented the calamity. In 2000, Edward Gramlich, a Federal Reserve Board member, repeatedly warned Greenspan about subprime mortgages and predatory lending, which he said jeopardized the twin American dreams of owning a home and building wealth. He tried to get Greenspan to crack down on irrational subprime lending by increasing oversight, but his warnings fell on deaf ears.
Greenspan was the leading culprit of the policies that led to the economic collapse. He allowed the banks' short-sighted gluttony to cause enormous human suffering.
It wasn’t until the system imploded that Greenspan gained any insight about the fundamental flaw of his belief that greed is the best operating principle for the economy. In 2008, testifying before the House Committee on Oversight and Government Reform, Greenspan admitted: “Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief…. This modern [free market] paradigm held sway for decades. The whole intellectual edifice, however, collapsed in the summer of last year.”
Of course, there was plenty of evidence throughout history that big corporations do NOT behave responsibly unless they are required to do so by government regulations and enforcement. This has been especially true of banks. But because Greenspan was such a libertarian ideologue, in thrall to Rand and others, he could not, or refused to, see what was right in front of him. For the millions of Americans who lost their homes, their jobs, and their small businesses through no fault of their own. Greenspan's self-awareness came much too late.
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Alan Greenspan, Longtime Fed Chair and Ayn Rand Disciple, Meets Ultimate ‘Invisible Hand’
"For decades, he preached that the self-interest of the predator was the invisible hand of the common good," Yanis Varoufakis said after the man who led the US central bank under four presidents died aged 100.
Jun 22, 2026
Alan Greenspan, whose policies during nearly 20 years as US Federal Reserve chair fueled soaring economic inequality and helped create the conditions for multiple economic crashes, died Monday at age 100 after a long battle with Parkinson's disease.
While many corporate media outlets published hagiographic obituaries lionizing the "Maestro" who presided over nearly two decades of low inflation, rising stock prices, and American economic confidence, critics focused on Greenspan's role in promoting dangerous deregulation and "easy money" policies that inflated financial bubbles, with sometimes disastrous results.
Robert Reich—who served as US labor secretary under President Bill Clinton during all of Greenspan's tenure—called him "in many ways the most powerful person in America" during that era.
"If any single person was responsible for the financial crisis of 2008, it was Greenspan."
"He maintained an iron grip over the Fed, and almost single-handedly decided on interest rates," Reich wrote. "He essentially fired George H. W. Bush by raising interest rates so high (ostensibly to ward off the inflation then threatening the economy) that the economy took a dive, and voters blamed Bush. This was enough to convince my boss, Bill Clinton, to do exactly what Greenspan wanted—which was to reduce the federal budget deficit and thereby destroy much of the agenda Clinton ran on (and I helped create)."
"I don’t want to speak ill of anyone who has passed. Greenspan was an extremely charming, intelligent, and thoughtful man," Reich added. "But the truth must be told: If any single person was responsible for the financial crisis of 2008, it was Greenspan. That crisis—the worst collapse since 1929, which led to the worst recession in decades, in which millions of Americans lost their jobs, savings, and even their homes—resulted from the deregulation of Wall Street that Greenspan advocated."
Former Greek Finance Minister Yanis Varoufakis wrote on X: "His epitaph? A singular, glorious confession, 'I found a flaw in my model of the world.' A flaw, he said, as though it were a leaky pipe, not a total collapse of the intellectual architecture that anointed him Oracle. For decades, he preached that the self-interest of the predator was the invisible hand of the common good.
"Then, in 2008, the beast devoured the table, and to his credit, he blinked, admitting that his entire worldview—the one that central bankers canonized and the world swallowed—was a fairy tale for rentiers," Varoufakis added. "He did not, of course, admit to culpability. That would require a moral compass, a device notably absent from his Ayn Randian toolbelt. No, he merely noted the flaw, as a meteorologist might note a gust of wind, and returned to his well-earned silence."
Born 10 miles from Wall Street in Manhattan's Washington Heights during one of the most infamous economic bubbles of all time, Greenspan was a protégé of libertarian writer and philosopher Ayn Rand and was influenced by the Atlas Shrugged author's moral defense of capitalism, her fierce advocacy of deregulation, and her insidious insistence that self-interest was socially beneficial.
Their relationship cooled as Greenspan embraced more mainstream economic policies despised by Rand and gradually became a leading steward of the very sort of state-shepherded system she deeply distrusted.
After heading President Gerald Ford's Council of Economic Advisers, Greenspan was appointed chair of the Fed by President Ronald Reagan in 1987. He would remain in the post well into George W. Bush's second term.
Greenspan generally favored low interest rates, especially after crises like the 1987 stock market crash, the 1998 Long-Term Capital Management crisis, and the 2001 recession. His fame grew after he suggested that the economy might be experiencing a tech-driven “productivity miracle," language that many investors took as validation that traditional valuation limits were obsolete.
Critics would later call it a "productivity mirage."
Staunch devotion to low interest rates by Greenspan's Fed boosted stock prices and real estate values under "easy money" policies. Many investors came to believe that the Fed would intervene aggressively whenever markets fell sharply—the so-called "Greenspan Put."
However, since ownership of financial assets (and the firms that sell and promote them) is concentrated among the wealthy, it was the rich who benefited most from Greenspan's polices. When bubbles burst, as they did after the dot-com boom that ended in early 2000 and during the 2008 global financial crisis, the rich bounced back thanks to their diversified portfolios and bailouts, while middle- and lower-income households were wiped out through asset devaluation, foreclosures, and job losses.
"It is no exaggeration to say the global financial crisis of 2008 had an enormous and lasting impact on American life and the way ordinary people view elites," New York Times global economic correspondent Peter S. Goodman said on social media. "It is also no exaggeration to say that Alan Greenspan has as much responsibility for the crisis as an individual can."
"For those not old enough to remember, it is difficult to state his aura during his time of greatest influence," Goodman continued. "When he told Americans that they should buy houses and use variable-rate mortgages to do it, they listened. Much is made of his econ jargon-laden vernacular that went over the heads of nearly all listeners."
"That was central to the mystique," he added. "When he went to the Hill and spoke to Congress, most people had no idea what he was talking about but assumed that smarter kids did. And so his quasi-religious faith in the efficiency of markets as the ultimate insurance against risk went unchallenged and became dogma, and the risks kept building."
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Bernie Sanders Wants to Expand Social Security
Social Security is critical for massive numbers of Americans, yet many Republicans and Democrats have wanted to destroy it. Today, Bernie Sanders introduced new legislation to strengthen the program by taxing the rich
Feb 13, 2019
Social Security was signed into law by Franklin Roosevelt in the 1930s to guarantee workers and their families an income if they retire, become disabled, or if a breadwinner dies. At the time, Republicans and conservative Democratic lawmakers disparaged the legislation as "socialist," and the American Bar Association and US Chamber of Commerce decried it as an attempt to "Sovietize the country."
Today, Social Security plays a major role in safeguarding tens of millions of people from destitution--not just people over the age of sixty-five, but millions of children too. It is by far the most significant anti-poverty program in the country. Which is why Vermont senator Bernie Sanders has introduced the "Social Security Expansion Act" to expand Social Security by requiring the wealthy to contribute more equitably to our public retirement system and preventing them from exploiting it for personal gain.
Over the last thirty years, skyrocketing inequality has threatened Social Security's survival. The wealthiest have captured an increasing share of income gains above the taxable earnings cap, while workers' wages have flat-lined. This trend has shrunk the share of national wages being taxed to fund Social Security. That's why the program's "total cost is projected to exceed its total income (including interest) in 2018 for the first time since 1982," according to Social Security's Board of Trustees.
For decades, conservatives on both sides of the aisle have tried to raid Social Security to bankroll corporate tax cuts and/or turn it into a profitable industry. Sanders's legislation pushes back on this agenda.
Social Security Under Attack
In 1976, Ronald Reagan ran for the GOP nomination on a program of "voluntary Social Security" in which workers could choose to make their own retirement investments. The proposal was essentially a privatization scheme that sought to end the universal character of Social Security by allowing the rich to opt out and starving the system of critical revenue.
As president, Reagan appointed a blue-ribbon commission headed by Alan Greenspan to address the program's future solvency. The Greenspan Commission recommended payroll tax increases, which were passed in 1983 in bipartisan fashion. The tax was particularly regressive, however, as earners in middle brackets paid a much larger share of their income than those at the top due to a low income ceiling. In a particularly audacious show of state-facilitated wealth transfer, the surplus revenue generated by Reagan's tax on working people was used to offset the costs of his extensive tax cuts for corporations and the wealthy.
Democrats followed suit. During the 1984 election, the Democratic Party strategized running against Reagan on a program of "fiscal responsibility," including Senator Paul Tsongas' A Call to Economic Arms, which painted a doomsday picture of "crushing and unsustainable debt" that, he argued, required entitlement reform and a cut in the capital gains tax to encourage long-term investment. After resigning from the primary, Tsongas joined billionaire deficit hawk Pete Peterson under the Durst debt clock in New York City to cofound a bipartisan "entitlement reform" group called the Concord Coalition.
