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Game On, GOP |
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Written by <a href="index.php?option=com_comprofiler&task=userProfile&user=7118"><span class="small">Carl Gibson, Reader Supported News</span></a>
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Friday, 11 May 2012 15:06 |
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Gibson writes: "The 2012 election is a field full of bratty, intolerant, whiny kids on the field who want to have everything their way and nothing our way. Let's stop giving them legitimacy and play our hardest until we win."
GOP Senate primary candidate Richard Mourdock prays during a rally held for him, Saturday, May 5, 2012, at Veterans Plaza in Indianapolis. FreedomWorks, a national tea party group, was responsible for the rally. (photo: Danese Kenon/Indianapolis Star/AP)
Game On, GOP
By Carl Gibson, Reader Supported News
11 May 12
Reader Supported News | Perspective
Imagine yourself as a youth playing neighborhood baseball games on the street in the summertime. What if the parents of a bratty, asocial kid demanded their son be included in the game, too? Would the other kids who come out and play from all over the neighborhood still be willing to participate if the neighborhood brat insisted on the game being played under his strict interpretation of the rules? And if attendance dropped to just you and your friends vs. the bratty kid, would you walk home in disgust and let him ruin your fun, or would you and your friends be determined to defeat the bratty kid under his rules and send him home crying?
Dick Lugar just lost the Indiana GOP senatorial primary because his opponents accused him of being "Obama's favorite Republican." To be clear, that allegation is preposterous. Lugar sided with McConnell on just about everything. He voted NO to making millionaires pay the same tax rate as their secretaries. He supported the Bush tax cuts that led to the vast redistribution of wealth from the bottom 90% to the top 1% over the past decade. He voted NO to the Violence Against Women Act. He voted YES to building the Keystone XL pipeline, and to the war in Iraq. He opposed the Affordable Care Act of 2010. He even voted in favor of indefinite military detention of US citizens without trial.
By all accounts, Dick Lugar was a hardline conservative Republican. But his opponents put Lugar on the sacrificial altar to send a message not just to his Democratic challenger, but to the Republican party as a whole: the days of bipartisanship are over, and now we're playing hardball. Lugar's victorious Tea Party Republican challenger, Richard Mourdock, heavily funded by Super PACs like Karl Rove's Crossroads, said his interpretation of bipartisanship was that it "ought to consist of Democrats coming over to the Republican point of view."
With this quote came the dropped jaws of the establishment politicians and beltway media right on cue, who just couldn't believe that the Republican party's Senate nominee in Indiana would be so dismissive of the congenial attitude, comity, camaraderie and compromising, bipartisan nature of the US Senate. By gum, if the Senate were full of people like this Mourdock guy, the media breathlessly argues, the Senate would never get anything done!
What planet have these people been living on since 2009?
Senate Republicans, under Mitch McConnell's leadership, have made sure that nothing will get done until Barack Obama leaves the White House. McConnell has openly stated that his chief goal as Senate Minority Leader isn't to create more jobs, expand the tax base, balance budgets, or anything of the sort - his chief goal has openly been to defeat President Obama. And so far, McConnell's stern partisan gridlock has held. Anything that isn't in total lockstep with McConnell's plutocratic views gets filibustered, since 60 votes are now needed to even bring a bill up for debate.
McConnell and his ilk thinking in such a destructive way inspires their base to take on that destructive thinking, who actively cheer for the destruction of America's economy, just so they can blame it on Obama. The right's leading ideological beacon openly wished for the president's failure before he was even inaugurated. The most fervent Tea Party radicals have urged small businesses to not hire so the economy will remain slow. The partisan gridlock in Washington is fuel on the fire for the same folks who make terrorist death threats against Democratic senators, even going so far as to slaughter pets to prove their hatred of the left, and willingness to score political points even if it comes at the cost of our nation's well-being.
