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Editor's Note: Click here to join the protest!
The Rip Off Must Be Stopped!
Big bankers ruined our economy and now they are gaming the political system so they can profit even more off the crisis they caused. They must be stopped.
On April 11th, 2009, the public will come out in cities across the country to express their frustration and disapproval with how our elected officials have handled the economic crisis. No one has been left unscathed; this protest is yours.
***
A reassuring new story line is emanating from our leaders. I heard Rep. Barney Frank, D-Mass., chairman of the House Banking Committee, explain it. Then I read the same line in a Washington Post news story. That tells me people in high places are selling it.
Dynamic capitalism, they explain, invents ways to create greater wealth, but sometimes it goes a little too far. Then government has to step in to correct things. This need typically occurs every generation or so, all in a day's work.
The Obama administration is proposing "sweeping" new regulatory laws so capitalism can continue its good works.
The story makes disturbing current events sound practically normal. But what are the storytellers leaving out?
They aren't saying that this financial catastrophe was not merely an inevitable development of history but a manmade disaster. Greedheads on Wall Street did their part, but so did Washington. The reason we need new rules is that a generation of Democrats and Republicans systematically repealed or gutted the old ones -- the regulatory controls enacted 80 years ago to remedy the last breakdown of capitalism (better known as the Great Depression).
The White House executed a nifty two-step this week to re-educate the public and deflect anger. On Tuesday, Treasury Secretary Timothy Geithner relaunched the massive bailout of banking and finance. Knowing how unpopular this is with the people at large, Geithner followed on Thursday with his "sweeping" plans to re-regulate the bankers and financiers.
Whenever official plans are called "sweeping," it indicates that they really, really mean it this time.
Most Americans are not financial experts. It's very difficult, nearly impossible, for normal mortals to sort through the dense policy talk and conflicting opinions to figure out if the rhetoric of reform is real.
Confusion is widespread in the land. Most Americans want to believe this president is leading us out of the swamp, but how can they know? I say, trust your gut feelings. They are as reliable as the learned experts.’
Many Americans want to believe because they think that returning to "normal" means their decimated 401(k) retirement accounts might somehow recover the 30-40 percent that disappeared during the past year. If it takes monster bank bailouts to restore stock-market prices, let's have bailouts.
Good luck with that.
The Dow has regained 21 percent in two weeks of rallies, but I remind friends that steep, short bursts in the stock market do not foretell the future of the economy. Banks may be relieved of their losses without changing the general economic outlook. After the crash of 1929, there were occasional stock rallies, followed by fierce bears. It took 25 years (until 1954) for the Dow to regain its old peak.
Another way to assess the Obama plan for reform is ask: Who likes it? The verdict was swift and sure after Geithner's twin announcements. Wall Street likes it.
The blueprint for regulatory reforms was applauded by the Securities Industry and Financial Markets Association; the American Insurance Association; and the Private Equity Council, the trade group for the major private funds that will get public money and backup insurance to buy the banking system's rotten assets.
This could be born-again patriotism. Or it could be the animal appetites of financiers smelling gorgeous opportunity for returns.
This may be one of those moments where people can find some guidance from their moral convictions. They do not need to know all the details to ask simple questions.
Does the outline of what's happening to rescue major financial institutions seem morally wrong? Or is it justified by the larger necessities of the national predicament? Is the government insufficiently tough in demanding reciprocal commitments from the beneficiaries? Should Washington pursue larger structural changes in the banking system?
Trying to imagine alternatives to the bankers-first bailouts is a good place to start. What follows are suggestions I produced at the request of young people organizing demonstrations around the country for April 11. They call themselves A New Way Forward. I hope they light lots of bonfires.
See more stories tagged with: banks, new way forward, financial industry, corporate state
William Greider is the author of, most recently, The Soul of Capitalism (Simon & Schuster).
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