In 1992, billionaire presidential candidate Ross Perot advocated means-testing programs like Social Security and Medicare, claiming that he could save tens of billions by cutting benefits. Bill Clinton called Perot's plan "a full-scale assault on the Social Security system, undermining the universality of the program."
But Clinton, too, had run on a program of "leaner, not meaner" government and "no more something for nothing." Clinton's acceptance speech for the Democratic Party nomination telegraphed how his "new covenant" would cut entitlements, facilitate school choice, and promote "a new approach to government...that understands that jobs must come from growth in a vibrant and vital system of free enterprise."
According to conservative economist Martin Feldstein, Clinton effectively "moved the discussion of investment-based Social Security reform away from an ideological debate about the merits of government versus private systems to the more technical issues of how to design a mixed system that includes both pay-as-you go benefits and investment-based defined contribution annuities."
The "post-partisan" austerity politics of the 1990s inside the Beltway was bolstered in supposedly grassroots groups. Pete Peterson played a leading role in founding and bankrolling youth-led astroturf groups that mixed deficit fear-mongering with downright ageism against seniors to propagandize cuts to Social Security, Medicare, and Medicaid, and ultimately, privatization.
One such group, "Lead... or Leave," put an ultimatum to lawmakers: cut the federal deficit in half over the next four years, or leave office. This gang of Wall Street youth scapegoated elderly people, claiming that when baby boomers start "gobbling up pensions and health care benefits, a shock wave will blast people from their homes, rapidly plummet millions into poverty, and threaten the economic security and financial stability of our entire nation." A torrent of conservative Gen X groups echoed this view, backed by far-right foundations, Wall Street banks, and major multinational corporations -- all of which stood to gain big from privatizing Social Security.
After George W. Bush's failed attempt to privatize Social Security in the mid 2000s, Barack Obama ran on a program to strengthen it. Two years into his presidency, however, he charged the National Commission on Fiscal Responsibility and Reform (the "Simpson-Bowles" commission) with finding ways to reduce the federal deficit and balance the budget. The commission failed to reach consensus, but its recommendations included a steep rise in the retirement age and decreased cost-of-living adjustments (COLA) -- both major pillars of austerity-minded, deficit hawk orthodoxy.
In one of the more blatant shows of the Clinton Democrats' neoliberal agenda, the Clinton Global Initiative University partnered with the Peterson Foundation in 2010 to launch a student campaign called "Up to Us," a year-long competition, judged by Simpson, Bowles, and Chelsea Clinton (!), in which students from major universities ran campaigns to "raise awareness about fiscal sustainability."
The campaign's name was derived from the neoliberal mantra of "choice" and "personal responsibility" embedded in Obama's 2009 D-Day speech: "Our history has always been the sum total of the choices made and the actions taken by each individual man and woman. It has always been up to us." In 2012, Up to Us was launched at ten major universities, but grew to include over one hundred in 2018.
Despite the failure of Simpson-Bowles, Obama used his 2014 budget to lure Republicans into a deficit reduction deal with a proposal to institute "chained-CPI," a COLA calculation that would reduce Social Security benefits. I was working for Bernie Sanders at the time when he rallied with Social Security Works and other groups outside the White House and helped deliver a petition to expand Social Security (and oppose chained-CPI) signed by some 2.5 million people. Sanders also led a coalition in Congress to pressure Obama to abandon chained-CPI, which he eventually did.
A few years later, when Donald Trump ran for president, he said that he would "do everything within my power not to touch Social Security, to leave it the way it is; to make this country rich again" (a far cry from his likening Social Security to a Ponzi scheme in 2000 and claim that "privatization would be good for all of us").
Instead of strengthening Social Security, as Trump promised, the GOP passed a $1.5 trillion tax cut for the country's wealthiest, thereby swelling the federal deficit. Senate majority leader Mitch McConnell blamed the deficit rise on "a bipartisan reluctance to tackle entitlement changes because of the popularity of those programs," openly naming Social Security, Medicare, and Medicaid.
Trump advisor Sam Clovis expressed passive support for McConnell's view at the Pete Peterson Fiscal Summit that year, saying that the administration was open to cuts in Social Security and Medicare. Koch Brother acolyte Paul Ryan, for his part, introduced a Balanced Budget Amendment in the House. And at a 2018 event sponsored by the American Legislative Exchange Council (ALEC), then-Office of Management and Budget director Mick Mulvaney indicated that Social Security cuts are going to be necessary.
Against false claims by austerity-minded Republicans and Democrats, Social Security does not add one penny to the deficit. It is self-financing by design. Roosevelt made that clear when he was devising the program: "We put those payroll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and their unemployment benefits. With those taxes in there, no damn politician can ever scrap my social security program."
It is true that Social Security's tax base has eroded, in part because of increased income inequality and the high costs of health insurance, but also because each year the US Treasury borrows Social Security surplus revenue and spends it on other things.
Therein lies the redistributive aspect of austerity politics today: cut taxes for the rich, offset the loss in revenue by raising taxes on working families, and assure them that their tax money is being set aside for retirement. After that money is eaten up through tax cuts, defense spending, and other forms of corporate welfare, people who have worked their whole lives and want to retire with dignity are told "we can't afford it."
The Expand Social Security Act
The legislation that Bernie Sanders proposed today goes in the opposite direction of austerity politics by strengthening and expanding Social Security.
On the revenue side, it lifts the cap on payroll taxes so that the wealthy pay a more equitable share. Part of the reason why Social Security is now spending more than it takes in is because extreme income growth at the top, and stagnation at the middle and bottom, has created a situation in which the share of earnings above Social Security's tax cap has nearly doubled, from 10 percent in the late 1970s to 18 percent today.
That means that a billionaire pays the same amount into Social Security as someone who makes $132,900 a year. While people like me and most people I know pay payroll taxes on 100 percent of our incomes, ultra-wealthy figures like Jeff Bezos, who make most of their money on investments, pay only a minuscule proportion -- as little as .00028 percent -- for the same maximum benefits.
By mandating that people who make over $250,000 a year pay full Social Security taxes, including taxes on unearned income, Sanders projects that Social Security would be solvent for the next fifty years and raise enough revenue to increase benefits across the board, along with expanding them for survivors, low-income seniors, and children of people with disabilities.
It would also allow the Social Security Administration to use a more accurate cost-of-living adjustment formula, CPI-E, that factors in the spending habits specific to seniors.
Right now, more than three in five seniors depend on Social Security for most of their income. One-third rely on it for nearly all (90 percent or more) of it. Without Social Security, the poverty rate among seniors would be nearly 41 percent instead of just under 9 percent now.
"Scrapping the cap" is not a radical idea: lawmakers have raised the cap several times over the years and in 1994 eliminated it entirely for Medicare. Plus, it would only affect a small portion of the population. The Center for Economic and Policy Research has estimated that taxing income over $250,000 would only impact the top 1.5 percent of wage earners.
Sanders' legislation comes after another Social Security expansion bill introduced recently in the House by Democratic representatives John Larson, Conor Lamb, and Jahana Hayes, though their bill increases benefits by scrapping the cap a bit higher, above $400,000.
That legislation has 203 cosponsors and counting, so it has a very good chance of passing. Sanders's bill is supported by many of the presidential hopefuls in the Senate, including Cory Booker, Kirsten Gillibrand, and Elizabeth Warren.
What this means for 2020 is that the Clinton-Obama austerity politics of the not-so-distant past may have finally reached their limit. Americans are sick of having to do more with less. Billionaires and millionaires are going to have to pay up.
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The Party of Ideas
A pity they're all crackpot ideas.
Dec 26, 2018
I recently attended a conference at the Niskanen Center. It was a think tank gabfest at which the participants were disillusioned conservatives hoping to chart a course toward a saner political center-right. Jonathan Chait did a near-ecstatic write-up of the meeting and its promise of a conservative movement with fewer XYY chromosomes. Jeet Heer was less optimistic.
"These are but a few of the crackpot nostrums peddled by conservatives in their supposed intellectual golden age."
What impressed me, however, was the elegiac note struck even by those thoroughly disenchanted participants who believed that American conservatism had not been hijacked by know-nothings, but contained the seeds of its own perversion.
They were almost uniformly nostalgic about the early 1980s, when most of them turned to the Republican Party. "Bliss it was in that dawn to be alive. But to be young was very heaven," or so it once seemed to these conservative apostates looking to the past. Back then, there was intellectual ferment on the Right, and the GOP was the party of ideas. But what were those ideas when considered in the cold light of empirical reality rather than soft-focus nostalgia?
Thirty-five years have given us plenty of time to test the truth of the main tenets of the Republican coalition when applied across economics, national security, social policy, and governance. Several of the most significant ideas follow:
Starve the beast. This was a popular rationale for tax cuts (beyond the real, tacit one of further enriching political donors) offered by reigning conservative demigod Milton Friedman. If you reduce revenue, it will force hated Big Government to shrink accordingly. Not only has this scheme never worked out, Republican administrations have expanded the national debt significantly more than Democratic ones.