Since 2009, the Senate has been full of Richard Mourdocks who are hell-bent on ensuring that the Wall Street bankers and war profiteers who fund their campaigns get more money, even if it means regular folks lose their jobs, schools and communities to budget cuts. Most Republicans in the US Senate are millionaires who come from corporate and financial backgrounds, and bring corporate culture to the capitol when they legislate. Corporate hierarchy rewards ruthlessness and competition with power, while the Constitutional demands of public office are in service of "promoting the general welfare."
The military-industrial complex uses the phrase "collateral damage" when describing the unplanned deaths of innocent women and children. Corporate executives use the phrase "downsizing" to increase their profit margins at the cost of wrecking the lives and upending the careers of thousands. Politicians coming from a life in corporate culture, like Mourdock, use the phrase "austerity" to describe the pillaging of public education and health care to keep taxes low for their corporate backers. Corporate executives and bankers can and have ruined their companies to make off with billions. War profiteers have destroyed nations to exploit resources and be wildly profitable. Far-right corporate-backed lawmakers will undermine their constituents' needs for corporate profit, and be expected to get a lucrative lobbying deal out of it.
The current crop of Republicans in the House and Senate seek to reinstate the gilded age, where the vast majority of wealth pools into the hands of an elite few, and where the common folk are doomed to a life of constant struggle and poverty so those at the top can have even more. Scum like Mourdock, who compare their efforts to tax poor people to Lincoln's fight against slavery, need to be bullied by their political opponents for siding with the .01% over the bottom 90%. And they need to all be soundly defeated in November of 2012. That must be the message we send the Republican party: quit your bitching and get back to work, or you're fired.
The 2012 election is a field full of bratty, intolerant, whiny kids on the field who want to have everything their way and nothing our way. Let's stop giving them legitimacy and play our hardest until we win. They won't stop until we knock every pitch they throw at us out of the park, and send them home with bloody noses and tear-stained cheeks.
It's game time. Batter up.
Carl Gibson, 25, is co-founder of US Uncut, a nationwide creative direct-action movement that mobilized tens of thousands of activists against corporate tax avoidance and budget cuts in the months leading up to the Occupy Wall Street movement. Carl and other US Uncut activists are featured in the documentary "We're Not Broke," which premiered at the 2012 Sundance Film Festival. He currently lives in Old Lyme, Connecticut. You can contact Carl at
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
, and listen to his online radio talk show, Swag The Dog, at blogtalkradio.com/swag-the-dog.
Reader Supported News is the Publication of Origin for this work. Permission to republish is freely granted with credit and a link back to Reader Supported News.
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Why Wisconsin's Recall Clusterf#@k Matters |
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Written by <a href="index.php?option=com_comprofiler&task=userProfile&user=16177"><span class="small">Rick Perlstein, Rolling Stone</span></a>
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Thursday, 10 May 2012 15:07 |
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Perlstein writes: "When signature-gathering to recall Republican state legislators got off to a strong start last spring, and as the months wore on the news kept getting worse for Gov. Walker."
Spectators cheer as recall volunteers deliver boxes containing signatures to recall Gov. Scott Walker in Madison, Wisconsin. (photo: Mark Hirsch/Getty Images)
Why Wisconsin's Recall Clusterf#@k Matters
By Rick Perlstein, Rolling Stone
10 May 12
 'll never forget the day the Badger State made me cry. It was last year, on a lovely Saturday in February, and I was in Madison to witness the triumphant return to the state capitol of fourteen Democratic Wisconsin state senators. They'd fled the state 22 days before to deny GOP Gov. Scott Walker the quorum he needed to ram through a bill stripping public workers of their collective bargaining rights. (It passed anyway.) I’d stopped en route for a bathroom break at a packed cafe where ordinary folks looking just like the media's idea of "real Americans" - dudes in John Deere caps and non-ironic flannels and beards who looked like they'd just climbed down from the duck blind; hefty salt-of-the-earth ladies who probably never met plate of arugula in their lives - were making a pitstop before heading back out to vent their anger at the governor. They were practicing something I'd never seen before in my life: potty triage. No parallel queues - a short one to the Men's Room and a long one for the Women's - but just a mass of folks yielding equal-opportunity toilet access to whosoever had to go to the bathroom the worst.
