Even Obama’s beholden to them

The more I learn how Wall Street influence over Washington has allowed the financial meltdown of 2008 to grow into a worldwide disaster, the harder it gets for me to continue to support President Obama.

Though he campaigned as a champion of Main Street and promised financial market reform and re-regulation, Obama quickly showed that he was really about business as usual — not merely by supporting George W. Bush’s bank bailout and the TARP, but also bringing into his White House the same gang of deregulating crooks and liars who got us into this mess in the first place.

For telling this story in the kind of detail that will make your blood boil, Inside Job richly deserves the Academy Award it just received for 2010’s best documentary.

Post for "Inside Job" filmInside Job
Directed by Charles Ferguson
Narrated by Matt Damon
120 min, DVD $28.95

Not one douchewad behind bars yet

“Forgive me,” director Charles Ferguson began his Oscar acceptance speech, even before thanking the Academy. “I must start by pointing out that three years after our horrific financial crisis caused by financial fraud, not a single financial executive has gone to jail, and that’s wrong.”

By now, we’ve heard about plenty of financial fraud. There’s been plenty of investigatin’ goin’ on at Capitol Hill, too. And it’s all been great fun.

Who can forget the scene replayed in Inside Job when Michigan Senator Carl Levin questions Goldman exec Dan Sparks on the infamous “shitty deal” that the company foisted onto its own clients.

Quoting a Goldman e-mail: “‘Boy that Timberwolf was one shitty deal,'” Levin said. “How much of that shitty deal did you sell?” Levin’s performance, with eleven repeats of the key phrase, still makes great (PG-13) TV. (And don’t miss the hilarious hip-hop “Carl Levin ‘Shitty Deal’ Remix”).

But even though fraudsters from Bear Stearns to Fannie Mae certainly do deserve jail time, is it fair to blame the whole financial crisis on speculating scoundrels? What about the role of peak oil, which we now know came in 2006, just two years before the bank meltdown?

The media seems uninterested in how $140-a-barrel crude oil helped cause the Great Recession by taking money out of families’ pockets that they would’ve used to service their mortgages and buy iPods, Nikes and venti mochaccinos from Starbucks. So I was disappointed, but not surprised, to see that Inside Job doesn’t even touch on the topic of energy. How I would have loved to hear Matt Damon talk about that.

But even the most dogged peak oiler must recognize that Wall Street con games played a big part in crashing the world economy and putting millions of people out of work and out of their homes.

Why it’s called an “inside” job

The film shows very clearly that even after 2008, the foxes are still guarding the hen house, starting with top Obama finance officials Larry Summers, Timothy Geithner and Ben Bernanke.

Inside Job singles out Summers for a special place in hell. Summers was a Harvard economics professor who made more than $20 million as a consultant to and lobbyist for Wall Street firms. When he moved into government, he fought from the inside to loosen oversight on his former clients. Most famously, he served as Bill Clinton’s Treasury Secretary where he oversaw passage of the Gramm-Leach-Bliley Act, which paved the way for the many mergers that created banks too-big-to-fail.

By 2008, Summers was ready for his close-up in the Obama White House. As Ferguson writes,

Then, after the 2008 financial crisis and its consequent recession, Summers was placed in charge of coordinating U.S. economic policy, deftly marginalizing others who challenged him. Under the stewardship of Summers, Geithner, and Bernanke, the Obama administration adopted policies as favorable toward the financial sector as those of the Clinton and Bush administrations—quite a feat. Never once has Summers publicly apologized or admitted any responsibility for causing the crisis. And now Harvard is welcoming him back.

Blame it on Wisconsin

It’s clear from Inside Job that the Democrats have become just as beholden to Wall Street as the Republicans are to Big Oil.

Of course, ever since the twenties, the GOP has been the party of big business. But back in the day, say in the 1950s, the Democrats were different. Aside from coddling segregationists, the Democrats also fought for labor rights and middle-class benefits. That’s because, as Kevin Drum has argued compellingly, until the 1970s organized labor served as a source of campaign cash and grassroots feet-on-the-street for the Democrats to counterbalance the support that Republicans got from big business.

But after the rise of anti-war hippies and greenies in the Democratic Party created a split with the beefy steelworkers and teamsters who tended to be socially conservative, unions faded as a reliable source of support for Democrats. Obviously, globalization and corporations shipping manufacturing jobs offshore to Mexico and China also decimated private-sector unions. Either way, with labor so weakened, Democrats needed to find another source of support. And where in America could they turn but to big business?

A new counter-balance to corporate power

Now, if the middle-class revolt in Wisconsin continues to spread to workers across the country, can a new force representing working people and small businesses — either traditional labor unions or some new type of alliance between economic justice and green groups — arise to challenge the power of big business over both parties?

I’ll probably hold my nose and vote for Obama just to avoid the disaster of a President Romney or Pawlenty, who would no doubt drop energy and climate policy in the lap of the Koch brothers. But I’d do much more than vote for the guy if Obama would kick Wall Street to the curb and set himself up as a trust-buster a la Teddy Roosevelt.

Inside Job shows just how badly America needs to put finance back in its place as a service industry, a minor part of the economy that doesn’t create any value but just moves money around. No longer should we accept NYSE greedheads as the masters of our political and social universe.

– Erik Curren

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Comments

  1. Phoinex says

    Erik,

    I really enjoy Transition Voice.The variety of your articles captures the fact that we live in a non-linear/holisitic world. Unfortunately, few grasp that basic fact. Tom Whipple had a good article on Energy Bulletin the other day. He focused on how the nuclear tragedy in Japan might effect oil prices.
    While the initial reaction was that Japan’s oil consumption would decline, he made a good case that it would be just the opposite. Japan would look to other energy supplies to make up for the loss of nuclear power, and that substitute energy would be diesel. The world’s third largest economy would need lots of diesel fuel.

    On another note and to continue on your theme stated above, removing the financial industry from sharing in the economic pain, and placing that pain solely on the middle class is not the answer. More than anything else, we need to be reassured that the group that brought on much of the chaos we are now living through will pay the price for that chaos. Rather the victims will pay the price, and that may be the reason for much of the anger we are now seeing.

    The disenfranchised (us) need a new voice becasue it’s obvious that the two major parties have lost that ability to speak for us. I believe it was Thomas Jefferson who said we need a revolution every 15-20 years. He instinctively new that power tends to corrupt, and the only way to clense the nation’s arteries is to throw the rascals out, and start over. We hoped that the political process would be that revolution, but economic powers have captured and corrupted that process. What is going on in Wisconsin and other states may be the only recourse we have. Keep up the good work

    • says

      Dear Phoinex — Thanks for your nice comment. I’m glad you like Transition Voice and that you get something out of our articles. We’re blessed to have talented writers who so generously give from their minds and hearts. Thanks too for reminding me what Jefferson said about the need for periodic new revolutions as a regular tune-up to the democratic system. I do hope that the Transition movement and people who care about peak oil/climate can be a positive force to promote the people power moving out from Wisconsin and bring that needed next American revolution. Whether it’s starting and growing a third party (does America have time for that?) or finding a way to wrest one or both of the existing parties away from corporate control, we can’t leave national politics out of our local, family and personal transition plans. Keep fighting the good fight.

  2. says

    My sentiments exactly as I watched. However, I still believe that Obama is as good as it gets in 2012 and I will vote for him. The only thing I trust a Republican or Teabag to do better is add to the failure of Reaganomics, i.e. deregulation. I encourage others to write to President Obama and their representatives and urge them to fire and prosecute anyone associated with the fraud of lying to investors by false statements, withholding critical information, and excessively rewarding themselves. Whatever happened to philanthropy and being cool? Who are these MF’s? I can’t even begin to wrap my mind around why anyone would rather be an a*hole than be Robin Hood. Who needs 4 private jets? Freaks. It’s like a kind of anorexia – oh, but let’s not pity them and call thim “sick” or “disordered”. They are merely bad. Bad and hideous on the inside. I don’t know why anyone would want to be them. I’d rather invest in the Arts, Music, Education, and helping American kids in the foster system.

    • says

      Saardu — I’m not eager to have any of the current GOP contenders in the White House. They all coddle the wealthy at the expense of the middle class and they all are beholden to fossil fuel interests, so they’ll be terrible on energy and climate. But since Obama knows that progressive voters have no real alternative, I don’t think he takes our issues as seriously as I’d like. So it would help to have an alternative who wasn’t a clown or a scoundrel. Climate activist Tim deChristopher thinks that former Utah Governor Jon Huntsman would be a real alternative, since he’s a truly moderate Republican. Unfortunately, that seems to be a dying breed, which explains Huntsman’s poor showing in the polls so far. So in 2012, it’s probably going to be Romney vs Obama, and it’s hard to see much choice there.

  3. Anders Barfod says

    Glad I found this site… So many good articles that tell you the complex side of the political world today..
    I am also a bit disspointed that Obama did not go more after the reckless financial executives that has caused a lot of the problems of the 2008 recession. I live in europe and a lot of our banks have also been reckless about lending out money to countries and ventures without any considerations and now we have to bail them out.. Complaining about Greece large state spending ,, lack of financial control, tax control etc.. It was allready bad when they steeped into the monitary union,, but who has been willing to let them live this lifestyle since .. Banks all over Europe.. The same thing in Spain.. They have been building huge house complexes, shopping malls etc. at an alarming rate the last 10 years.. Where did the money come from.. ??
    Anyway things are coming to a change in the near future.. One word: Peak oil… The entire industrilization is built on the easy accsess to energy in the form of fossil fuels.. What are we to do when it is a very limited resource.. It takes decades to change our world to one running on alternate sustainable energy sources… Let us be wise.. look ahead more than the election term..

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