Tax cuts pay for themselves (or even increase revenue). This absurd myth is still being mouthed by true believers like Paul Ryan, even as he leaves the speakership with an unprecedented record of fiscal failure at a time of a generally good economy.
The crazy implication of this tax-cut theology ought to be that if you cut taxes to zero, revenues will be infinite. This theory and "starve the beast" also achieve the difficult feat of each being completely wrong while flatly contradicting one another. It's like believing simultaneously in the Young Earth Creation and Steady State models of the universe - two contradictory and demonstrably false hypotheses.
Efficient markets hypothesis. Wall Street must, by a Newtonian law of nature, allocate capital and risk in the most efficient manner possible. Therefore, who needs regulations? A glance at the numerous financial panics throughout history ought to have disproved this idea, but Federal Reserve board chairman Alan Greenspan embraced it along with Ayn Rand's other crank notions. In 1999, Brooksley Born, chair of the Commodity Futures Trading Commission, attempted to argue that the near total deregulation of the futures market was a bad idea. Greenspan and the rest of the free-market establishment mowed her down, and so one more cause of the 2008 financial meltdown was set in concrete.
Government is the problem. Uttered by no less than Saint Ronnie, this sentiment is the leitmotiv of conservative thought. Funny, though, it somehow excludes the Pentagon, which consumes more than half the discretionary budget. And it's rarely practiced by those who preach it (many of whom have spent entire careers on the federal payroll). The disproportionately Republican voters of the hurricane belt expect FEMA (an agency that some conservatives otherwise believe exists to put them in concentration camps) to promptly write a check for damage caused by choosing to build in a flood zone. (Personal story: as a budget committee staffer, I got considerable phone traffic from the office of Mississippi Senator Trent Lott about expediting relief when Katrina wiped out the senator's house in Pascagoula). This reflex has become so Pavlovian that residents of Harlan County, KY, severely dependent on federal aid to prevent brute starvation, bitterly denounce government.
The gold standard. What John Maynard Keynes called the barbarous metal is an object of totemic worship by conservatives. Beginning with the Reagan candidacy, it has been a hardy quadrennial in GOP platforms. It is a product of the fallacy of misplaced concreteness: because you can see and touch gold, it represents for some deluded souls an avatar of value more lustrous than real wealth produced by labor.
In reality, the gold standard was only common from the mid-1870s until 1914 (a period characterized by many international panics), and was promptly suspended during World War I, when countries fighting for their lives could no longer afford the luxury of gold theology. Great Britain's postwar attempt to restore the gold standard was a failure, and virtually all countries abandoned the classic gold standard during the Depression, opting for a hybrid gold-exchange standard which itself collapsed in 1971.
Look at any conservative website, though, and advertisers are usually hawking overpriced gold coins; half-baked schemes to reinstate the gold standard frequently appear even in "respectable" conservative publications. President Trump has advocated the gold standard. Given his recent reverse-Midas touch with the stock market, be very afraid.
Run government like a business. This chestnut is rarely questioned, although a moment's thought proves it fallacious. Businesses sell products to customers for profitable revenue. Government is a citizens' compact to provide a gamut of services from policing to disease research to protecting land held in common to national defense, all financed by taxes. Government officials must obey governmental and constitutional rules; they are not autocratic CEOs who run their firms as they see fit.
The analogy is even more strained given that Republicans often seem to choose Enron as their governance model. In line with its mantra that government doesn't work, the GOP sets out to make it a self-fulfilling prophecy by adopting an exploitative rather than public service model. The merger of government with predatory business practices has now reached a culmination in the Trump administration, where everything from the location of the FBI headquarters to the security of the Middle East hinges on the private and opaque financial interests of the Trump Organization.
Law and order/personal responsibility. In the 1980s and 1990s, the GOP styled itself the Party of Personal Responsibility: "no defining deviancy down!" as scolds like Bill Bennett incessantly reminded us. Republican amendments to crime bills competed to be the toughest on crime, with capital punishment preferred. Many liberals called it coded racism, but it ultimately became something even worse: more like the Leninist who-whom principle whereby something is only a crime depending on the political status of the perpetrator.
Sexual harassment ceases to be heinous when potentially committed by a GOP aspirant to office, and we hear a lot these days about how campaign finance violations or even conspiring with an adversarial foreign power are mere "process crimes" if they're even illegal. Once upon a time, crack cocaine abusers deserved life imprisonment and traffickers death; now that opioid abuse is literally destroying a state that Trump carried by 42 percent, the GOP is suddenly all about compassion and the need for treatment.
Authoritarianism good/totalitarianism bad. Back in the early 80s, right-wing talking head Jeane Kirkpatrick caused a stir when she theorized that authoritarian regimes were to be tolerated, even indulged, because somehow they would evolve into democracies. But totalitarian regimes, meaning communist ones, were incapable of spontaneously democratizing and had to be resisted tooth and nail. This notion was prompted by the need to explain U.S. support for regimes like Chile or South Africa, while we opposed ones like Nicaragua. Rather than analysis, it was basically arbitrary labeling: four legs, good, two legs bad.
The fall of the Berlin Wall was massive disproof of the theory, but so are subsequent events: there is no consistent pattern to the transformation of either so-called authoritarian regimes or totalitarian states into democracies - or to the now-frequent backsliding of democracies into despotism.
There have never been rational criteria for U.S. obsequiousness toward feudal tyrannies like Saudi Arabia while we remain unremittingly hostile to Iran, which at least has something resembling a parliament. Trump, as usual, has carried Kirkpatrick's scheme to a bizarrely ironic conclusion: he prefers authoritarian rulers like Recep Erdogan or Mohammed bin Salman to democratic leaders responsible to their legislatures.
Blame America First/liberals hate America. This dogma got its legs when - again - Jeane Kirkpatrick pontificated that those critical of US foreign policy just wanted to "blame America first." It culminated in the common post-9/11 belief that anyone skeptical of the existence of WMD in Iraq hated America. But like many beliefs (voter fraud, "class warfare," etc.), it contains a massive dose of psychological projection. American conservatism is steeped in a cultural pessimism that sees our best days behind us, with America forever ruined by minorities, foreigners, and socialists (and sometimes uppity women).
Likewise, conservative economists like James M. Buchanan were never comfortable with American democracy, and felt the need to ring-fence billionaires' property rights against it. Fundamentalists see secular society as irredeemably sinful; those who are Christian reconstructionists want to overturn the Constitution in favor of theocracy. NRA-style gun nuts posit a sacred right to armed insurrection and overthrow.
Examples of this mentality include Jerry Falwell saying America got what it deserved on 9/11 (because: gays) and a legion of Trump apologists rationalizing that collusion with a hostile foreign power is harmless - or maybe, by means of Republican alchemy, even a higher act of patriotism.
These are but a few of the crackpot nostrums peddled by conservatives in their supposed intellectual golden age. While movement eggheads like Milton Friedman seem like hopelessly unworldly lunatics (he once posited that we didn't need a Food and Drug Administration because manufacturers would ensure safe products out of market efficiency and the goodness of their hearts - yeah, sure they would), they prevailed over time.
The infiltration and dominance of the Republican base by religious fundamentalists, whose creed is magic thinking reinforced by unwavering obedience to accepted authority, helped metastasize this syndrome of dogmatic illogic. It was also boosted by the rise of an integrated, conservative media-entertainment complex, whose non-stop, nation-blanketing repetition of falsehoods assisted their popular acceptance.
The conservative mainstreaming of pernicious ideas gradually overcame a more cautious postwar American pragmatism, dearly won after the misery of the Great Depression and the horror of World War II. The political movement that started as what Keynes described as the "frenzy [of] some academic scribbler of a few years back" has now, under Donald Trump, become like the children gone savage in Lord of the Flies, heeding not reason but the rattle of bones and the beat of tom-toms.
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The Future of Social Security, Medicare and Medicaid Is on the Ballot This November
Right-wing extremists have never been subtle about their goal to eliminate all three programs
Oct 17, 2018
Everyone who cares about their Social Security, Medicare or Medicaid needs to vote on November 6. If Republican politicians and the donors who own them retain full control of Congress, they are determined to finally succeed in their longstanding goal of ending all three programs.
Right-wing extremists have never been subtle about that goal. As the fight over President George W. Bush's 2005 proposal to privatize Social Security was heating up, a leaked memorandum from Bush's director of strategic initiatives, dated January 3, 2005, and marked "not for attribution," put the fight over the program in context: "this will be one of the most important conservative undertakings of modern times." If that weren't clear enough, the memorandum concluded with a startling and refreshingly frank assessment: "For the first time in six decades, the Social Security battle is one we can win."
Speaker of the House Paul Ryan has bragged that he has been thinking about cutting these programs since his frat days. He literally claimed that he was "dreaming" of ending Medicaid when he was "drinking at a keg," adding, "I've been thinking about this stuff for a long time."
Right-wingers have opposed Social Security and Medicare ever since they were first created.
Republican leaders are so eager to cut benefits that they seem incapable of hiding their plans to go after Social Security, Medicare and Medicaid. The latest person to let the veil slip is none other than powerful Senate Republican Leader Mitch McConnell (R-KY).