This, I thought, is what democracy looks like.
The cause of their wrath, Gov. Walker, had ridden the Tea Party wave to a six-point victory the previous November on a vague platform of budget-balancing and job creation. Once in office, he immediately turned around and began whipping his Republican legislative majority to passage of the collective-bargaining bill, and this in the state that, in 1932, first invented the idea of the public employee's union. The measure was called the "Scott Walker Budget Repair Bill." But the public workers had already agreed to concessions in their pension contributions that would have closed the budget shortfall - leaving nobody in doubt that Walker was really out to break the unions. Wisconsinites rose up - all sorts of Wisconsinites. Even public safety workers - police officers and fire fighters - whose unions had endorsed Walker joined the tens of thousands massing at the state capitol day after day, even though Walker had specifically exempted them from his law’s collective-bargaining provisions. The crowds - bigger even than those that gathered at the height of the Vietnam War - marched, sang, partied, exulted. The day I was there, in a solidarity hard hat graciously loaned me by my pal Pipe Fitter Bill, the signs were as funny as anything Jon Stewart's writers could have come up with: "WALKER, DOES YOUR WIFE KNOW YOU'RE SCREWING MINE?"; "WAL-MART CAN RUN SCHOOLS REEL CHEEP."
The protesters were Middle Americans, and they were loaded for bear. Already, activists that sunny February day were busy gathering petitions to recall Walker and his Republican colleagues in the legislature. They made a strong case. In going after unions' bargaining rights, Walker had pulled a similar bait-and-switch trick to the one George W. Bush tried after his reelection, in 2004, when he proposed privatizing Social Security, claiming his election victory as a phantom "mandate" for an extremist idea he had never even broached on the campaign trail. What’s more, Walker pursued his goal with a secrecy that was deeply offensive to the Wisconsin’s traditions of aboveboard government. The stakes were high, not just for public workers and union members, but for anyone who believed in good government at all. Last July, Racine County took advantage of a provision of the new law's eliminating "union-only" public job classifications and began using prison inmates to do their landscaping, painting, and maintenance work.
When signature-gathering to recall Republican state legislators got off to a strong start last spring, and as the months wore on the news kept getting worse for Gov. Walker. His boast of being a job-creator was crushed when it was announced in October that the state had added only 5,500 non-farm jobs in the previous twelve months. His claim to be a budget balancer was undone by the $1.6 billion in corporate tax breaks he had championed that left the state budget $117 million deeper in arrears. He bent regulations to allow a mine to be built by some sensitive Lake Superior wetlands - no small political blunder in a state where hunting and fishing is religion. By the end of the year, polls found 58 percent of Wisconsin voters favoring his recall - including 24 percent of Republicans, up from only 7 percent in spring. In January this year, the recall election was scheduled for June 5 after an astonishing million voters' signatures were submitted, way more than they needed. In March, a federal judge said Walker's law violated the First Amendment because it maintained collective bargaining rights for the police and fire unions that endorsed him while stripping them from the unions that didn't. In April, the federal courts struck down a strict voter I.D. law designed to make it harder for Democratic constituencies to vote and counted upon by Republicans to help Walker pull through. Then Walker found himself reeling further with the announcement that during the month of March state had lost 4,500 jobs.
And let's not forget what the Cheeseheads call "Walkergate." Before he was governor, Walker was the commissioner of Milwaukee County, whose office the district attorney has spent the last two years investigating as a fetid cesspool of corruption. Here's the nub of it: Walker has one of those "longtime close associates" newspapers refer to when they really mean "crony," a fellow by the name of Tim Russell, whom Walker had placed in eight jobs over eight years even though he was fired by the state in 1993 for gross misuse of public funds. One of his jobs for Walker was running the county's veterans affairs, including taking over a fund for wounded Iraq veterans that had been run successfully by the American Legion, but which Walker decided the county should take over. Russell has been charged with embezzling $25,000 earmarked for a veterans picnic from the fund, which he’s alleged to have spent on Hawaiian and Caribbean vacations, perhaps with his domestic partner. Oh, and that domestic partner is an alleged child molester, which would be neither here nor there, except for the fact that this is politics, where, it is said, the surest way to earn voters' disfavor is to be found in bed with a dead girl or a live boy. Russell is also apparently responsible for putting together a top-secret email system for Walker aides that may violate Wisconsin's strict open records laws. The ongoing probe is a "John Doe" investigation, its targets unnamed, but the governor seems to fears one of those targets includes himself. He has recently lawyered up, and established a legal defense fund deploying three words not usually sounded together in the Badger State: the "Scott Walker Trust."
When it comes to Wisconsin Republicans, it seems to be corruption all the way down. In February the Milwaukee Journal Sentinel reported that GOP lawmakers signed legal agreements not to discuss the crooked gerrymandered maps they were constructing in 2011 to create 59 Republican-leaning assembly districts to 40 for Democrats, even though Wisconsin voted Democrat in the last five presidential races by an average of 53.4 percent, because if they did so they might be called as witnesses in court cases. "Public comments on this map may be different than what you hear in this room," one related document reported in the Journal Sentinel instructed legislators. "Ignore the public comments."
So, hey, given all that, Scott Walker must be toast, right? Not so fast. Here's the hurdle: a primary election, today, to decide which Democratic candidate will face Walker next month. There are no less than four candidates vying for the nomination, which would be bad enough; but of the two top competitors, one is the same uninspiring personage, Tom Barrett, who lost to Walker by six points in 2010, and who entered the campaign a little more than a month ago - the same Tom Barrett, moreover, who as Milwaukee mayor proved conflicted enough about the very anti-union law that inspired the recall. But thanks to his name recognition and endorsements from the Democratic establishment, he's running ahead of a former county executive from Madison named Kathleen Falk, who has the backing of most of the unions who started the uprising in the first place, and who favors a much more effective and hard-nosed strategy to repeal the anti-union law. But Falk is no winner, either: she lost two statewide races in a decade, for attorney general in 2006 and for the gubernatorial nomination in 2002.
The two potentially inspiring candidates, meanwhile, Jon Erpenbach, media star of the Fab 14 (the state senators who skipped town to block Walker's law), and Russ Feingold, the beloved former three-term U.S. senator, declined to jump into the race, leaving Republicans gleeful. "They set up this World Series event, and they didn't get the people they wanted to run," a smug Reince Preibus, head of the Republican National Commission said recently. "And so what they have are a couple of people who have perfected the art of running for statewide elections and losing." The recently retired congressional liberal lion David Obey, who’s endorsed Barrett, has been even harsher: He calls the close primary race a "suicide pact." Although that might be overstating things - the latest polls show a tightening race - Walker is still the presumptive favorite.
OK, but why should anyone outside of Wisconsin care about this? Here's why: the voting in Wisconsin this spring "will be the first national test of the possibility of democracy in the Citizens United era," writes Ruth Conniff of the Madison-based magazine The Progressive, referring to the historic Supreme Court ruling that allowed unlimited spending on polticial campaigns. If conservatives succeed in breaking public unions in Wisconsin, they will try the same thing everywhere, with mind-blowing seriousness. Already by this February, Walker, taking advantage of a loophole that allows donors to recall targets to blow through the state's $10,000 contribution cap, had raised an astonishing $12.2 million dollars; then, by April, he had added $13.2 million more.
