Understanding the People Who Bought Our Political Process

I've been having a bit of a year in the wilderness. After almost 15 years in the political arena, I stopped doing partisan political work this year. No more for me. 

Simply put, I've come to believe the game is rigged and there is nothing I can do as an operative inside the system to improve things.

This post by Ian Welsh about the possibility of Social Security "reform" in the face of huge public opposition set me off this morning:

Public opinion is not relevant to the overall direction of what Village elites do.  It DOES NOT MATTER.  Calls about the bailout ran 100:1 to 1200:1 against, they passed it anyway.  Village elites are generally unified in their preferences for policy, and when they are, all you’re arguing is fairly trivial details, not the essence of the policy.  The question about SS in the Villagers minds is not whether it should be cut, but how.

But when I was discussion Welsh's piece with a former colleague this morning, I realized that things that seem obvious if you paid close attention to the financial collapse of 2008 and its aftermath you may still be clinging to some misguided beliefs about the nature of our current polity.

With that in mind I wanted to strongly recommend two books that did a great deal to wake me up to our current reality. First, Confidence Game: How a Hedge Fund Manager Called Wall Street's Bluff by Christine S. Richard. 

Confidence Game is one of those real-life nightmare books you just can't put down. It tells the story of hedge-fund manager Bill Ackman's six year battle to warn everyone that the financial boom of the George Bush era was a house of cards. 

From the press release for the book:

In 2002, the hedge fund manager issued a critical research report on MBIA Inc., the owner of a triple-A-rated bond insurer that played a central role in the financial alchemy on Wall Street. “This company will spiral downward,” Ackman warned, and he placed a bet against MBIA that would earn his investors billions of dollars if it did.

The backlash was swift. Ackman was branded a fraud in the press and investigated by Eliot Spitzer and the SEC. Despite the scrutiny, he spent years telling anyone who would listen why MBIA was a catastrophe waiting to happen. With the onset of the credit crisis, the problems exposed turned out to be bigger than MBIA. An unquestioning acceptance of credit ratings, a blind eye to leverage, a dangerous reliance on financial models, and the abandonment of common sense had become part of a deeply flawed financial system. The collapse humbled nearly every large financial institution and plunged the country into recession.

 And if you wonder why no one has been held accountable for the sea of fraud that nearly drowned us all, Robert Scheer's The Great American Stickup: How Reagan Republicans and Clinton Democrats Enriched Wall Street While Mugging Main Street explains the bi-partisan nature of the big screw job.

Here's Scheer:

If we accept a broad dispersal of blame or a sense of inevitability -- or simply ignore the details, since they can be so confusing -- we lose the opportunity to rearrange our institutions to prevent such disasters from happening again.

That this is true has only been reinforced by the tentative response of the Obama administration in its first year. Even after a crash that economists agree is the biggest since the granddaddy of 1929, the president's proposed reform legislation stops far short of reintroducing the kind of regulation of the markets that prevented such disasters in the intervening eighty years. We still see a persistent fear, stoked by the same folks that led us into this abyss, that regulation and scrutiny will kill the golden goose of Wall Street profits and, by extension, U.S. prosperity.

If we as a people learn anything from this crash, however, it should be that there are no adults watching the store, only a tiny elite of self-interested multimillionaires and billionaires making decisions for the rest of us. As long as we cede that power to them, we can expect to continue getting bilked.

The great financial collapse wasn't something that "just happened" it was something that was done to us by a handful of bad actors at the tops of our business establishment and both political parties.

We need to understand this because they're coming for our Social Security next.

Tags: financial crash, bob rubin, Christine S. Richard, Bill Ackman, Robert Scheer, Goldman Sachs (all tags)

Comments

9 Comments

50 days out to election

Is this is the type of posts we see.

WE ARE TOAST in Nov.

 

We were so close.   Re-districting post Census is going to make it that much harder to crawl back into meaningful power in the coming years too.

 

by RichardFlatts 2010-09-14 05:20PM | 0 recs
RE: 50 days out to election

"we" weren't anywhere near meaningful power. The same people who've been in charge stayed in charge. I didn't vote for Rahm. I didn't campaign for Rahm. I didn't volunteer for Rahm. I didn't contribute for Rahm.

If you think Rahm is "us" or "we" I hope for your sake you're a wealthy Democratic donor or powerful elected official. 

by Texas Nate 2010-09-14 09:12PM | 0 recs
RE: 50 days out to election

Well I am sure you will like John Boehner .. and maybe Mitch McConnell too ... a whole lot better.

The power you seek can only come over time.   I actually give the conservatives credit for this reason.  Since the 1960s they have toiled and kept at, dealt with setbacks,  to get to where they are today which is in control of one of the 2 major parties, and about to regain a serious chunk of power (The House) after having only lost it for 4 years.

 

Back in '06 I really thought the Democrats had a chance to maybe hold Congress for a good bit of time ... 8 to 12 years maybe.   Nope.   Liberals seem bent on giving it away much much faster.

by RichardFlatts 2010-09-15 08:58AM | 0 recs
RE: 50 days out to election

I disagree.

It's not the liberals who are giving it away. It's the centrists like Rahm-Summers-Geithner who have been pushing policies that make the Democrats look weak and inempt and who push for half-mesures that don't actually fix problems.

by jeopardy 2010-09-15 11:47AM | 0 recs
RE: 50 days out to election

So we are as crazy as the Republicans now.  If we actually work to pass something... which in DC always requires some compromise ... then the people who reached out to one or two or three of the moderately sane Republicans are to be banished.

If that is true the government is truely screwed.   If Dems won't be the adults we are screwed.   Because we know the Repubs won't be.

by RichardFlatts 2010-09-16 11:08AM | 0 recs
Question for Nate

If you think the game is rigged inside the system, what kind of outside-the-system things do you think can help? I'm thinking if we have big losses in this year's election, the status quo will have even more influence to cement their control over the gov't in upcoming elections.

by hnic357 2010-09-14 08:06PM | 0 recs
RE: Question for Nate

man I wish I had those answers.

by Texas Nate 2010-09-14 09:13PM | 0 recs
Nate, I wish you are wrong.

But I'm afraid I have to agree with you.  We've had a Democratic president and a Democratic Congress in the midst of the worst economy in years, and the Catfood Commission has Social Security in the crosshairs?!?!  What is wrong with this picture?  The Dept. of Justice has yet to prosecute anyone responsible for this mess except for the fall guy, Madoff. 

If you really want to get depressed (but enlightened), start looking at the economic blogs.  I especially like Jesse's Cafe Americain and Naked Capitalism. 

by weinerdog43 2010-09-14 10:26PM | 0 recs
The beatings will continue until moral improves

We elected this president and he turned his back on his base, embracing the people in Wall street and even Republicans. I don't know what this administration was thinking putting up his image over and above the Democratic party, decimating the grassroots and promoting bipartisanship instead of good governance. Now the progressives are to blame for not being enthusiastic and dousing this fire whose flames have been fanned by this administration. We are heading for a bloodbath and it the fault of this administration for not rallying the troops early on but disappointing them with mealy-mouthed triangulations.

by tarheel74 2010-09-16 11:24PM | 0 recs

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