He just stated that spending on so-called "entitlement programs" must be "addressed." That is Washington insider code for ending Social Security, Medicare and Medicaid.
The shocking part of McConnell's statement, and those made by other powerful Republicans, is not the content, but the timing. Right-wingers have opposed Social Security and Medicare ever since they were first created. But because these programs enjoy overwhelming support from the American people, including voters of all political affiliations, they do not normally talk about their plans for benefit cuts three weeks before an election. If this is how they are talking now, imagine how emboldened they will be if they ride out the blue wave and keep control of Congress!
Since losing the Bush privatization fight, these Republicans have worked hard to avoid political accountability, through using fast-tracked, unaccountable supercommittees, commissions or other forms of bipartisan cover. But with Democrats now in favor of expanding not cutting these vital programs, Republican elites may see their latest chance slipping away. And they are determined not to let that happen. Like the proverbial child who murders his parents and then pleads for leniency because he is an orphan, today's Republicans are planning to use the cost of their tax giveaway to the wealthy as the excuse to do what they have wanted to do for so long.
Time and time again, McConnell has shown that the only thing he truly cares about is power. And he has been rewarded for his ruthlessness. He was able to steal a Supreme Court appointment in 2016. If Congress remains in Republican control, he will do anything he has to do to ensure that he destroys Social Security, Medicare and Medicaid. On November 7, 2018, he will be as far from the next election as you can get. And he and the other Republicans will have no guarantee that they will keep control of the White House and Congress after 2020.
Donald Trump understands the politics better than the rest of his cronies. In his typical effort to project his true views onto his political opponents, he signed an op-ed claiming that Democrats are the ones who want to destroy Medicare. He has also made the equally absurd claim that Democrats are out to destroy Social Security. (Thinking about this transparent projection brings to mind his retort, when Hillary Clinton accused him of being a Russian puppet: "No puppet; you're the puppet!")
Notwithstanding Trump's efforts, the other Republicans just cannot control themselves. By being undisciplined enough to announce, immediately before an election, their plans for Social Security, Medicare and Medicaid cuts, McConnell and the others have made the choice for voters crystal clear.
It is a cliche to say whatever election is coming up is the most important in our lifetimes. But this time, it is no hyperbole.
It is a cliche to say whatever election is coming up is the most important in our lifetimes. But this time, it is no hyperbole. There are many, many reasons to make sure you vote. A principal reason is to protect Social Security, Medicare and Medicaid.
If Democrats take back the House of Representatives, they can block McConnell's plans for cuts. If they take back the Senate, McConnell will lose his control--and Democrats can hold floor votes on expanding Social Security and Medicare, forcing every single senator and House member to go on the record for or against these programs.
Please understand that I am not a knee-jerk Democrat. In the 1970s, I worked for a Republican senator, and in the early 1980s, I was the top assistant to conservative economist Alan Greenspan in his position as chair of the bipartisan Social Security reform commission. Mainstream Republican presidents, from Dwight D. Eisenhower to George H.W. Bush, have supported Social Security, Medicare and Medicaid. But no more.
Right-wing extremists, who hate all government programs that improve people's lives, are currently in charge of the Republican Party. They are extreme in their views. They are extreme in their tactics. And they are extreme in their efforts to thwart our system of checks and balances.
So, I implore all supporters of Social Security, Medicare and Medicaid: Vote this November.
This article was produced by the Independent Media Institute.
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Trump's 4 Biggest Lies about Today's Economy
"Best wages, ever." Not even close.
Sep 11, 2018
Trump is putting out 4 big whoppers about today's economy. Here's what he's saying, and here's the truth:
1. "Best job growth ever." Wrong. Job growth has actually slowed. In the last 19 months of the Obama administration the economy created 3.96 million jobs. In the first 19 months of Trump's, 3.58 million.
2. "Lowest unemployment rate ever." Rubbish. The unemployment rate is now down to 3.9 percent. That's good. But it doesn't measure how many people are still too discouraged to look for work or are working part time who'd rather be working full time. The labor participation rate (percent of prime working age work who actually have jobs) has been stuck at 88.9 percent for over a year.
And the current 3.9 percent rate is hardly better than ever in history. It was 3.4 percent in 1968 under Johnson, and below 3.9 percent for much of 1951, 1952, and 1953, under Eisenhower.
The practical question is always how low the Fed will allow unemployment to fall before raising rates, for fear of inflation. In 1996, unemployment fell to 4.4 percent, but Fed Chair Alan Greenspan then raised rates. This time around, Fed Chair Janet Yellen and her successor Jerome Powell have been quite accommodating, but Powell is starting to raise rates again.
3. "Fastest economic growth in history." Wrong again. The economy is now growing at annualized rate of 4.2 percent (that's for the 2nd quarter). That's not as good as the 5.1 percent and 4.9 percent achieved in 2 quarters in 2014, or the 4.7 percent in one quarter in 2011. During the Clinton years of 1997-1999, it grew by over 4.5 percent annually. Under Reagan, the recovery averaged 4.4 percent a year. Under Eisenhower, even faster.
4. "Best wages, ever." Not even close. Today's hourly wage has less purchasing power than it did over four decades years ago. Adjusted for inflation, the average hourly wage in January 1973 would be $23.68 today. Yet today's actual average hourly wage is $22.73. And, of course, the lion's share is going to the top.
Trump is having only one positive impact on the economy: His continuous P.T. Barnum lies about how good it is have improved consumer confidence. Which I suppose is good - until, like the character in the road-runner cartoons, consumers look down and realize there's nothing under them.
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Hillary Clinton's New Book Attacks Bernie. But Why?
So much for sowing party unity in a time of deep peril
Sep 12, 2017
In her new book What Happened? Hillary Clinton goes after Bernie Sanders with a vengeance. She claims that:
- Bernie is a snake oil salesman who makes preposterous promises;
- That he is partly responsible for Trump's "Crooked Hillary" mantra; and
- That he is not a real Democrat and doesn't really care about the party's success.
So much for party unity in a time of peril.
Bernie, the Deranged Hitch-hiker, Promising Beautiful Abs?
Hillary ridicules Bernie for promising big, and in her opinion, unrealistic programs. To make her point she describes a scene from the movie, There's Something About Mary:
A deranged hitch-hiker comes up with a brilliant plan. Instead of the famous "8 minute abs"exercise routine, he's going to market "seven minute abs...." The driver played by Ben Stiller, says, "Why not six minute abs?" That's what it was like in policy debates with Bernie. We would propose a bold infrastructure plan or ambitious new apprentice program for young people and Bernie would announce basically the same thing but bigger. One issue after the other it was like he kept promising four minute abs, or even no minute abs. Magic abs.
So what did Bernie, the "deranged hitch-hiker" offer?
- While Hillary wanted to tinker with Obamacare and continue its dependence on the private insurance industry, Bernie called for single-payer Medicare for All which would eliminate insurance industry involvement.
- While Hillary wanted to tighten a few bank regulations, Bernie called for the breakup of big banks, something she claimed was unnecessary.
- While Hillary offered a complex scheme that would reduce the cost of higher education for some lower income students, Bernie called for free higher education for all.
This was not "the same thing but bigger." Rather, Sanders was, and still is, offering an entirely different vision for the relationship between financial elites and the American people. This is nothing new for Bernie, who for decades has been calling for social democratic policies much like those in northern Europe where higher education and health care are public goods, largely funded with hefty taxes on the wealthy.
In contrast, Hillary argued that for the most part the established order is working well for the American people. That's why she was totally unprepared when Bernie's perennial radical message hit home as most Americans became increasingly upset about Wall Street and runaway inequality. Hillary can't admit the obvious: She shifted her positions in Bernie's direction as her campaign saw how well those issues resonated in the primaries.
Bernie Created Crooked Hillary?
Because we agreed on so much, Bernie couldn't make an argument against me in this area on policy, so he had to resort to innuendo and impugning my character. Some of his supporters, the so called Bernie Bros, took to harassing my supporters on line. It got ugly and more than a little sexist. When I finally challenged Bernie during a debate to name a single time I changed a position because of a financial contribution, he couldn't come up with anything. Nevertheless his attacks caused lasting damage, making it harder to unify progressive in the general election and paving the way for Trump's 'Crooked Hillary' campaign.
This troubling passage should have been nixed by her editors. First it restates the delusional claim that Bernie could not make a substantive argument against her and therefore he had to resort to "innuendo and impugning" her character. Then, she impugns his character by implying that his campaign was somehow "more than a little sexist" because of what a very tiny fraction of his supporters said to her supporters. Then she purposely conflates her emails/server problem with her Wall Street problem. She seems to have conveniently forgotten that the "Lock her up" chant flowed from Trump's attack on her emails, not her Wall Street speeches.
As we all know, Sanders took the email issue off the primary table when in their first debate he famously said, "The American people are sick and tired of hearing about your damn emails!"
But taking $675,000 from Goldman Sachs for three speeches was indeed a major point of contention: "If Secretary Clinton gets paid $225,000 for each individual speech to Wall Street and Goldman Sachs, then those must be some great speeches! And if they're so great, then she really ought to let us see them," Sanders said repeatedly.
