Strange times. Awash in Obama-mania, the leftist political opposition spins an imperialist foreign policy and corporate-friendly domestic policies into the second-coming of FDR. Leave it to the Murdoch-owned Wall Street Journal (Why No Outrage, 7-19/20-2008) to point out the complacency of the opposition and its standard-bearers concerning recent corporate pillage. “Through history, outrageous financial behavior has been met with outrage. But today Wall Street’s damaging recklessness has been met with near silence, from a too-tolerant populace…” writes James Grant. “Have the stewards of other people’s money not made a hash of high finance? Did they not enrich themselves in boom times, only to pass the cup to us, the taxpayers, in the bust? Where is the people’s wrath?”
While the anti-Bush forces counsel faith in the Democratic Party messiah and pre-election patience, a voice from high in the corporate hierarchy aches for the swift sword of the people’s wrath to sever the heads of the financial pirates and their government lackeys. Strange times, indeed. Grant goes on:
Barack Obama, the silver-tongued herald of change, forgettably told a crowd in Madison, Wis., some months back, that he will “listen to Main Street, not just Wall Street.” John McCain, the angrier of the two presumptive Presidential contenders, has staked out a principled position against greed and obscene profits but has gone no further to call the errant bankers and brokers to account.
The jost blistering attack on the ancient target of American populism was served up last October by the then President of the Federal Reserve Bank of St. Louis, William Poole “We are going to take it out of the hides of Wall Street,” muttered Mr. Poole into an open microphone, apparently much to his own chagrin.
If by “we,” Mr. Poole meant his employer, he was off the mark, for the Fed has burnished Wall Street’s hide more than it has skinned it… One might infer from the lack of popular anger that the credit crisis was God’s fault rather than the doing of the bankers and the rating agencies and the government’s snoozing watchdogs.
Overlooking Grant’s quaint deification of McCain as people’s advocate, he strikes a resonant chord. There has been much admonishing by elected and would-be elected officials, but little punishing. It is as though we sit at table before an insatiable glutton; watch him devour an enormous meal; and when the check comes, our Democratic Party companion chides the piggish guest and passes the check to us.
One has only to regard the huffing and puffing of one of the Democratic Party’s leading “progressives,” Representative Barney Frank, head of the House Financial Services Committee, who spares no vitriol aimed at the “reckless deregulation that led to the subprime crisis and the neglect of affordable housing that has marked Republican rule in Congress.” Despite his rhetorical ire, he engineered a House bill, HR 3221, which in the words of Representative Richard E. Neal, chairman of the Ways and Means Sub-Committee on Select Revenue Measures, is “an appropriate mix of incentives for home purchasers, owners, and renters, for builders, developers, and lenders. Quite simply, they help the housing and real estate industry re-gain their (sic) footing.” Note that the measure bails out an industry and only incidentally the victims of Wall Street greed. To follow Grant’s analogy, the cost of this bill comes not from the hide of Wall Street, but from the taxpayer’s wallet. The principle beneficiaries of HR 3221 will be government guaranteed, but privately owned mortgage giants, Freddie Mac and Fannie Mac. While Frank does not suggest that the mortgage crisis is “God’s fault,” he does blame those damn Republicans rather than the wholesale exploitation of mortgagees by investors and management.
Given that Fannie Mae spent its first thirty years since its creation during the Roosevelt administration as a public agency successfully providing secure mortgages for homeowners, one might think that restoring public ownership – nationalizing Fannie Mae and Freddie Mac – might appear on the policy table. Surely if the public must guarantee the losses and assume the risks from the faltering of these financial giants, the public should hold stakes and assume control as well. Should we entrust nearly half of all US mortgages – valued at nearly 6 trillion dollars – to the same irresponsible management and rapacious investors who left Fannie and Freddie hanging by a thread?
Yet policy-makers and pundits can neither imagine nor engage such a solution. Instead, they offer oversight and regulation, as though the excesses of financial capital were somehow hidden before. Clearly, regulation is ineffective if the regulators lack the will to rein in these excesses. Have they not noticed that wealth was growing more and more concentrated while working people were growing poorer and less secure?
James Grant fails to properly identify the problem. There is outrage in the US: for the first time since the mid-seventies, more people have “hardly any confidence” than have “a great deal of confidence” in major corporations (WSJ/National Opinion Research Center). There is, however, a shortage of leadership for this outrage. Elected officials of both corporate parties are wedded to these same major corporations that are rapidly losing the confidence of the citizenry. Their answer to this outrage is more corporate welfare and the promise of better oversight.
These points do not gainsay the idea that the defeat of McCain is the preferable outcome in this year’s struggle between the two parties of monopoly capital. Obama would be better than McCain because significant differences exist in the policies each is likely to follow, and, perhaps more importantly, in the mass base of the two corporate parties. Of course, one should not lose sight of the fact that, if one looks at actual policy and not campaign rhetoric, since 1991 the long-run trend is for the differences between the two corporate parties to narrow. But if Obama is better than McCain, it is also true that Cynthia McKinney and Ralph Nader would be far better than Obama. We must heed Lenin who insisted that revolutionaries have a duty take advantage of tactical differences in the ruling class. We must also heed Marx and Engels who proclaimed in the Communist Manifesto that revolutionaries support every reform that makes life better for the working class, but Communists distinguish themselves from all others by also upholding in every partial struggle the long-term interest of the working class in a new social order – socialism. In our time, those injunctions mean the task of the real left is to struggle unceasingly to break out of the two-party system and to offer real analysis, radical solutions, and a socialist vision.
In 2008, as opposition from much of the US left is swept up in the lemming-like love fest with the Obama campaign, we face a critical question: Do we connect with the growing outrage at economic inequality and corporate greed, offering class-based, radical solutions? Or, do we tail the Democrats with their Save-the-Corporations tactic of bailing out the greedy? Sadly, many progressives are only too willing to put aside the basic interests of the working class for a shallow message of hope, further marginalizing the influence of the left.