A troubling consistency

I had the pleasure of hearing Yves Smith (who, for the record, is a lady) at a little bookstore here in Manhattan where she was promoting her fascinating book, Econned, (subtitle: How Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism). It’s great to hear someone who knows finance from the inside explain why our inclination to storm Goldman Sachs with pitchforks is entirely justified.

Smith writes a lively blog called Naked Capitalism and is broadly of the pessimist/skeptical school. She argues that the financial industry ‘as now constituted is a threat to the public’. She also thinks the much ballyhooed ‘reform’ bill now slogging its way through Congress to prevent another financial meltdown is pretty much a joke and agrees with the doomsayers that the financiers escaped largely untouched, meaning that eventually they will do it all over again with equally disastrous results or worse.

She is particularly scathing on the arguments being used by the banker lobbyists that certain rule changes (in the derivative area, for example) are bad because they would prevent banks from earning enough money. She uses the car industry to explain metaphorically: ‘If it turned out that a peculiar shared defect meant that all cars manufactured would burst into flames every seven years, it would not be acceptable for car makers to argue, “Well, if you made us fix that problem, our ROE [return on equity] would stink.”’

Finance is arcane enough that no one not really versed in the stuff can entirely grasp the implications of these measures although we can rely on trusted authorities to guide us. But the impression that Obama is too concerned about satisfying the big players at the commanding heights is only reinforced by the news that the shameful Guantámano Bay dungeons may be allowed to remain open because no one in the hopey-changey White House really gives a shit—certainly not enough to risk political capital and a berating by Fox News.

In both cases we see an Administration, duly elected by millions of people eager for a new approach with new priorities, caving to the same people who ran the show during Bush II: the rich and the reactionary. Despite Obama’s lofty rhetoric about eliminating torture and restoring decency, putting an end to Wall Street’s looting and pursuing a peace-oriented foreign policy, instead we get buckling on Guantánamo, no change on rendition, officially authorized assassination campaigns against U.S. citizens, postponement of basic civil rights for gay and lesbian service members, an escalation of attacks against whistle-blowers, impunity for the torturers and a quixotic, probably doomed war in Afghanistan to defend a tyrant and his opium smuggler brother.

We thought we heard a visionary when listening to Obama’s speeches. Instead, we appear to have got a bureaucrat with the instincts of an arbitration judge, trying to broker a deal between opposing sides. Juan Cole pegged it in his essential writings at ‘Informed Comment’:

‘Obama has largely misunderstood the historical moment in the US. He appears to have thought that we wanted a broker, someone who could get everyone together and pull off a compromise that led to a deal among the parties. We don’t want that. We want Harry Truman. We want someone who will give them hell. We don’t want him to say one day that Wall Street is making obscene profits when the rest of the country suffers, then the next day say that the bankers deserve their bonuses. We don’t want him to mollify Big Oil one day then bash it the next’.

I believe that Cole is right, that Obama could go down as the worst president since Jimmy Carter and for the same reason, too: an inability to develop a fighting worldview that can resist the organized, reactionary fury of the shadow state, the corporate elite and the Christian bigots. Instead, he manifests a hapless me-tooing after the worst tendencies of his enemies under the misguided belief that they are reasonable people seeking a responsible, half-way outcome. General McChrystal more accurately reflected their feelings in his scornful comments to Rolling Stone, but it’s nothing more than the usual output from Fox, congressional Republicans and tea-party favorites like Palin. If Obama can’t hear them he’s suffering from a serious case of denial.