Written Like a True Wall Street Democrat
The paid speeches issue is not about "Crooked Hillary." Rather it's about the soul of the Democratic Party. It sets up a gigantic litmus test that divides the party into two kinds of people -- those who think it's OK to pocket hundreds of thousands of dollars from Wall Street, and those who think that's a very bad idea. Actually the divide is even more fundamental: It's between those who believe that runaway inequality is not that much of a problem and those who see it as a core issue of what ails our society.
Hillary just can't believe that anyone could possibly think that taking that money from Wall Street would change her positions. She is absolutely correct because she already agrees with the fundamental premises that allow Wall Street to flourish at our expense. The Clintons deregulated Wall Street with great passion. They saw nothing wrong with helping big banks, hedge funds and private equity companies grow even bigger and more reckless. Instead they viewed Wall Street as a major engine of prosperity for America. Even the great crash of 2007-08 didn't really change their perceptions.
Furthermore, Hillary and Bill see nothing wrong at all with making lots of money as quickly as possible. Their fortunes increased by more than $100 million since Bill left office. And Hillary raked in more than $9 million in speeches since she left the Obama administration.
Hillary gladly accepted $225,000 a speech from Wall Street -- nearly five times what the average worker makes in a year -- because she believed it was her due. She and Bill went to law school with many who are now financial elites. They are socially entwined. It just never dawned on Hillary that it might be bad optics to take all that money from Wall Street after its billionaires crashed our economy.
She is not alone. The Democratic Party is loaded with players whose primary goal in life is to do well by doing good. Yes, they have sympathy with progressive causes, but they care as much if not more about getting richer and richer.
Bernie and his supporters are far more suspicious of wealth accumulators and their enablers. They see our government as catering to the rich and contributing mightily to runaway inequality. This isn't just a little problem that can be wished away by removing barriers to upward mobility, reducing student loan rates and instituting profitable public/private partnerships in poor communities. Runaway inequality is a core problem that is totally entwined with racial justice and rural/urban poverty. It must be reversed through programs that halt the financial strip-mining of our economy by moving money from Wall Street to Main Street like financial transaction taxes, ending the carried interest loophole, instituting public banks and a wide array of anti-Wall Street policies that corporate Democrats detest.
Instead, Hillary and the Democrats are conveniently convinced that you must take Wall Street money in order to compete. Here's her justification: "There's always a danger of spending too much time courting donors because of our insane campaign finance system." She makes no mention that even within that "insane" system, Bernie out-raised her with millions of donations averaging $27.
Bernie is a Socialist, not a Democrat!
Hillary is quite aware of the fundamental divide between Bernie's attack on runaway inequality and the party's elite entanglements. She knows that he and his minions do not want a party that is a stepping stone for wealth enhancement for the few. That may be why she seems more than ready to expel them from the Democratic Party:
"But he isn't a Democrat -- that's not a smear. That's what he says. He didn't get into the race to make sure a Democrat wins the White House, he got in to disrupt the Democratic Party."
Hillary is absolutely correct. The goal of progressives should be to disrupt the Democratic Party. We need a party that can fight against runaway inequality rather than enhance and profit from it. We need to a party free from enabling financial and corporate elites. We need a party that relies solely on contributions from the many and not the wealthy few. Unless that happens soon, the Democrats will continue to fail.
Why Attack the Berniecrats now?
Obviously Hillary is not interested in playing patty-cake for the sake of party unity in the Age of Trump. Screw that. She has accounts to settle.
Surely she and her confidents knew that these passages would anger Bernie's followers. It would make us even less likely to want anything to do with a political party controlled by her wing. And that I believe is her point. She wants to purge the trouble-makers. She longs for the days when she and Bill could dine with Alan Greenspan and the super rich, and no one noticed or cared. But the financial crash, Occupy Wall Street, Elizabeth Warren and then Bernie and his passionate followers put enormous pressure on the cozy relations between Democratic officials and financial elites.
As Hillary makes clear, it is much easier to attack the radical reformers than to institute radical reforms.
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Dear President Trump: Breaking Up (Banks) Isn't So Hard to Do
What's your pleasure: A new Glass-Steagall or another economic meltdown?
Jun 08, 2017
Donald, listen, whatever you've done so far, whatever you've messed up, there's one thing you could do that would make up for a lot. It would be huge! Terrific! It could change our world for the better in a big-league way! It could save us all from economic disaster! And it isn't even hard to grasp or complicated to do. It's simple, in fact. Reinstitute the Glass-Steagall Act. Let me explain.
In the world of romance, if you break up with someone, it's pretty simple (emotional complications aside). You're just not together anymore. In the world of financial regulation, it used to be as simple as that, too. It was like installing a traffic light at a dangerous intersection to avoid deaths. In 1933, when the Glass-Steagall Act was passed, it helped break up the biggest banks of the day and for good reason: they had had a major hand in triggering the most disastrous economic depression our country ever experienced.
Certain divisions of those banks were no longer allowed to coexist with others. The law split the parts of banks that placed bets by creating and trading certain risky securities and those that took deposits and provided loans. In other words, it ensured that the investment bank and the commercial bank would no longer cohabit. Put another way, it separated bankers with a heinous gambling habit from those who only wanted a secure nest egg. It was simplicity itself.
After 1933, the gamblers and savers went their separate ways, which proved a boon for the economy and the financial system for nearly seven decades. Then legislators, lobbyists, bankers, and regulators started to chisel away at the wall separating those two kinds of banks. By November 1999, President Bill Clinton signed into law the Gramm-Leach-Bliley Act that repealed the Glass-Steagall Act totally. The abusive marriages of gamblers and savers could once again be consummated.
And who doesn't remember the result: the financial crisis of 2007-2008 that led to taxpayer-funded bailouts, subsidies, loans, and sweetheart fraud-settlement deals. Just as the Crash of 1929 had been catalyzed by the manufacturing of shady "trusts" stuffed with shady securities, this crisis was enabled by the big banks that engineered complex assets stuffed with subprime mortgages and other loans that were sold around the world.
Under President Obama, the 2010 Dodd-Frank Act was signed into law. The Act sought to limit the ability of big banks to trade the riskiest types of securities. Through inclusion of something called the "Volcker Rule," Dodd-Frank prohibited the trading of securities (even if with many loopholes). What it didn't do was actually break up the big banks again. That meant another 1933 still awaited its moment.
Then along came the bizarre 2016 presidential election campaign during which, strangely enough, Democrats and Republicans found one issue on which they had some common ground: the banking system. Key figures in both parties agreed that it was time to stop the investment bank and the commercial bank from commingling. Bernie Sanders ran on a campaign to break up the banks -- and so did Donald Trump. At at an October campaign rally in Charlotte, North Carolina, Trump even stated, "It's time for a twenty-first-century Glass-Steagall."
The Democratic National Committee platform offered a similar message. "Banks," it said, "should not be able to gamble with taxpayers' deposits or pose an undue risk to Main Street. Democrats support a variety of ways to stop this from happening, including an updated and modernized version of Glass-Steagall as well as breaking up too-big-to-fail financial institutions that pose a systemic risk to the stability of our economy."
The Republican National Committee wasted even fewer words making the point in their platform: "We support reinstating the Glass-Steagall Act of 1933 which prohibits commercial banks from engaging in high-risk investment." And it didn't even suggest that the act should be "modernized" or mention a "twenty-first-century" version that didn't do what the twentieth century one had done.
For the first time since its repeal, in other words, a return to the Glass-Steagall Act had bipartisan support. It couldn't have been simpler, right? Two parties, one idea: split banks into two pieces. But then, as if you hadn't already guessed, it got complicated.
Breaking-up, Republican-Style
In the new administration, two key figures are now offering quite different and conflicting views of what a resurrection of the Glass-Steagall Act might mean. At his Senate confirmation hearings, Steven Mnuchin, former Goldman Sachs partner and Trump's nominee to be secretary of the Treasury, faced Senator Maria Cantwell (D-Wash.) as she bluntly asked "Do you support returning to Glass-Steagall?"
He replied, "I don't support going back to Glass-Steagall as is. What we've talked about with the president-elect is perhaps we need a twenty-first-century Glass-Steagall. But, no, I don't support... taking a very old law and say we should adhere to it as is."
Cantwell then pressed him further: "And so, is that the position of what the Republican platform was? Because I thought it was Glass-Steagall?"
To this, Mnuchin responded, "Again, the Republican platform did pass at the convention Glass-Steagall and... [when] we talked about policy with the president-elect, our view is we need a twenty-first-century Glass-Steagall."
The skepticism in the room was thick enough to cut with a knife. Here, after all, was a man who had made windfall profits on the fallout from the 2007-2008 "too big to fail" financial crisis by organizing a cadre of hedge-fund billionaires to buy the collapsed IndyMac Bank at a discount. He then proceeded to foreclose on some of its mortgages and resellit for a $2.5 billion profit. Why should such a man want to restrict banking activity, Glass-Steagall-style, when his loan practices had allowed him to make a fortune off the taxpayer bailouts that were the result of not doing so? What would the point be when a crisis, as history had just shown, forced the federal government to subsidize risk and failure?
The only problem he faced: the Republican platform said he should.
Last month, testifying before the Senate Banking Committee and under questioning from Senator Elizabeth Warren, he backtracked even further: "The president said we do support a 'twenty-first-century Glass-Steagall,' that means there are aspects of it that we think may make sense. But we never said before we support a full separation of banks and investment banking."
Warren responded incredulously, "Tell me what twenty-first-century Glass-Steagall means if it doesn't mean breaking up those two parts. It's an easy question."
Mnuchin replied, "It's actually a complicated question... We never said we were in favor of Glass-Steagall. We said we were in favor of a twenty-first-century Glass-Steagall. It couldn't be clearer." Which, of course, couldn't have been murkier.
And then there's that other former Goldman Sachs man, Gary Cohn, Trump's director of the National Economic Council. He had quite a different Glass-Steagall tale to tell Senator Warren. According to Bloomberg News, he insisted that he "generally favors banking going back to how it was when firms like Goldman focused on trading and underwriting securities, and companies such as Citigroup Inc. primarily issued loans." That sounds a lot like breaking up the banks.
This division and the as-yet unresolved nature of the Trump administration response to the Glass-Steagall question could, in the face of another financial crisis, come back to haunt us all, if it translates into more bailouts and systemic failures.
The Democrats' Dilemma
As with the proverbial difficulty of chewing gum and walking at the same time, certain Democrats seem to find the very idea of supporting both Dodd-Frank and a new Glass-Steagall Act perplexing. Many of them have promoted the idea that no big bank actually failed in the Great Recession moment (which was true only because those banks got huge infusions of federal aid to remain solvent). As a result, they avoided all responsibility for the way the repeal of Glass-Steagall allowed too-big-to-fail banks to come into existence in the first place.
In the process, they also conveniently ignored the way the big banks lent money to, or funded, the investment banks that did fail like both of my former employers, Bear Stearns and Lehman Brothers. Without those loans or that funding, those outfits couldn't have purchased the overload of toxic assets that, in the end, imploded the whole system.
President Obama summed up this position when he told Rolling Stone in 2012, "I've looked at some of Rolling Stone's articles that say, 'This didn't go far enough, we didn't institute Glass-Steagall' and so forth, and I pushed my economic team very hard on some of those questions. But there is not evidence that having Glass-Steagall in place would somehow change the dynamic. Lehman Brothers wasn't a commercial bank; it was an investment bank. AIG wasn't an FDIC-insured bank; it was an insurance institution. So the problem in today's financial sector can't be solved simply by re-imposing models that were created in the 1930s." He needed a more astute team.
Hillary Clinton took a similar tack in her campaign and it may have contributed to her devastating election loss. The continued promotion of such fallacies does not bode well for the future of the party if it continues to adopt that view. A return to a safer system on the other hand, would be more populist -- and far more popular.
Glass-Steagall's Bipartisan Past
Fortunately, current legislation is circulating in Congress that would promote the long-term stability of the financial system by restoring Glass-Steagall for real. H.R. 790 ("Return to the Prudent Banking Act of 2017") is one of two reinstatement bills in the House of Representatives. It has 50 co-sponsors from both parties and its passage is being spearheaded by Marcy Kaptur (D-Ohio) and Walter Jones (R-N.C.). The second bill, H.R. 2585, sponsored by Mike Capuano (D-Mass.), bears a close relationship to Senate bill S.881 (the "Twenty-First-Century Glass-Steagall Act of 2017"), sponsored by Elizabeth Warren (D-Mass.) and nine cosponsors including John McCain (R-Ariz.), Maria Cantwell, and Angus King (I-Maine). Either of the bills, if enacted, would do the same thing: break up the banks.
In order to understand just why passage is so crucial, a little history is in order. Glass-Steagall, or the Banking Act of 1933, was signed into law by President Franklin Roosevelt. It represented a bipartisan effort and was even -- perhaps not surprisingly given the devastating nature of the collapse of 1929 and the Great Depression that followed -- actively promoted by some of Wall Street's most powerful bankers. In its 66 years as law, it effectively prevented systemic banking and economic collapse.
Even before Roosevelt began his first term, congressional Republicans had initiated an investigation into bankers' practices. In early 1933, as Roosevelt was preparing to take office with an incoming Democratic Senate, outgoing Senate Banking and Currency Committee chairman Peter Norbeck, a Republican from South Dakota, hired former New York Deputy District Attorney Ferdinand Pecora to lead the Senate Banking Committee in a new investigation.
Later known as the Pecora hearings, they would shed light on the kinds of financial manipulations by unscrupulous bankers that had led to the crash of 1929. They would also provide the new president with the necessary populist political capital to enact America's most sweeping financial reforms. No less crucial was the way banking leaders aligned themselves with Roosevelt's new program. Duty to country over balance sheets seemed then to be the order of the day, even on Wall Street. (It's not an attitude that lasted into the twenty-first century.)
Two days after his inauguration, for instance, Roosevelt invited incoming National City Bank Chairman James Perkins to the White House for a secret meeting. The next day, under Perkins' direction, his bank board passed a resolution splitting apart its trading and deposit-taking divisions. Chase National Bank chairman Winthrop Aldrich, a major financial power player, lent a hand as well. Both Perkins and he would back the new Glass-Steagall bill. (Lest you think that all was sweetness and light, they were also convinced that it would diminish the strength of their main competitor, the Morgan Bank.)
Three days after Roosevelt called Perkins to the White House, Aldrich's views on breaking up the banks hit the front page of the New York Times when he announced that Chase National Bank and Chase Securities Corporation would become separate entities, effectively enforcing the bill before it even became law. It wasn't simple -- the Chase Securities Corporation was the biggest of its kind in the world -- but it happened.
Aldrich then took part in a series of private meetings with the president at the White House about the pending legislation. Without the support of Aldrich and Perkins, it's possible that the bill wouldn't have passed. After all, a far weaker version proposed during the previous administration of Herbert Hoover hadn't.
The Glass-Steagall Act also created the Federal Deposit Insurance Corporation to insure citizens' bank deposits. This left commercial banks with a choice to make. If they took deposits and made loans, they could not speculate with depositors' money. If they wanted to create and speculate, they were on their own. There's much to be said for protecting hard-working Americans in this fashion.
How the Walls Came Tumbling Down
In the 1980s, the walls between investment and commercial banking first began to crumble. The deregulation of the financial sector that followed would prove to be as bipartisan as the passage of Glass-Steagall had been. In 1982, as the Republican presidency of Ronald Reagan began, Congress passed the Garn-St. Germain Act, deregulating the kinds of investments that savings and loan banks could make to include riskier real estate loans. This had the effect of exacerbating the savings and loan debacle, which hit its pinnacle in the late 1980s. By 1989, more than 1,000 S&L banks in the U.S. would crash and burn. In total, the crisis wound up costing about $160 billion, $132 billion of which was footed by taxpayers. And the suppliers of risky S&L securities tended to be the big banks.
In 1987, still in the age of Reagan, Federal Reserve Chairman Alan Greenspan, a past board member of JPMorgan, said that non-bank subsidiaries of bank holding companies could sell or hold "bank ineligible securities" -- that is, securities prohibited by Glass-Steagall, including mortgage securities, asset-backed securities, junk bonds, and other derivative products. The move exacerbated the S&L crisis, but it also offered an avenue for commercial banks to stock up on some of the securities at the heart of that crisis.
And so commercial banks began investing in hedge funds, whose very purpose in life is to gamble on securities, stocks, and commodities. In 1998, in an early warning of what the future might hold, one of them, Long Term Capital Management, crashed and nearly brought down the whole financial system with it. Fifty-five commercial banks had invested in it using depositors' money to back their bets. Only an emergency meeting of the presidents of the major banks at the Federal Reserve averted a larger economic meltdown, but because Glass-Steagall was still in place, they had to figure out how to save themselves. No government bailouts were forthcoming.
Having narrowly avoided disaster, Wall Street only plunged deeper into financial deregulation. In 1999, Glass-Steagall itself was repealed. On December 21, 2000, Congress passed the Commodity Futures Modernization Act deregulating derivatives trading. The big commercial banks then merged with investment banks, insurance companies, and brokerage firms. By 2007, the assets of those big banks had tripled. The four largest -- Bank of America, JPMorgan Chase, Citigroup, and Wells Fargo -- by then controlled (and still control) more than half the assets of the banking system.
In the fall of 2007, that system finally started buckling because of the problems of Citigroup, not because of the investment banks, which would not have been covered by Glass-Steagall. The catastrophe that hit Citigroup makes it clear just how crucial the repeal of that act was to the financial meltdown to come. Citigroup would "require" a taxpayer-financed bailout of $45 billion, $340 billion in asset guarantees, and $2 trillion in near-0% Federal Reserve loans between the fall of 2007 and 2010. That in itself was staggering and Citigroup wasn't alone. Federal Reserve Chairman Ben Bernanke would later testify that, by 2008, 11 out of the 12 biggest commercial banks were "insolvent" and had to be bailed out. The entire banking system was rotten to the core and the massive buildup of bad paper, high leverage, and speculative bets (derivatives) that made disaster inevitable can be traced directly back to the repeal of Glass-Steagall.
