Excesses and failures in US companies and financial institutions spur protests in Los Angeles. (Photo: Reuters)
A college friend of mine, after much quaffing from the keg, so to speak, would start singing a faux hymn that began, "We are sliding into sin - whee!"
I've thought of his bleary tune from time to time as we all watched our financial institutions slide from thoughtless, wretched excess into calamity, aided and abetted by deregulation and bailouts, dragging the rest of us along on their speed bump-free ride.
You'd think there would be a modicum of contrition but mostly it has been deny, deny, deny combined with shivers of revulsion as an angry citizenry freely expresses its opinion. Former Clinton SEC chairman Arthur Levitt sniffed to The Wall Street Journal this week, "It has reached extremes of incivility that are intolerable," and on Friday the Journal editorially wrung its hands over "political Torquemadas" who would dare to prosecute Wall Street executives.
See here, you people, the seemingly dumfounded elite ask, why all this hollering? Well, it wasn't only those AIG bonuses that had folks mad as hell. For sure, they triggered the outburst last week. But then came an ABC News report that JPMorgan Chase - recipient of 25 billion in bailout bucks, courtesy of taxpayers - was pressing ahead with plans to spend $138 million dollars on two new corporate jets and a place to park them - a state of the art hangar with a "vegetated roof garden." Presumably, bank executives will use the vegetation to hide behind when the mob arrives with tar and feathers.
And speaking of greenery, Wednesday's New York Times reported that last year 25 top hedge fund managers harvested salaries totaling 11.6 billion dollars. That's an awful lot of lettuce in these hungry times, especially when, as the Times calculates, hedge funds have lost an average 18 percent of their value.
By Thursday, Treasury Secretary Geithner was talking tough to Congress. He called for a vast expansion of government authority, promising to crack down on Wall Street's reckless behavior, including the murky markets of hedge funds and derivatives. He proposed "comprehensive reform - not modest repairs at the margin, but new rules of the game."
But veteran Washington journalist William Greider, who has covered government, politics and the economy for four decades, fears that what Geithner and the Obama administration are proposing may not create reform but simply perpetuate more of the same, and even lead to the creation of what he calls "a corporate state… a rather small but very powerful circle of financial institutions... Yes, watched closely by the Federal Reserve and others in government, but also protected by them. And that's a really insidious departure."
He expressed his concern to my colleague Bill Moyers in an interview for the current edition of Bill Moyers Journal on PBS. Greider agrees with most experts that the Geithner plan will end up placing reform in the hands of the Federal Reserve Board.
Twenty years ago, Greider wrote Secrets of the Temple: How the Federal Reserve Runs the Country, still considered the definitive account of the government bank. "One of the attractive qualities about the Fed is that it is this black box of technocratic expertise," he told Moyers. "And it knows things the rest of us don't know. And it's very expert at what it does… But it's a political institution. It makes public decisions for the rest of us. So to pretend that it's above all that is nonsense from the beginning...
"They couldn't stop deregulation," he continued. "In fact, they supported it, because they knew their major constituencies in finance and banking were all very much for it... So to tell them now 'Wouldn't you like to just admit your mistake and put back some of the collateral lending functions into your control?' I don't trust them to do that."
What we ought to be seeking, Greider believes, "is creating a new financial and banking system, of many more, thousands more, smaller, more diverse, regionally dispersed banks and investment firms. The first obligation is to serve the economy and serve society. Not the other way around."
As for President Obama, "I understand his political dilemma. And I sympathize with it. But he's trying to govern by convincing people that we will be able to get the old good times back. And my view is that the good times ain't comin' back. For lots of reasons- including the ecological crisis and global warming and the weakness of our economy. This is the hard part. The sooner the country comes to terms with that, acknowledges it as fact, not just fear, then we can start this great era of reform and revitalizing the country and society."
In his new book, Come Home, America: The Rise and Fall (and Redeeming Promise) of Our Country, William Greider sees the public's anger as good news for the country - "America the Possible," he calls it.
"We're at a break point in our history," he said. "And it's not just the financial system, although that's front and center. It's the deteriorated economy, it's militarism looking out in the world, trying to find the next war. It's a lot of things coming at us, all at once. I believe, on the other side of all of these adversities, we can become a better country.
But to make that happen, Greider thinks, "People at large, I don't care whether they're middle class or upper class or working poor or union, non-union, have to find ways to come together themselves, perhaps in very small groups at first, and talk about their own stuff. Their experiences, their ideas their convictions, their aspirations for the country, themselves, their families, and then broaden out a bit, laterally. And have more people in the discussion. They don't have to become a giant organization, but they have to convince themselves that they're citizens…
"That's kind of the mystery of democracy. People get power if they believe they're entitled to power."