Thursday, August 12, 2010

Dumbya the Hero-King, Reich Roused, Rayguns Outed By His Boy, BP CoverUp, How Future Economists Will View Today’s Leaders?

History teaches many things (or for some people, nothing). One of the things it can impart is where a path of blood leads. And, no, not to good things ultimately. I've been delving into at odd times the brand new book on The Tudors (The Complete Story of England's Most Notorious Dynasty), which has some real eye openers on the legacy of Henry VIII and Elizabeth I of England. You think any eye opening is going on now?

One thought constantly reoccurs as I read about the life and reign of King Henry VIII of England: he was the model for George W. Bush. I kid you not. You may think I'm making too much of the obvious parallels, but we do know that he read the easy history books and I'll lay odds that he knew quite a bit about Henry.

He (no, I'm not just talking about Dumbya) didn't think he needed to read documents (he just wanted the important parts read aloud to him by his advisors), he refused to think about how he was impoverishing the people of his kingdom, he presided over the further enrichment of nobles who had served his father (although eventually getting rid of or even executing many of them coldly when they no longer served his purposes), and he had "an almost desperate hunger for glory. He wanted to become a hero-king, a conqueror, a great romantic figure . . . " but with absolutely no desire to do any of the fighting entailed himself.

The Tudors ruled England for only three generations, an almost pathetically brief span of time in comparison with other dynasties before and since. During the 118 years of Tudor rule, England was a less weighty factor in European politics than it had been earlier, and nothing like the world powe it would later become. . . . Theirs was . . . a melancholy story. It is impossible not to suspect that even the founder . . . the only Tudor whose reign was both long and mostly peaceful and did not divide the people of England against themselves . . . would have been appalled to see where his descendants took his kingdom and how their story ended.

. . . They have become not merely famous but posthumous stars in the 21st-century firmament of celebrity: on the big and little screens and in popular fictions their names have become synonymous with greatness, with glory. This is not the fate one might have expected for a pair whose characters were dominated by cold and ruthless egotism, whose careers were studded with acts of atrocious cruelty and false dealing, and who were never more than stonily indifferent to the well-being of the people they ruled.

. . . both Henry and his daughter Elizabeth were not just rulers but consummate performers, masters of political propaganda and political theater. They created, and spent their lives hiding inside, fictional versions of themselves that never bore more than a severely limited relation to reality but were nevertheless successfully imprinted on the collective imagination of their own time. These invented personas have endured into the modern world not only because of their inherent appeal - it is hard to resist the image of bluff King Hal, of Gloriana the Virgin Queen - but even more because of their political usefulness across the generations.

Henry, in the process of forcing upon England a revolution-from-above that few of its people welcomed, created a new elite that his radical redistribution of the national wealth made so rich and powerful so quickly that within a few generations it would prove capable of overthrowing the Crown itself. No longer needing or willing to tolerate a monarchy as overbearing as the Tudors had been at their zenith, that new elite nevertheless continued to need the idea of the Tudors, of the wonders of the Tudor revolution, in order to justify its own privileged position.

It needed to make the mass of English men and women see the Tudor century as the supreme forward leap in England's history, a sweeping away of the dark legacy of the Middle Ages. (This whole "Whig" view of history requires a smug certainty that the medieval world was a cesspit of superstition and repression.) It demanded agreement that the Tudors had put England on the high road to greatness and that to say otherwise was to be not only extravagently foolish or dishonest but actually unfit for participation in public life. Centuries of relentless indoctrination and denial ensued, with the result that England turned into a rather curious phenomenon: a great nation actively contemptuous of much of its own history. One still sees the evidence almost whenever British television attempts to deal with pre-Tudor and Tudor history.

Robert Reich has gotten particularly irate lately. And well he may.