Today, a fresh bubble is inflating. This time, it's not U.S. subprime mortgages at the heart of a budding banking crisis, but $51 trillion in corporate debt in the form of bonds, loans, and related derivatives. The credit ratings agency S&P Global Ratings has predicted that such debt could rise to $75 trillion by 2020 and the defaults on it are starting to increase in pace. Banks have profited by the short-term creation and trading of this corporate debt, propagating even greater risk.Should that bubble burst, it could make the subprime mortgage bubble of 2007 look like a relatively small-scale event.
What Will the President Do?
On the positive side, there's a growing bipartisan alliance in Congress and outside it on restoring Glass-Steagall. This increasingly wide-ranging consensus reaches from the AFL-CIO to the libertarian Mises Institute, in the Senate from John McCain to Elizabeth Warren and Maria Cantwell, and in the House of Representatives from Republicans Walter Jones and Mike Coffman to Democrats Marcy Kaptur, Bernie Sanders, and Tulsi Gabbard. In fact, just this week, Kaptur and Jones announced an amendment to the pending Financial Choice Act in the House of Representives, that would represent the first genuine attempt to bring to a vote the possibility of resurrecting the Glass-Steagall Act since its repeal.
So, Donald, here's the question: Where do you -- the man who, in the course of a few weeks, embracedMiddle Eastern autocrats, turned relations with key NATO allies upside down, and to the astonishment of much of the world, withdrew the U.S. from the Paris climate agreement -- stand? In just a few months in office, you've turned the White House into an outpost for your family business, but when it comes to the financial well-being of the rest of us, what will you do? Will you, in fact, protect us from another future meltdown of the financial system? It wouldn't be that hard and you were clear enough on this issue in your election campaign, but does that even matter to you today? I noticed that recently, in an Oval Office interview with Bloomberg News, when asked about breaking up the banks, you said, "I'm looking at that right now. There's some people that want to go back to the old system, right? So we're going to look at that."
Your party and your own appointees are split on the subject. Where will you fall? You could still commit yourself to securing the financial well-being of our nation for generations to come. You could commit yourself to Glass-Steagall. The question is: Will you?
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Obama Under Fire for $400K Speech to Wall Street 'Fat Cats'
Former President Barack Obama's first speech since leaving office will be a richly-compensated appearance at Wall Street firm Cantor Fitzgerald
Apr 26, 2017
Former President Barack Obama is garnering criticism for netting a whopping $400,000 for his first major speech since leaving office--a speech to Wall Street firm Cantor Fitzgerald, scheduled to take place in September.
Progressives were deeply disappointed by Obama's approach to Wall Street during his presidency, and many are condemning his lucrative Wall Street speaking fee as an apparent retroactive reward for his administration's soft stance toward the one percent.
While Obama railed against "fat cat bankers" on the campaign trail, during his tenure as president he oversaw the massive bailout for the firms responsible for the 2008 crisis, picked former Wall Street executives for his cabinet, and not a single banker went to jail.
As Aaron Blake writes in the Washington Post, there are many problems with the arrangement:
George W. Bush and Bill Clinton did this, too, as have Hillary Clinton, Ben Bernanke and Alan Greenspan. And the more that Wall Street firms give out-of-office presidents and big-name politicians these paydays, the more they become the norm. Other presidents will know that such payments are on the table, and it risks coloring their decisions with regard to Wall Street and special interests.
Which is already happening with Obama, retroactively.
"Whether fair or not, it's not difficult to look at Wall Street paying $400,000 to Obama as a reward for [the lack of prosecutions for anybody involved in the financial crisis]. In that way, it's tough on both precedent and Obama's presidency," Blake observes.
Blake and others also point out that Obama himself criticized such arrangements in his 2006 book The Audacity of Hope:
Moreover, observers note that at a time when Democrats are framing President Donald Trump as an enemy of working people, it seems as though the party wouldn't want the former Democratic president to receive such stunning speaking fees from Wall Street. Indeed, right-wing outlet Fox News appeared to jump at the chance to describe the fee as a "huge payday" for Obama.
Many journalists and commentators also took to Twitter to condemn the speech:
oh just because Obama let Wall Street guys get away with the biggest fraud in history, he shouldn't take $400,000 to give a speech to them?
-- sick transit, gloria (@samknight1) April 26, 2017
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No Honeymoon for Hillary
If Clinton wins, she’ll inherit massive public anger unless she fights for progressive changes on trade and industrial policy.
Nov 08, 2016
ere's a question to ponder during the final crazy moments of the 2016 election. Who will own the working-class anger once Donald Trump has been dumped by the voters? If Hillary Clinton wins the election, the Democratic Party will have the chance to reclaim its ruptured relationship with working people--the wounded victims who lost their livelihoods to brute-force globalization.
With Trump out of the way, Democrats could reclaim their old franchise by proposing an aggressive agenda for reforming US industrial strategy--restoring the economy's balance and equity that Bill Clinton's New Democrats effectively dismantled a generation ago under the banner of "free trade." Trump's fed-up rebellion was driven by many things, but especially by the gutting of US manufacturing.
Michelle Obama has given us a bright slogan for reform: "When they go low, we go high." Instead of Trump's cheap-shot bigotry and vile resentments, Democrats need to envision a generational shift of positive purpose. Not to withdraw from global trade--of course not--but to adopt substantive reforms that redefine America's own national priorities and terms of trade so that globalization can actually benefit all sectors of our society, not just the greedy One Percenters.
We know this is possible in globalization because our rivals in trade manage to sustain broadly shared prosperity for their societies by designing their own self-interested industrial strategies. They do not ask themselves what will be good for the global trading system. They ask if it will be good for Germany or Japan, Sweden or China. Donald Trump's ad-lib slogan--"America First"--was widely ridiculed by establishment cheerleaders in the United States. But "Germany first" or "Japan first" (not to mention Sweden and China first) are implicit strategies of the most successful exporting nations.
Only in America do the policy-makers claim to be above such crass nationalism. They want the United States to be seen as the high-minded "indispensable nation" leading the world to higher ground. Foreign rivals privately scoff at US pretensions, but they also know how to manipulate American hubris at the negotiating table.
Washington policy-makers essentially identify the US national interest in terms of American owners, not workers.
The US approach to trade policy involves a crucial difference. Washington policy-makers essentially identify the US national interest in terms of American owners, not workers. That is, the policy objective reflects the interests of the investors and shareholders who own the multinational enterprises and far-flung capital investments. Elsewhere in the world, a German or Japanese economist--and probably most politicians--would say it is the interests of the workforce that determine the national interest.
In other words, the US government's industrial policy focuses first on serving capital, with an unspoken assumption that labor and society will benefit too if US multinationals succeed. Thus, US industrial strategy has willingly sacrificed the wage incomes of American workers to boost the profits of US multinationals by encouraging the offshoring of American jobs.
This policy preference is embedded in trade deals, the tax code, and the permissive rules of corporate governance, in which CEOs are personally enriched for concentrating primarily on "shareholder value." That narrow-minded standard has spawned a generation of fraudulent returns, but it also warps the economy.
The distinctive US industrial strategy helps explains why globalization destabilized the American middle class.
The distinctive US industrial strategy helps explains why globalization destabilized the American middle class while rival trading nations prospered by promoting social solidarity--defending workers and shielding vulnerable sectors from globalization's stormy pressures.
In Germany, for example, during the financial crash of 2008, the German labor federation made a deal with major manufacturers. Instead of massive layoffs, the companies agreed to keep workers on the payroll rather than dismantle its experienced workforce. As sociologist (and longtime Nation contributor and editorial board member) Norman Birnbaum explained, "Germans shared the political view that what made Germany strong was its educated, highly skilled working class." The German chancellor oversees such industrial relationships and can pressure wayward companies attempting to go against the national consensus. German employees--both white-collar and blue-collar--have a formal voice in kibitzing management decisions.
In contrast, America's high-tech companies in Silicon Valley have routinely offloaded millions of jobs to Taiwan or China when new product lines are ready to be upscaled for mass production. The investors demand it. Shifting the production to low wages in Asia boosts their returns on capital. The federal government gives its blessing and facilitates the job shift with its permissive trade agreements.
The late Andrew Grove, the legendary inventor and co-founder of Intel, reported for Bloomberg back in 2010 that Apple had 25,000 jobs in the United States and 250,000 in South China. Grove, who died last March, complained repeatedly that US industrial strategy was destroying America's own manufacturing prowess. The multinationals reaped bigger profits, but China and Taiwan gained the engineering experience and infrastructure to dominate the future. With corporate tax cuts and generous subsidies, Washington was unwittingly financing the American decline.
Grove proposed a "jobs-centric economic theory" to stop the bleeding and launch the American restoration. He suggested an extra tax could be levied on multinationals for their products made by offshore labor but sold to US consumers. The revenue would finance a general fund to assist companies that intend to scale up their new production in America instead of shipping jobs and technological skills to foreign countries.
CEOs and corporate directors whose companies are shrinking the US industrial base would be reminded that their personal rewards depended upon the industrial strength of the home country, which they have been systematically dismantling. "If what I'm suggesting sounds protectionist, so be it," Grove wrote. "If the result is a trade war, treat it like other wars--fight to win."
It sounded like Donald Trump might have been channeling Andy Grove.
After millions or billions of words, we still don't know what Clinton really thinks about globalization.
* * *
Many House and Senate Democrats might want to push fundamental trade reforms, but they have a problem. Her name is Hillary Rodham Clinton. Their newly chosen party leader is by nature a cautious and defensive politician, and she finessed the subject of trade reform during the long presidential campaign. While Trump pounded "stupid trade deals," HRC concentrated on worthy social and economic reforms. After millions or billions of words, we still don't know what she really thinks about globalization.
Yet Clinton will inherit the public anger if she has nothing substantive to say about big change. The party's progressive ranks will probably form a loose caucus of the usual suspects to give her a push, and they won't wait patiently to do so. No time for happy talk and no honeymoon for Hillary. If Clinton assumes the anger has faded and she can ignore it, she will be preparing for a one-term presidency.
While Trump led to the GOP crackup, a Clinton II presidency might generate a parallel clash among Democrats. In olden days, the Democratic Party would have naturally stood up for the working class and organized labor. But the New Democrats of the Clinton-Obama era backed away from both. New Dems are more comfortably aligned with business and banking elites, as well as professionals with progressive social values.
The first decisive test for Clinton will arrive even before she can take the office. President Obama and the business lobby are planning to push through the Trans-Pacific Partnership deal in the lame-duck session of Congress right after the election. HRC says she is opposed, but the White House has wired the deal with the GOP. If they prevail, it will instantly ruin the legitimacy of Clinton's presidency. If she claims she is opposed, who will believe her? The arrogant corporate establishment would be rigging government in the face of public anger, abetted by the lame-duck Democratic administration.
Political reporters in 2016 narrowly portrayed Trump's angry voters as only aging white guys who lost their factory jobs. But the victims of depressed incomes and lost prospects are a far more diverse assemblage of wounded Americans. They share the same hurt and insecurities across their differences of race, religion, ad ethnic loyalties.
Rump-group rebel Democrats in the Senate are in the minority, but they will have the voters on their side.
The ranks of the discontented include millions of Democratic voters--working-class African Americans and Latinos, young people struggling to get started, women seeking equity and power, old liberals and young Bernie supporters. The Democratic Party could build a stable governing majority if it could figure out how to reunite all these disparate people with the white guys who share the same economic grievances.
The rump-group rebels--people like Senators Elizabeth Warren, Bernie Sanders, Jeff Merkley, and Sherrod Brown--are definitely in the minority, but they will have the voters overwhelmingly on their side. And that potentially includes lots of Trump voters, too.
In theses troubled times, the old politics of class solidarity can become the new politics of fundamental reform. Democrats must learn again how to listen to these neglected citizens--really listen--in order to create an economic agenda that speaks concretely to what people want and need. In practical terms, this means reinventing an old-fashioned political party that gains its power from organized people instead of organized money.
* * *
Oddly enough, the next great trade debate has already started in Washington circles. In recent weeks, various establishment voices have been churning out their views in blogs and op-ed columns in leading newspapers. Their new theme is sympathy for the losers. But their real objective is to define the limits of acceptable thinking in the coming political debate. None of them accept blame for the wreckage their globalization doctrine caused Americans, much less offer apologies to the victims.
The wise men of Wall Street and Washington are clearly nervous, however, about the rebellious direction of 2016 politics. In The Washington Post, financier Robert Rubin, architect of Clintonomics, offered a grab bag of business-school cliches he titled "Inclusive Growth." "Develop innovative measures to address ongoing wage and job pressure," Rubin suggested. "Restore a sense of common purpose." Nice words that don't say anything. My translation: "Please don't shoot us bankers."
Leaders of the Brookings Institution and American Enterprise Institute--two corporate fronts that pose as academic think tanks--offered similar bromides and sounded more anxious. Despite the sweet talk, their corporate agenda hasn't really changed. It still includes cutting corporate taxes, subjecting regulation to rigorous cost-benefit calculations, shrinking Social Security and other federal programs that common folks value greatly.
But I encountered a shocking deviation from a most unlikely source--Lawrence Summers. He was Rubin's sidekick in the Clinton administration and succeeded him as Bill Clinton's Treasury Secretary. Time magazine famously dubbed Rubin and Summers and Fed chairman Alan Greenspan as the "Committee to Save the World." A few years later, their world famously crashed in the Great Recession.
Now Larry Summers sounds like a heretic. In a July column in The Washington Post, Summers abandoned the elite faith in globalization and urged instead a new doctrine he calls "responsible nationalism." With both NAFTA and China's admission to the World Trade Organization, he acknowledged "the most extravagant predicted benefits have not materialized."
The popular rebellion of 2016, he said, indicates "the willingness of publics to be intimidated by experts into supporting cosmopolitan outcomes appears, for the moment, to have been exhausted." The former Harvard president suddenly sounds vaguely populist. Summers proposed a commonsense way to think about reforming the US trading system:
A new approach has to begin from the idea that the basic responsibility of government is to maximize the welfare of citizens, not to pursue some abstract concept of the global good.... It may be inevitable that impersonal forces of technology and changing global economic circumstances have profound effects. But it adds insult to injury when governments reach agreements that further cede control to international tribunals of one sort or another. This is especially the case when, for legal reasons or reasons of practicality, corporations have disproportionate influence in shaping global agreements.
Read his words again and you can glimpse a rough blueprint for reforming the US approach to globalization. Summers, in fact, is reversing the harsh top-down priorities he and other Clintonistas enforced when they were in power. He is now putting people first in the national interest and subordinating corporate power.
Summers doesn't have answers for every disorder he cites. But he does ask some stinging questions. Why should the global system prevent sovereign nations from limiting inflows of foreign capital in their economies? Why should a country be prohibited from shielding its citizens from GMO crops? Why do corporations have the right to their own private legal system, the "investor state," where they can sue a nation for damages if it enacts environmental regulations that threaten corporate profits? NAFTA created this bizarre arrangement and the TPP proposes to expand it (see my Nation article from 2003, "Rolling Back the 20th Century").
Summers has evidently switched sides. When he was in power with Clinton and Obama, he was a ruthless advocate of corporate privilege and bankers first. Summers now insists that new trade agreements must be different: "judged not by how much is harmonized or by how many barriers to global commerce are torn down but by whether people as workers, consumers and voters are empowered."
Summers almost sounds like a Bernie Sanders revolutionary. But can we trust him? Alas, no. I once wrote a Nation blog about Summers titled "Professor Pants on Fire." A friend of mine suggests he is slyly lobbying again to become Federal Reserve chair, the post Summers was denied when left-liberal progressives (myself included) stormed against his appointment and Janet Yellen got the job. He may once again be playing a double game, hopeful no one will catch up with his contradictions. Unfortunately for him, there is WikiLeaks. Earlier this year, the professor urged the Clinton campaign not to indulge in "bank bashing." John Podesta, Clinton's campaign chairman, dismissed his message as "the worst advice ever."
Nevertheless, I suggest that reform activists can test his sincerity. Invite Summers to join their fight for reform and advise them on strategy. He is a brainy guy. He could become a sophisticated ally in the fight ahead. If he turns out to be a fake, take charge of his sound ideas and dump him hard.
Meanwhile, there is another important document people can consult to get a stronger understanding of the battlefield for reforming the trading system. It's called "The New Rules of the Road: A Progressive Approach to Globalization." The co-authors are two heavyweight intellectuals--Lori Wallach and Jared Bernstein--and longstanding critics of corporate-led globalization. They believe the system has reached a tipping point in both small-democratic rebellion and economic distress.
"The current 'trade' agreement process," Wallach and Bernstein write, "has been co-opted by corporate interests whose goal is to establish binding, enforceable global rules that protect their investments and profits. The corporate capture comes at the expense of both peoples' rights to democratically govern their own affairs and the ability of sovereign governments to effectively enforce worker, consumer and environmental safeguards."
Their prose is clear and uncompromising. They recite the new rules that the country must embrace if it is to get back on track and rebalance society. The process is necessarily long term. It took a generation to disassemble things.
But this document is an epochal rebuke to the governing elites that have owned both political parties for the last generation. The Wallach and Bernstein text is not just another trade debate; they have raised the political stakes in honest language and shocking detail. They accuse the globalists of stealing self-government from the American people.
Once this assertion is on the table in plain English, it becomes a stark challenge to citizens, not just their elected representatives. Will citizens rise to the crisis of democracy and fight back? Or will they shrug off their embarrassment and settle for the status of weaklings?
I am an optimist about America for the long run, because I know the American story well enough to know about the long delays and detours that frustrated the yearnings for justice or simple fairness. There are lots of cruel chapters when people did not redeem their principles. At the risk of sounding melodramatic, I sense that we are again at one of those testing moments.
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