That's about twenty-five bucks for every Wisconsinite who casts a vote for a Republican in a typical off-year election - although, of course, most of that money does not come from Wisconsinites but from corporate titans and movement conservatives for whom, as per usual on the right, Walker's law-skirting brazenness has made him a hero, not a pariah. For over a year now he's been touring the nation, seeing their favors, explaining his plans to "make big, fundamental, permanent structural changes" to the shape of governing in America. Bob Perry, chief funder of "Swift Boat Veterans for Truth” (you can read about Perry's Top 40 donors, all of whom have given more than $100,000, here) Amway's Rich Devos, and my BFF Sheldon Adelson, have all given $250,000. And though the Koch family have kept their fingerprints off the effort by not donating any money to Walker directly, attendees at their annual summits where they steer donors to their favorite right-wing causes have given $1.3 million. (Hilariously, Walker last year thanked a prank caller pretending to be David Koch for his support in "getting our freedoms back"). Forty-two percent of Walker’s donations have been plowed right back into direct-mail pieces imploring humble citizens to help Walker out in his fight against the "big labor bosses" and their "unstoppable" national juggernaut.
In actual fact, those would be the big labor bosses whose candidate was abandoned by the Wisconsin Democratic establishment. And also in actual fact the entire Democratic field have together raised $2 million in the last three months in direct contributions to Scott Walker's $13.2 million.
So, $25 per vote from reactionary out-of-state donors versus three bucks and one million petition signatures from regular old Wisconsinites: which one of them will prevail in June will tell us what American democracy will look like - if it will look like democracy at all. It's like one of those posters I saw in Madison last year said. It quoted the Gettysburg Address: "Now we are engaged in a great civil war testing whether that nation, or any nation so conceived or so dedicated can long endure. We are met on a great battlefield of that war." The picket sign added: "MADISON is that battlefield."
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FOCUS: Of Bedrooms and Boardrooms |
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Thursday, 10 May 2012 13:44 |
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Reich writes: "The 2012 election should be about what's going on in America's boardrooms, but Republicans would rather it be about America's bedrooms."
Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)
Of Bedrooms and Boardrooms
By Robert Reich, Robert Reich's Blog
10 May 12
 he 2012 election should be about what’s going on in America’s boardrooms, but Republicans would rather it be about America’s bedrooms.
Mitt Romney says he’s against same-sex marriage; President Obama just announced his support. North Carolina voters have approved a Republican-proposed amendment to the state constitution banning same-sex marriage. Minnesota voters will be considering a similar amendment in November. Republicans in Maryland and Washington State are seeking to overturn legislative approval of same-sex marriage there.
Meanwhile, Republicans have introduced over four hundred bills in state legislatures aimed at limiting womens’ reproductive rights - banning abortions, requiring women seeking abortions to have invasive ultra-sound tests beforehand, and limiting the use of contraceptives.
The Republican bedroom crowd doesn’t want to talk about the nation’s boardrooms because that’s where most of their campaign money comes from. And their candidate for president has made a fortune playing board rooms like checkers.
Yet America’s real problems have nothing to do with what we do in our bedrooms and everything to do with what top executives do in their boardrooms and executive suites.
We’re not in trouble because gays want to marry or women want to have some control over when they have babies. We’re in trouble because CEOs are collecting exorbitant pay while slicing the pay of average workers, because the titans of Wall Street demand short-term results over long-term jobs, and because of a boardroom culture that tolerates financial conflicts of interest, insider trading, and the outright bribery of public officials through unlimited campaign “donations.”
Our crisis has nothing to do with private morality. It’s a crisis of public morality - of abuses of public trust that undermine the integrity of our economy and democracy and have led millions of Americans to conclude the game is rigged.
What’s truly immoral is not what adults choose to do with other consenting adults. It’s what those with great power have chosen to do to the rest of us.
It is immoral that top executives are richly rewarded no matter how badly they screw up while most Americans are screwed no matter how hard they work.
Regressive Republicans have no problem intruding on the most personal and most intimate decisions any of us makes while railing against government intrusions on big business.
They don’t hesitate to hurl the epithets “shameful,” “disgraceful,” and “contemptible” at private moral decisions they disagree with, while staying stone silent in the face of the most contemptible violations of public trust at the highest reaches of the economy.
We must protect and advance private rights of individuals over intimate bedroom decisions. We must also stop the abuses of economic power and privilege that are characterizing so many decisions in the nation’s boardrooms and executive suites.
Robert Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written thirteen books, including "Locked in the Cabinet," "Reason," "Supercapitalism," "Aftershock," and his latest e-book, "Beyond Outrage." His 'Marketplace' commentaries can be found on publicradio.com and iTunes.
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FOCUS: Austerity Can't Be Just for Regular People |
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Wednesday, 09 May 2012 11:30 |
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Taibbi writes: "This sounds like the beginning of what will be a very heated debate over who has to pay for the excesses of the financial crisis. It was previously assumed that everybody but the actual financial services sector would have to pay, but voters in Europe now are refusing to go along, sparking a wave of eye-rolling editorials in the financial press."
Matt Taibbi at Skylight Studio in New York, 10/27/10. (photo: Neilson Barnard/Getty Images)
Austerity Can't Be Just for Regular People
By Matt Taibbi, Rolling Stone
09 May 12
t didn’t take long to crank up the backlash against European voters. This is inevitable whenever a socialist wins a major election, but particularly now, when new French president François Hollande rode to victory shouting, "Austerity can no longer be inevitable!"
This sounds like the beginning of what will be a very heated debate over who has to pay for the excesses of the financial crisis. It was previously assumed that everybody but the actual financial services sector would have to pay, but voters in Europe now are refusing to go along, sparking a wave of eye-rolling editorials in the financial press. Even David Brooks got into the act today, penning a lugubrious editorial about the errant political instincts of the populist masses here and abroad.
Markets all over the world freaked out over the prospect of having ignorant European voters meddling in the recovery process the geniuses of the high finance world had already painstakingly laid out for them. The model for economic progress in the financial bubble era, after all, is supposed to go something like this:
1. Let banks inflate massive asset bubbles with the aid of cheap or even free government cash, and tons of leverage;
2. Before it all explodes, carve out gigantic sums for bonuses and compensation for the companies that inflated those bubbles;
3. After it explodes, get the various governments to bail those companies out;
4. Pay for it all by slashing services to what’s left of the middle class.
This is the model we used in America. We had a monster asset bubble based on phony mortgages, which Wall Street was allowed to inflate to spectacular dimensions with minimal reserve capital, huge amounts of leverage, and tons of fraud for good measure. When that bubble exploded, we first rescued the banks who inflated the thing in the first place, and then our plan for paying for it mostly revolved around folks like Paul Ryan and Chris Christie, who made great political hay by trying to take an ax to "entitlements" like health care and retirement benefits.
They're replaying the same script in Europe, sort of. The causes of crises in places like Spain, Greece, Portugal and Italy vary somewhat and are less simple to define, but a common denominator in all of them is weak growth mixed with giant budget deficits.
In most all of these cases, you had enormous sums of money entering these countries in the middle and late 2000s as global financiers in the midst of the bubble boom looked for higher-yield investments around the world – Spanish real estate, Greek debt, etc.
The local economies sucked up the bubble money, and in Greece's case they used it to ramp up state benefits, which they could no longer afford once the bubble burst. A lot of these countries turned to Wall Street to finance their way out of budgetary messes using swap deals and other hocus-pocus moves, kicking the can down the road as it were, and those decisions are now blowing up in their faces.
Now that it’s the next morning, and everyone has a severe hangover from the bubble, the dominant narrative is that these countries brought their troubles on themselves by being reckless spenders with unsustainable welfare states. The solution, naturally, is going to be "austerity," slashing state budgets, reining in those wasteful citizens with their unreasonable demands for returns on taxes.
Take today's Brooks column in the Times, for instance, which seems aimed at his colleague Paul Krugman (who has been arguing that cutting public spending and job stimulus in European countries will be disastrous). Brooks claims that the financial crisis was caused by "structural" problems, the first of which is that we’ve simply grown out of a need to pay low-skilled workers real wages:
Hyperefficient globalized companies need fewer workers. As a result, unemployment rises, superstar salaries surge while lower-skilled wages stagnate, the middle gets hollowed out and inequality grows.
