July 15, 2010
Despite Washington’s festival of self-congratulation, now that the so-called financial “reform” bill is finally becoming law, the public is not being fooled. Rich Miller of Bloomberg News reported that almost eighty percent of the public accepts the premise I discussed on June 28 — that the financial “reform” bill is a hoax. Mr. Miller examined the results of a Bloomberg National Poll, which measured the public’s reaction to the financial reform bill and here’s what was revealed:
Almost four out of five Americans surveyed in a Bloomberg National Poll this month say they have just a little or no confidence that the measure being championed by congressional Democrats will prevent or significantly soften a future crisis. More than three-quarters say they don’t have much or any confidence the proposal will make their savings and financial assets more secure.
A plurality — 47 percent — says the bill will do more to protect the financial industry than consumers; 38 percent say consumers would benefit more.
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Skepticism about the financial bill, which may be approved this week, cuts across political party lines. Seven in 10 Democrats have little or no confidence the proposals will avert or significantly lessen the impact of another financial catastrophe; 68 percent doubt it will make their savings more secure.
The Bloomberg poll also revealed that approximately 60 percent of the respondents felt that the $700 billion TARP bailout was a waste of money. This sentiment was bolstered by a recent report from the Congressional Oversight Panel, disclosing that TARP did nothing for the 690 smaller banks, with assets of less than $100 billion each, which received TARP money. Ronald Orol of MarketWatch provided this summary:
The report said “there is little evidence” that the capital injections led small banks to increase lending.
It also said small-bank TARP recipients have a disproportionately larger exposure to commercial real-estate losses than their big bank counterparts. They are also having a difficult time making dividend payments to the government, a requirement of TARP, and this problem will increase over time, the report said.
The bottom line in reports such as these is usually a variation on the theme presented by pollster J. Ann Selzer, president of the firm that conducted the Bloomberg poll on public response to the financial reform bill:
“The mood of the American public is highly skeptical toward government and its ability to do right by the average person . . .”
With the public mood at such a skeptical level about government, now is a good time to face up to the reason why our government has become so dysfunctional: It is systemically corrupt. Legalized graft has become the predominant force behind nearly all political decision-making. If a politician has concerns that a particular compromise could upset his or her constituents, there will always be a helpful lobbyist to buy enough advertising propaganda (in the form of campaign ads) to convince the sheeple that the pol is acting in the public’s best interests.
Eric Alterman recently wrote a great (albeit turgid) article for The Nation, discussing institutionalized sleaziness in Washington. Despite Alterman’s liberal bias, the systemic corruption he discusses should outrage conservative and independent voters as well as liberals. Here are some of Alterman’s important points about ugly realities that the public has been reluctant to face:
Of course when attempting to determine why the people’s will is so frequently frustrated in our system, any author would be remiss if he did not turn first and foremost to the power of money. The nonpartisan Center for Responsive Politics calculated that approximately $3.47 billion was spent lobbying the federal government in 2009, up from $3.3 billion the previous year. By the final quarter of the year, lobbies were handing out $20 million a day. The most generous spreaders of wealth were in the pharmaceutical and health products industries, whose $266.8 million set a record for “the greatest amount ever spent on lobbying efforts by a single industry for one year” according to CRP. At one point, PhRMA employed forty-eight lobbying firms, in addition to in-house lobbyists, with a total of 165 people overall, according to the Sunlight Foundation’s Paul Blumenthal.
Max Baucus (D, Montana), who wrote the original Senate healthcare bill, raised roughly $2 million from the health sector in the past five years, according to opensecrets.org, despite running in a low-cost media market with marginal opposition.
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Financial power need not be justified merely on the basis of the votes it sways. Rather, it can define potential alternatives, invent arguments, inundate with propaganda and threaten with merely hypothetical opposition. Politicians do not need to “switch” their votes to meet the demands of this money. They can bury bills; they can rewrite the language of bills that are presented; they can convince certain Congressmen to be absent on the days certain legislation is discussed; they can confuse debate; they can bankroll primary opposition. The manner and means through which money can operate is almost as infinite as its uses in any bordello, casino or Wall Street brokerage.
The banal, pretexted debates, focused on liberal vs. conservative, left vs. right, etc. are simply smokescreens for the real problem: the disastrous consequences that governmental influence peddling has on society. Political corruption is bipartisan and in Washington it is almost universal. Campaign finance reform is just one battle to be fought in the war against institutionalized government corruption. It’s time for all of the Jack Abramoffs and their elected cronies to be rounded-up and tossed into the slammer. The public needs to face this ugly reality and demand that laws be enforced, loopholes be closed and bribery be stopped. We are just beginning to taste the consequences of ignoring these problems. Failure to take control of this situation now runs a serious risk of unimaginable repercussions.
Geithner Watch
August 19, 2010
It’s that time once again. The Treasury Department has launched another “charm offensive” – and not a moment too soon. “Turbo” Tim Geithner got some really bad publicity at the Daily Beast website by way of a piece by Philip Shenon. The story concerned the fact that a man named Daniel Zelikow — while in between revolving door spins at JP Morgan Chase — let Geithner live rent-free in Zelikow’s $3.5 million Washington townhouse, during Geithner’s first eight months as Treasury Secretary. Zelikow (who had previously worked for JP Morgan Chase from 1999 until 2007) was working at the Inter-American Development Bank at the time. The Daily Beast described the situation this way:
The Daily Beast story came right on the heels of Matt Taibbi’s superlative article in Rolling Stone, exposing the skullduggery involved in removing all the teeth from the financial “reform” bill. Taibbi did not speak kindly of Geithner:
Just when it became clear that Geithner needed to make some new friends in the blogosphere, another conclave with financial bloggers took place on Monday, August 16. The first such event took place last November. I reviewed several accounts of the November meeting in a piece entitled “Avoiding The Kool -Aid”. Since that time, Treasury has decided to conduct such meetings 4 – 6 times per year. The conferences follow an “open discussion” format, led by individual senior Treasury officials (including Turbo Tim himself) with three presenters, each leading a 45-minute session. A small number of financial bloggers are invited to attend. Some of the bloggers who were unable to attend last November’s session were sorry they missed it. The August 16 meeting was the first one I’d heard about since the November event. The following bloggers attended the August 16 session: Phil Davis of Phil’s Stock World, Yves Smith of Naked Capitalism, John Lounsbury for Ed Harrison’s Credit Writedowns, Michael Konczal of Rortybomb, Steve Waldman of Interfluidity, as well as Tyler Cowen and Alex Tabarrok of Marginal Revolution. As of this writing, Alex Tabarrok and John Lounsbury were the only attendees to have written about the event. You can expect to see something soon from Yves Smith of Naked Capitalism.
At this juncture, the effort appears to have worked to Geithner’s advantage, since he made a favorable impression on Alex Tabarrok, just as he had done last November with Tabarrok’s partner at Marginal Revolution, Tyler Cowen:
It will be interesting to see whether the upcoming accounts of the meeting continue to provide Geithner with the image makeover he so desperately needs.