Meanwhile, the rich have been getting a larger and larger portion of total income. From 9 percent in 1980, the top 1 percent's take has increased to 23.5 percent in 2007. CEOs who in the 1970s took home 40 times the compensation of average workers now rake in 350 times. Financiers who forty years ago made only modest fortunes today, even after the Great Recession they helped bring on, routinely earn seven and eight-figures. In 2009, when most of the nation's middle class was deep in recession, the 25 best-paid hedge-fund managers took in an average of $1 billion each. (Their marginal income tax, by the way, was barely over 17 percent, while the typical family paid a marginal tax far higher.)

What happened? It wasn't just greed. It was also the systematic and ever cleverer manipulation of laws and rules by those able to pay lobbyists, legislators, lawyers, accountants to do their bidding. As income and wealth have risen to the top, so has the power to manipulate the system in order to acquire even more money and more influence.

To be sure, globalization and technological change have bestowed gains disproportionately on those with the education and connections to benefit most from them, while burdening Americans without the education and connections most needed.

But instead of enlarging the circle of prosperity so that the vast middle class could come out winners as well - instead of strengthening trade unions, improving public education, deepening public investments, enlarging safety nets, and making the tax system more progressive - the nation took direction from those at the top, and did the opposite.

I'm thinking more Dumbya criticism and not his Dem enablers (as Reich was a Clinton Dem advisor before they became the Dims).

One of the things I always notice about this ruling crowd is that nothing gets in their way. If politicians are too much trouble, they die mysteriously - in plane crashes or stroke out unexpectedly - and if events occur that should really focus the public's mind on the nefarious dark world in real control of their lives, they just release propaganda to minimize the permanent effects of such and lay down their own self-serving version of an alternate history. They remove the evidence as quickly as possible (remember how rapidly the 9/11 debris was shipped to China?), ban independent coverage of the scene, and dominate the airwaves with happy talk.

And it works.


I'm just hoping that this isn't just one more "limited hang-out" apology in order to limit the Rethug damage. David Stockwell unloads on his "friendlies." And finally! It's always good to get the inside word on the thugs who started your country down the path to ruin so many years ago. If you remember the sober, very conservative voice of Paul Farrell from Lou Rukeyser's Friday Night show, you will understand a little bit better how the fascade is falling, and the rats are taking cover. And the old rats are also taking offense - oh - and it's all Milton Friedman's and Nixon's fault - HA! And those baaaddd Dims weren't just going along with Dumbya's "leadership," they actually were leading? And though, Dumbya was in charge and his backers were enriched, the ones who need the Social Security payout must continue to pay in and save the day. I remember asking years ago when I saw this coming, where are they going to go when the shit hits the fan (and how, oh how, will they explain it all away)? I'm guessing Stockman just figured out he didn't want to move. (Emphasis marks added - Ed.)

Aug. 10, 2010, 12:45 a.m. EDT Reagan Insider: 'GOP Destroyed U.S. Economy' By Paul B. Farrell

MarketWatch ARROYO GRANDE, Calif. (MarketWatch) - "How my G.O.P. destroyed the U.S. economy." Yes, that is exactly what David Stockman, President Ronald Reagan's director of the Office of Management and Budget, wrote in a recent New York Times op-ed piece, "Four Deformations of the Apocalypse." Get it? Not "destroying." The GOP has already "destroyed" the U.S. economy, setting up an "American Apocalypse."

Yes, Stockman is equally damning of the Democrats' Keynesian policies. But what this indictment by a party insider -- someone so close to the development of the Reaganomics ideology -- says about America, helps all of us better understand how America's toxic partisan-politics "holy war" is destroying not just the economy and capitalism, but the America dream. And unless this war stops soon, both parties will succeed in their collective death wish.

But why focus on Stockman's message? It's already lost in the 24/7 news cycle. Why? We need some introspection. Ask yourself: How did the great nation of America lose its moral compass and drift so far off course, to where our very survival is threatened?

We've arrived at a historic turning point as a nation that no longer needs outside enemies to destroy us, we are committing suicide. Democracy. Capitalism. The American dream. All dying. Why? Because of the economic decisions of the GOP the past 40 years, says this leading Reagan Republican.

Please listen with an open mind, no matter your party affiliation: This makes for a powerful history lesson, because it exposes how both parties are responsible for destroying the U.S. economy. Listen closely:

Reagan Republican: the GOP should file for bankruptcy

Stockman rushes into the ring swinging like a boxer:

"If there were such a thing as Chapter 11 for politicians, the Republican push to extend the unaffordable Bush tax cuts would amount to a bankruptcy filing. The nation's public debt ... will soon reach $18 trillion." It screams "out for austerity and sacrifice." But instead, the GOP insists "that the nation's wealthiest taxpayers be spared even a three-percentage-point rate increase."

In the past 40 years Republican ideology has gone from solid principles to hype and slogans. Stockman says: "Republicans used to believe that prosperity depended upon the regular balancing of accounts - in government, in international trade, on the ledgers of central banks and in the financial affairs of private households and businesses too."

No more. Today there's a "new catechism" that's "little more than money printing and deficit finance, vulgar Keynesianism robed in the ideological vestments of the prosperous classes" making a mockery of GOP ideals. Worse, it has resulted in "serial financial bubbles and Wall Street depredations that have crippled our economy." Yes, GOP ideals backfired, crippling our economy.

Stockman's indictment warns that the Republican party's "new policy doctrines have caused four great deformations of the national economy, and modern Republicans have turned a blind eye to each one:"

Stage 1. Nixon irresponsible, dumps gold, U.S starts spending binge

Richard Nixon's gold policies get Stockman's first assault, for defaulting "on American obligations under the 1944 Bretton Woods agreement to balance our accounts with the world." So for the past 40 years, America's been living "beyond our means as a nation" on "borrowed prosperity on an epic scale ... an outcome that Milton Friedman said could never happen when, in 1971, he persuaded President Nixon to unleash on the world paper dollars no longer redeemable in gold or other fixed monetary reserves."

Remember Friedman: "Just let the free market set currency exchange rates, he said, and trade deficits will self-correct." Friedman was wrong by trillions. And unfortunately "once relieved of the discipline of defending a fixed value for their currencies, politicians the world over were free to cheapen their money and disregard their neighbors."

And without discipline America was also encouraging "global monetary chaos as foreign central banks run their own printing presses at ever faster speeds to sop up the tidal wave of dollars coming from the Federal Reserve." Yes, the road to the coming apocalypse began with a Republican president listening to a misguided Nobel economist's advice.

Stage 2. Crushing debts from domestic excesses, war mongering

Stockman says "the second unhappy change in the American economy has been the extraordinary growth of our public debt. In 1970 it was just 40% of gross domestic product, or about $425 billion. When it reaches $18 trillion, it will be 40 times greater than in 1970." Who's to blame? Not big-spending Dems, says Stockman, but "from the Republican Party's embrace, about three decades ago, of the insidious doctrine that deficits don't matter if they result from tax cuts."

Back "in 1981, traditional Republicans supported tax cuts," but Stockman makes clear, they had to be "matched by spending cuts, to offset the way inflation was pushing many taxpayers into higher brackets and to spur investment. The Reagan administration's hastily prepared fiscal blueprint, however, was no match for the primordial forces -- the welfare state and the warfare state - that drive the federal spending machine."

OK, stop a minute. As you absorb Stockman's indictment of how his Republican party has "destroyed the U.S. economy," you're probably asking yourself why anyone should believe a traitor to the Reagan legacy. I believe party affiliation is irrelevant here. This is a crucial subject that must be explored because it further exposes a dangerous historical trend where politics is so partisan it's having huge negative consequences.

Yes, the GOP does have a welfare-warfare state: Stockman says "the neocons were pushing the military budget skyward. And the Republicans on Capitol Hill who were supposed to cut spending, exempted from the knife most of the domestic budget - entitlements, farm subsidies, education, water projects. But in the end it was a new cadre of ideological tax-cutters who killed the Republicans' fiscal religion."

When Fed chief Paul Volcker "crushed inflation" in the '80s we got a "solid economic rebound." But then "the new tax-cutters not only claimed victory for their supply-side strategy but hooked Republicans for good on the delusion that the economy will outgrow the deficit if plied with enough tax cuts." By 2009, they "reduced federal revenues to 15% of gross domestic product," lowest since the 1940s. Still today they're irrationally demanding an extension of those "unaffordable Bush tax cuts [that] would amount to a bankruptcy filing."

Recently Bush made matters far worse by "rarely vetoing a budget bill and engaging in two unfinanced foreign military adventures." Bush also gave in "on domestic spending cuts, signing into law $420 billion in nondefense appropriations, a 65% percent gain from the $260 billion he had inherited eight years earlier. Republicans thus joined the Democrats in a shameless embrace of a free-lunch fiscal policy." Takes two to tango.

Stage 3. Wall Street's deadly 'vast, unproductive expansion'

Stockman continues pounding away: "The third ominous change in the American economy has been the vast, unproductive expansion of our financial sector." He warns that "Republicans have been oblivious to the grave danger of flooding financial markets with freely printed money and, at the same time, removing traditional restrictions on leverage and speculation." Wrong, not oblivious. Self-interested Republican loyalists like Paulson, Bernanke and Geithner knew exactly what they were doing.

They wanted the economy, markets and the government to be under the absolute control of Wall Street's too-greedy-to-fail banks. They conned Congress and the Fed into bailing out an estimated $23.7 trillion debt.

Worse, they have since destroyed meaningful financial reforms. So Wall Street is now back to business as usual blowing another bigger bubble/bust cycle that will culminate in the coming "American Apocalypse."

Stockman refers to Wall Street's surviving banks as "wards of the state." Wrong, the opposite is true. Wall Street now controls Washington, and its "unproductive" trading is "extracting billions from the economy with a lot of pointless speculation in stocks, bonds, commodities and derivatives." Wall Street banks like Goldman were virtually bankrupt, would have never survived without government-guaranteed deposits and "virtually free money from the Fed's discount window to cover their bad bets."

Stage 4. New American Revolution class-warfare coming soon

Finally, thanks to Republican policies that let us "live beyond our means for decades by borrowing heavily from abroad, we have steadily sent jobs and production offshore," while at home "high-value jobs in goods production ... trade, transportation, information technology and the professions shrunk by 12% to 68 million from 77 million."

As the apocalypse draws near, Stockman sees a class-rebellion, a new revolution, a war against greed and the wealthy. Soon. The trigger will be the growing gap between economic classes:

No wonder "that during the last bubble (from 2002 to 2006) the top 1% of Americans - paid mainly from the Wall Street casino - received two-thirds of the gain in national income, while the bottom 90% - mainly dependent on Main Street's shrinking economy - got only 12%. This growing wealth gap is not the market's fault. It's the decaying fruit of bad economic policy."

Get it? The decaying fruit of the GOP's bad economic policies is destroying our economy.

Warning: this black swan won't be pretty, will shock, soon

His bottom line: "The day of national reckoning has arrived. We will not have a conventional business recovery now, but rather a long hangover of debt liquidation and downsizing ... it's a pity that the modern Republican party offers the American people an irrelevant platform of recycled Keynesianism when the old approach - balanced budgets, sound money and financial discipline - is needed more than ever."

Wrong: There are far bigger things to "pity."

First, that most Americans, 300 million, are helpless, will do nothing, sit in the bleachers passively watching this deadly partisan game like it's just another TV reality show.

Second, that, unfortunately, politicians are so deep-in-the-pockets of the Wall Street conspiracy that controls Washington they are helpless and blind.

And third, there's a depressing sense that Stockman will be dismissed as a traitor, his message lost in the 24/7 news cycle ... until the final apocalyptic event, an unpredictable black swan triggers another, bigger global meltdown, followed by a long Great Depression II and a historic class war.

So be prepared, it will hit soon, when you least expect.

They are out in force. Lying without a pause to US and the rest of the world.

BP's Insidious Coverup and Propaganda Campaign: Out of Sight, Out of Mind by Dahr Jamail

Global Research, August 9, 2010

Since BP announced that CEO Tony Hayward would receive a multi-million dollar golden parachute and be replaced by Bob Dudley, we have witnessed an incredibly broad, and powerful, propaganda campaign. A campaign that peaked this week with the US government, clearly acting in BP’s best interests, itself announcing, via outlets willing to allow themselves to be used to transfer the propaganda, like the New York Times, this message:

“The government is expected to announce on Wednesday that three-quarters of the oil from the Deepwater Horizon leak has already evaporated, dispersed, been captured or otherwise eliminated — and that much of the rest is so diluted that it does not seem to pose much additional risk of harm.”

The Times was accommodating enough to lead the story with a nice photo of a fishing boat motoring across clean water with several birds in the foreground. This message was disseminated far and wide, via other mainstream media outlets like the AP and Reuters, effectively announcing to the masses that despite the Gulf of Mexico suffering the largest marine oil disaster in US history, most of the oil was simply “gone.” Thus, it’s only what is on the surface that counts. If you can’t see it, there is not a problem. This kind of government cover-up is nothing new, of course. “It is well known that after the Chernobyl accident, the Soviet government immediately did everything possible to conceal the fact of the accident and its consequences for the population and the environment: it issued “top secret” instructions to classify all data on the accident, especially as regards the health of the affected population,” journalist Alla Yaroshinskaya has written. In 1990 Yaroshinskaya came across documents about the Chernobyl nuclear catastrophe that revealed a massive state cover-up operation, coupled with a calculated policy of disinformation where the then Soviet Union’s state and party leadership knowingly played down the extent of the contamination and offered a sanitized version to the public, both in and out of Russia. To date, studies continue to show ongoing human and environmental damage from that disaster. When the disaster at Chernobyl occurred, it was only after radiation levels triggered alarms at the Forsmark Nuclear Power Plant in Sweden that the Soviet Union admitted an accident had even occurred. Even then, government authorities immediately began to attempt to conceal the scale of the disaster. Sound familiar? In late April, after the Deepwater Horizon rig exploded and sank into the depths and the Macondo well began gushing oil, BP and the complicit Coast Guard announced no oil was being released.The Gulf Restoration Network flew out to the scene and saw massive amounts of oil and sounded the alarm, which forced BP and the US government to admit there was, indeed, oil. Such has the trend of BP/US Government lying, countered by (sometimes) forced accountability, then to more lying, been set. These most recent, and most blatant of the BP/US Government propaganda gems are easily undermined by countless facts. Reality and truth always, given time, find a way to surface . . . just like BP’s dispersed oil. Two captains of so-called “vessels of opportunity” helping with the cleanup recently told Times-Picayune reporter Bob Marshall that they saw more oil at South Pass on Tuesday than they have during the entire crisis. “I don’t know where everyone else is looking, but if they think there’s no more oil out there, they should take a ride with me,” charter captain Mike Frenette said. Another captain, Don Sutton, saw floating tar balls for 15 miles from South Pass to Southwest Pass. “And that wasn’t all we saw. There were patches of oil in that chocolate mousse stuff, slicks and patches of grass with oil on them,’” he said. Yesterday I spoke with Clint Guidry, a Louisiana fisherman who is on the Board of Directors of the Louisiana Shrimp Association and the Shrimp Harvester Representative on the Louisiana Shrimp Task Force created by Executive Order of Louisiana Gov. Bobby Jindal. “Right now, there is more oil in Barataria Bay than there has been since this whole thing started on April 20,” Guidry told me. BP oil is now turning up under the shells of post-larval blue crabs all across the northern Gulf of Mexico. Nearly all the crab larvae collected to date by researchers, from Grand Isle, Louisiana all the way over to Pensacola, Florida, have oil under their shells. Further analysis is showing that the crabs likely also contain BP’s Corexit dispersant. On August 5th it was reported that a pair of fishermen in Mississippi “made an alarming discovery that has many wondering what’s happening below the surface” of the Gulf of Mexico. They found several full-sized crabs filled with oil. In Hancock County, Mississippi, Brian Adam, the EMA director, reported, “We’re still seeing tar balls everyday, and I’m not talking just a few tar balls. We’re seeing a good amount everyday on the beaches.” . . . The National Oceanic and Atmospheric Administration (NOAA) report from Wednesday claims that 33 percent of BP’s oil in the Gulf has been either burned, skimmed, dispersed, or directly recovered by cleanup operations. NOAA goes on to claim that another 25 percent has evaporated into the atmosphere or dissolved in the water, and another 16 percent has been naturally dispersed. Of the remaining 26 percent, NOAA claims that amount is either washed ashore, been collected from beaches, is buried along the coasts, or is still on or just below the surface. University of South Florida chemical oceanographer David Hollander says these estimates are “ludicrous.” Of the NOAA report, Hollander says, “It’s almost comical.” Other scientists also immediately expressed their doubts of the validity of the NOAA report, whiletoxicologists expect to be busy tracking the effects of BP’s toxic dispersants “for years.” Giant plumes of BP’s sub-surface dispersed oil are floating around the Gulf of Mexico, as confirmed recently by researchers from the University of South Florida. It was also recently revealed that the worst dead zone in 25 years has been recorded in Gulf of Mexico waters. Of course it’s likely a given that this is due to BP’s liberal use of dispersants. . . . “In May, Mother Nature Network blogger Karl Burkart received a tip from an anonymous fisherman-turned-BP contractor in the form of a distressed text message, describing a near-apocalyptic sight near the location of the sunken Deepwater Horizon — fish, dolphins, rays, squid, whales, and thousands of birds – “as far as the eye can see,” dead and dying. According to his statement, which was later confirmed by another report from an individual working in the Gulf, whale carcasses were being shipped to a highly guarded location where they were processed for disposal.”

“Local fisherman in Alabama report sighting tremendous numbers of dolphins, sharks, and fish moving in towards shore as the initial waves of oil and dispersant approached in June. Many third- and fourth-generation fishermen declared emphatically that they had never seen or heard of any similar event in the past. Scores of animals were fleeing the leading edge of toxic dispersant mixed with oil. Those not either caught in the toxic mixture and killed out at sea, or fortunate enough to be out in safe water beyond the Source, died as the water closed in, and they were left no safe harbor. The numbers of birds, fish, turtles, and mammals killed by the use of Corexit will never be known as the evidence strongly suggests that BP worked with the Coast Guard, the Department of Homeland Security, the FAA, private security contractors, and local law enforcement, all of which cooperated to conceal the operations disposing of the animals from the media and the public.”

Cope added, “The Gulf of Mexico from the Source into the shore is a giant kill zone.”

Do we have a future inside of the U.S.? Of course, just not one I want to be a part of anymore. I'm still looking for a good place to go to for the next 10 years. Wallace Turbeville, former and now thoroughly repentent(?) VP of Goldman Sachs, thinks he knows (emphasis marks added - Ed.).

How Will Future Economists View Today’s Leaders?

by Wallace C. Turbeville

Progressives have the opportunity to turn the tides in favor of the middle class, if they only have the guts to grasp it.

When we observe today’s wounded economy, we generally think of the housing bubble that burst in 2007/08 making a shambles of the financial system and precipitating a severe recession.

It is natural to focus on repairing the damage caused by those events, have faith in the resilience of the American people and hope that the system will lead us to prosperity as soon as the natural healing process works its wonders.

How might economic historians in the year 2110 view current events? Their perspective will be much broader. Perhaps it will be obvious in 100 years that the Great Recession was really the logical culmination of 40 years of decline.

Observers in the future might mourn the foolish reliance on totally inadequate remedies because leaders inexplicably failed to understand the depth of the problems. Worse, the urge of conservative ideologues to redistribute wealth to those with the highest incomes through tax and deficit policies might be viewed as the saddest of ironies, since it added fuel to a fire which had smoldered for half a century.

Since 1970, the difference between the richest and poorest Americans has increased, more or less, steadily. Income disparity in the US is no longer comparable to other fully developed nations. It is currently more like Turkey and Russia.

Perhaps economic historians of the future will see that this was an early sign of dangerous forces that were unleashed as the economy moved into a post-industrial epoch. They might mark 1970 as the beginning of an era in which cynicism supplanted faith in the ability of government to redress inequities, a necessary ingredient for broad-based economic growth. They might write about a structural shift toward short term transactional behavior, favoring the rich (who are able to take advantage of it) over the middle class.

After 1970, household incomes rose for 30 years. The rich just got richer faster. This masked the festering problem of income disparity, so political leaders were not incented to act. But in the last decade, household incomes stagnated and declined for everyone except the rich. There is little doubt that 9/11 and the wars in Iraq and Afghanistan burdened the economy and accelerated the decline.

However, the seeds were already planted and growing. Declining household income posed a political problem. Government’s mission is, in part, to facilitate a business and employment environment in which Americans can improve their well-being by working hard and making good decisions. Failing this mission, political leaders faced retribution from middle-income Americans. The tried and true methods and ideologies were inadequate to reverse the decline. And it was nearly impossible to perform radical surgery on the economy, largely because of rising ideological partisanship in political discourse as the internet and cable broadcasting became dominant forms of media.

Future observers may conclude that political leaders cynically chose to mislead middle income people into believing that they were not getting poorer. It was expedient to engineer a housing bubble and simultaneously open up methods for households to extract cash from their homes. That way, middle income voters did not feel the effects of declining wealth. Alan Greenspan’s philosophy of low interest rates notwithstanding, the bubble and deregulation of mortgage lending standards got the job done. Fannie Mae and Freddie Mac were inadequate to fund the new mortgage debt, given their targeted policy goals. So Wall Street was unleashed and encouraged to create vast mortgage-backed debt pools, a bottomless well of funds for “feel good” mortgages.

Credit card debt may also be seen as an opiate. Most people clung to the notion that outstanding balances should not be subtracted from their total wealth. Like addicts who think they could quit at any time, cardholders believed that they would pay off the balance, even when unsupported by objective reality. Exploiting this weakness rather than addressing it, political leaders and regulators allowed financial institutions to run riot in supplying credit card debt. How ironic that the same politicians put drug dealers in jail!

Our futuristic analysts will turn their attention to the wealthiest 1% of Americans. They will see that the enormous increase in the wealth of this group was tied to the absurd growth of the financial services sector, reaching upwards of 40% of the GDP. It will be obvious to them that growth of the financial sector is not a good thing if the rest of the economy (which adds value to goods and services and employs most people) does not grow proportionately. They will be amused that even the democratic Secretary of the Treasury continued to equate innovation in financial products with innovation in manufacturing, energy and software design, even after the economy crashed.

Perhaps they will conclude that American capital ceased being deployed to fuel economic growth during this period. As cynicism rose, government lost the power to intervene on behalf of the less powerful. It will be obvious to our economic historians that enforcement of egalitarian principles is the only way to sustain a growing economy. Unconstrained, the powerful are inclined to seize current advantages, regardless of the risks to the economy as a whole. Rationalization is easy: The future is uncertain, so get what you can today. Individual avaricious behavior cannot materially affect an uncertain future anyway.

It may be clear to future observers that the wealthiest devoted too much of their capital to hedge funds designed to increase existing asset value through derivatives, ride asset bubbles on the way up, and get out before the inevitable collapse. They may see that, if the wealthy had instead invested capital in productive businesses and infrastructure, the system could have been sustained.

The tools used in 2010 to address the array of problems may look ridiculously weak to these observers. They may conclude that leaders tragically ignored the fact that the defects were long-standing and structural, requiring decisive use of strong remedies. Like Dante relegating traitors to the ninth ring of Hell, our economic historians may take a harsh view of conservatives. Reducing the taxes of high income Americans may be seen as an act of venal redistribution of wealth. Under current conditions, it simply increases the wealthiest’s share of a shrinking pie. Recent history should tell us that the rich are unlikely to invest newly available funds so as to grow the economy. Today’s opportunities are meager, and the wealthy get a better deal at hedge funds. The conservative deficit hawks, usually the same people as the high income tax cutters, will look in hindsight like panderers, lying to a fearful public to grasp for votes.

Progressives are unlikely to fare much better. Generally constructive principles will probably be outweighed by a sense that they lacked the courage to make a stand. But progressives are not doomed to bear this epitaph. Like Ebenezer Scrooge, they might benefit from an image of the future. In the future, it will be clear that progressives are in a potentially powerful position. They are on the side of the vast middle class of America that, in truth, has been shortchanged for almost half a century. Future observers will be puzzled by the progressives’ failure to convert this potential into a persuasive political message, instead cowering passively in fear of offending the ghost of Ronald Reagan.

But progressives could be viewed as heroes 100 years from now if they can screw up the fortitude to advocate a real restructuring of the economy — industrial and jobs policies, energy restructuring, further limitations on Wall Street and tax policies favoring the middle class rather than redistribution to the rich.

Make this case, and conservatives will appear to lack faith in American exceptionalism, eager to abandon programs like Social Security instead of relying on the strength of the middle class to bring back growth.

And even if progressives fail, at least their great-grandchildren won’t have to learn in history class that their ancestors lacked the courage to meet the challenge.

Wallace C. Turbeville is the former CEO of VMAC LLC and a former Vice President of Goldman, Sachs & Co.

Certainly making sense now. Suzan __________


Greendayman said...

Hi Suze, This was a rough post to read. Very sad but oh so true. What is it about these conservative economists coming out years after the fact, critical of their OWN EFFING POLICIES now that it is too late to do anything about it. They should have all their wealth taken away and be made to wait in line with 30K people for housing support. And now we have the administration calling out progressives. We are truly near the end. How many dollars left until the revolution?

Hope you are well, we are healing nicely.


Suzan said...

Yes, sweetie,

Take their wealth away! Ha!!!!!!!!!

As if.

I'd like to take their lives away as they have caused the deaths/early deaths of so many others with their short-sighted, greedy policies that it would only be just.

I get the feeling (as you also I'm guessing) that what the latest Obamabot blowup was about was that the Hillary people are coming out of the woodwork to say how much better she would have handled the "situation."

So, while the country goes under, it's a catfight.

Over the power that will be left after the dust settles.

As for me, I'm so over it's not funny. I've got days I think.

Thanks for the wise comments.

Love you,


Short Short Stories said...

Hi there,

Excellent piece on Stockman. We have to remember that the Reagan administration, as well as others, were traitors to America. What went on in the Reagan WH had more to do about saving the Republican Party, keeping it in power, and enriching itself, than what was best for the country.

The fall of this economy was a planned demolition. They accomplished that with the help of many Democrats.

Stockman only came forward when he saw the Bush tax cuts being considered as permanent. The last 12 years kept him held up in his hole.

Hillary would never of done any better than what we seen now. She is a total elitist, and corporate "milkshake drinker".

This entire collapse and the austerity plan that is likely to happen has to be played out before the Kool-Aid, and zombie tv watchers are totally underwater. If the Cons get hold of Congress in November, total gridlock will take down the economy very quickly.

The voices of reason and clarity are diminished by wild neo-con zombies.


Dave Dubya said...

Ah, yes, the times are about recession, depression, and most of all, regression.

The economic elite and their Republican Party want nothing short of neo-feudalism, where they are the lords and the rest of us are serfs.

“Tax the rich. Rebuild America.” They can afford it, and the country needs it.

Suzan said...

Jerry, my memory is still razor sharp concerning the Rayguns' criminal, murderous misadventures with the well-being of middle-class America after their stealing of the election from Jimmy Carter built on their manipulation of the media and the prisoners' well being in Iran.

My guess is that Stockman's purpose in speaking out is way beyond our fathoming as he is NOT playing to our audience. He and his ilk do not give a DAMN about US.

Well, they've won with me, Dave.

I couldn't get much more unemployed or serfish.

Love you all,


The fall of this economy was a planned demolition. They accomplished that with the help of many Democrats.