According to Brooks, this organic trend toward lower salaries for everyone but the "superstars" managing those hyperefficient companies has forced politicians into the bad decision of borrowing and taxing to extend more welfare/charity to the less fortunate:
Politicians tried to compensate by reducing the tax bill, increasing deficit spending, ensuring easy credit for homebuyers and by helping workers shift out of the hypercompetitive, globalized part of the economy and into the less productive and more sheltered parts of the economy – mostly into health care, government and education.
But you can only mask structural problems for so long …. The current model, in which we try to compensate for structural economic weakness with tax cuts and an unsustainable welfare state, simply cannot last.
Naturally, since that welfare state is "unsustainable"” we need to be real about things and stop the deficit spending and the stimulus, etc.
This world view ignores the fact that those "superstar" leaders of "hyperefficient" companies have been sucking up a thousand times as much welfare as those low-skilled workers Brooks is talking about. Here’s how the "superstars" of the banking world sometimes earn their bonuses: they borrow trillions from the U.S. Federal Reserve at zero or near zero interest, then they turn right around and lend chunks of that free money to a place like Greece (ex-FDIC Sheila Bair, in a hilarious editorial on the subject, pegged the ten-year yield at 21%), then they pocket the proceeds and call it capitalism.
Brooks’ analysis of the financial crisis leaves out things like the $16 trillion in emergency loans the banks secretly got from the Fed in the years since the crisis. It ignores quantitative easing, bailouts, and the trillions of dollars of bets Wall Street made on the unreal economy during the bubble years that we all ended up paying for, either through taxes or reduced home values or lowered interest on our savings.
The point is, when people talk about “austerity,” they only ever talk about the pain the general population should voluntarily accept, in the form of reduced services and curtailed “stimulus.” No one ever says the financial services sector should have to cut back on its access to easy money, and there hasn’t been much in the way of serious plans to restore some sanity and prudence to the lending and investing business.
Instead, governments have stood by and allowed banks to lend thirty and forty dollars for every one on the books, they’ve watched lenders almost completely do away with underwriting standards, they’ve continually pumped the big firms full of cheap cash from the Fed and the ECB (printing new trillions when the real money runs out), and they’ve allowed Wall Street to build giant sandcastles of illusory wealth using synthetic derivatives, all with minimal reserve requirements.
The result of all of this easy money is an endless succession of speculative bubbles that simply shift from one market to another as financial companies run around the globe in search of high yields. It was Spanish real estate yesterday, and Euro sovereign debt before that, and American home mortgages at other times, and then it was wheat and corn and other food commodities last year (which led to the social unrest in the middle East), and it was oil in 2008, oil in 2011, and oil again this year, and so on.
In addition to the direct consequence of huge stunning losses when these bubbles collapse, the insane volatility of all of these markets creates panic in the business community, and puts a brake on real lending to grow real businesses. When you don’t know if oil is going to cost $40 a barrel or $140 three months from now, it’s pretty hard to invest in a new airline, or a chain of supermarkets (as commodities, many food prices will also rise and fall with oil), or anything at all, really. It’s not surprising that no one wants to lend in this environment.
I agree with Brooks, all of this is unsustainable. But if pain’s coming, it can’t just be regular people who pay. Bankers have to find new ways of making money that don’t just involve betting the hot table and taking out instant billion-dollar profits. They have to go back to building real businesses and being content with gradual returns over time. If there’s going to be austerity, it has to be for everybody.
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ast Tuesday, for reasons we need not go into here, I happened to be in the U.S. Post Office in Geneva, New York. It is in an old, brick building downtown, just up from the lakefront. It was constructed between 1905 and 1906 in the Colonial Revival style, with four white columns out front arranged, so the architects say, in a Doric entablature. There are huge, arching windows arranged on either side. It is one of 13 post offices throughout New York state that were constructed by the Office of the Supervising Architect of the Treasury Department under the direction of James Knox Taylor, a man who was not beyond some political chicanery. (Taylor got into trouble when he picked his old partner to design the customs house in New York City.) In 1989, the Geneva Post Office was placed on the National Register of Historic Places.
