Tuesday, February 24, 2009


"Are you aware it is private property?"
— Sir Howard Kingsley Wood responding to Leo Avery (Member of Parliament)
in late 1939 after Avery suggested bombing
arms dumps in Germany's Black Forest
Bernanke Helps Stocks Snap Back
Bank stocks soared, leading the broader market higher Tuesday after Federal Reserve Chairman Ben Bernanke made the stongest comments yet against nationalizing major Wall Street firms.
— Wall Street Journal, Feb. 24, after markets closed
Bernanke calms nationalisation fears
Stress tests of big US banks that start this week are unlikely to lead to any of them being seized by regulators and nationalised outright, Federal Reserve chairman Ben Bernanke told Congress on Tuesday.
His comments provided the clearest signal yet that US authorities hope to support major banks as going concerns in the private markets, taking equity stakes as necessary to shore up their capital in what would amount to partial nationalisations.

— The Financial Times, Feb. 24, after markets closed

Just whom do Ben Bernanke, Timothy Geithner and most importantly Barack Obama think they serve? The answer should be, "The People". While Obama & Co. pay lipservice to this, and while they may actually believe they are first and foremost concerned with the commoners, I get very little sense that this is their real concern.

With Bush, Cheney, Yoo, Addington, Rice, and the gang of war criminals, there was little doubt. They stopped just shy of expressly rejecting democratic principles. The rejection of democracy seems today to be the defining characteristic of the Republican party. The election, if it can be called that, of 2000. The rerun in 2004 (with Ohio the focal point of malfeasance). Rudolf Giuliani's abortive attempt to suspend elections following 9/11. Michael Bloomberg's end-run around the unambiguous will of New Yorkers.

Democracy be damned. That is the mantra of the Republican party.

But Democrats? Well, the road to hell is paved with good intentions, and it is far from clear that their intentions are even all that good.

What if the solution is nationalization? On what grounds then, is nationalization pre-emptively excluded by Obama? It is at least plausible that the explanation is that the real power in the US rejects nationalization — the rich, the oligarchs, who would actually lose, for a change — in the event banks were seized.

What work does the rigid opposition to nationalization do? Whom does it serve? The owners, of course. Nationalization would eliminate any question of We the People being hosed by the John Thains, Ken Lewises, and so on (and on and on) — the legion of billionaires who have spent decades lining their pockets at our expense.

Similarly, nationalization of the health care system would benefit We the People at the expense of the managers and stockholders of multi-billion dollar insurance companies. And so single payer healthcare or national health, adopted around the world, remains forbidden territory in the US.

Whatever the best solution to these problems and others, we can be certain of one thing: If economics is a science, then what we are seeing is not economics, but dogma.

Science cannot proceed by ruling out in advance solutions the researchers (or the funders) don't like. "Solve the problem of what orbits what, but you cannot consider any answer where the Earth is not at the center of the universe." Sound scientific?

That is the approach the Obama administration and all of the US government is now taking. It as close as we might see to a textbook example of dogma driving decisions. Dogma and the veiled threats of Wall Street and corporate executives.

Since the question is no longer, "What will be best for the US economy?" (It has been replaced by, "What will be best for the wealthiest of the wealthy?") The big question now is, "Can the threshold level of contentment be maintained?" As John Kenneth Galbraith wrote years ago in The Culture of Contentment, the great innovation of the New Deal years was to establish for Americans a level of well-being that kept people content. Can this contentment be preserved, or has the US proceeded so far along the road to true Oligarchy that the commonwealth can be ignored in the service of privilege and wealth?

No comments: