by Texas Nate, Tue Sep 14, 2010 at 03:53:02 PM EDT
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.
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.