If the government is going to give billions, even trillions of our tax dollars to the banks, we should own them. Nationalize the banks.
When progressive Democrats say this, what they usually mean is that the government should take over the large investment banks and bank holding companies which have been the recipients of tax-funded government bailouts — Citigroup and Bank of America, for example — restructure them, and then continue to operate them in the public interest, either through direct ownership of a majority stake in each company’s equity, or after repatriating them at a fair price to a new, and presumably more responsible group of capitalists, through stringent new regulations, and even government seats on their Boards of Directors. The presumption, of course, is that in recent years these banking conglomerates have been run, and in most cases continue to be run, solely in the interest of the bankers and their shareholders, with little or no regard for the public interest.
Such a plan sounds like a good idea; certainly Stiglitz and Krugman seem to think so, and they know far more about such things than most of us do. The difficulty I have with it is that as far as I can tell, there’s little practical difference these days between the government owning the banks and the banks owning the government.
Strictly speaking, I’m making a political observation here, not an economic one, but consider just one recent event, the defeat of the Durbin Amendment in the Senate last Thursday. This amendment to the Senate Housing Bill (S.891) would have brought the bill into conformity with a bill passed earlier by the House by allowing homeowners facing foreclosure on their homes to seek a court-administered adjustment of both the interest and the outstanding principal on their loans. Among the most significant of the groups lobbying against the amendment was the Mortage Bankers Association, which celebrated its victory in this widely linked video:
Consider also that one of the members of the board of the association is an executive of Chase Bank, a division of JP Morgan-Chase, and another is an executive of Wells Fargo Bank, each of which received a federal bailout package of $25 billion dollars. Finally, consider that one of the reasons given by the association for its opposition to the amendment was that it would create a moral hazard, meaning that it would encourage people in the future to buy houses that they couldn’t afford, and legally burden their mortgage bankers with the loss when they were unable to make their payments.
Frankly, when offered by an industry whose practices in the past decade came very close to destroying the entire global economy, this doesn’t even pass the smell test. Bankers who overindulged in risk, were salvaged by billions of dollars of tax-supported cash infusions, and then spent millions of those dollars lobbying senators to defeat a bill which would have afforded similar relief to ordinary homeowners have an amazing amount of gall, it seems to me, to even think of offering opinions on moral hazard.
Let me be perfectly clear. In talking about the series of events leading up to the defeat of Senator Durbin’s amendment, I’m not arguing guilt by association, take no particular pleasure in bashing what some have called greedy plutocrats, and have no need or desire to rely on some sort of post hoc ergo propter hoc explanation for why the vote went the way it did.
The relationship between bankers, federal bailout money and lobbying — which I’m by no means alone in pointing out — may in fact be purely coincidental. I’m even willing to accept the proposition that these folks genuinely believe that they’re acting in the public interest, despite the obvious appearances to the contrary.
The problem is that, from my perspective, there’s no public in their version of the public interest, there’s just them and the people they know and do business with — those who, in a more combative time, we might have called their class — and outside that familiar circle, they see only an undifferentiated and faceless mass which includes most of the rest of us. In other words, our needs, let alone our opinions, aren’t a part of the public interest which anyone in their position is obliged to take seriously.
More to the point, we have no way at present — absolutely no way — of making them do otherwise. The idea of democracy, that there’s some sort of virtuous path between the will of the people and the actions of its putative representatives, has no force in a society which treats money as the legal equivalent of speech. If anything has become obvious in the United States since the end of WWII, it’s the fact that money is now the only effective form of political speech.
We listen to candidates tell us what we want to hear, we vote for them, and then when they get to our state capitals, or to Washington, they do what people with money tell them to do. To be fair, if they refuse, if they take a broader view of the public interest, the people with money won’t provide them with the means to speak to us come the next election, and in our era, they literally have no other way to speak to us without it.
There’s plenty of blame to go around for this, but in the end, most of it is ours to shoulder. Fundamentally, this is, as I’ve already said, more a political burden than an economic one, one which we’ll eventually have to accept no matter what we make of the economic vices and virtues of global capitalism and the corporate state. Those vices and virtues are real enough, and will, I hope, provide an interesting subject for more than one future post.
This would never have happened in a true republic but then damn few Americans possess true republican virtues.
If history is anything to go by, republican virtues are fleeting. What interests me more, and makes me more a social democrat than a Roman, is the difficulty of maintaining a stable and reasonably equitable society when most people either find republican virtues inconvenient, or are systematically shut out of any forum in which they might be exercised. A good many of us are working two jobs to get by, often for employers who believe we’re criminals and act accordingly, and our magnificently free press is hip-deep in missing white women, Islamofascists and Viagra ads.
We’ve have our jobs cut out for us even if we were made of sterner stuff.
Commerce in general is not a “true republican virtue”. The mere fact that business is now taught in the academy is antithetical to republican ideals. That might be a bit extreme but it echoes another pair of Bierce’s “definitions”.
ACADEME, n.
An ancient school where morality and philosophy were taught.
ACADEMY, n.
[from ACADEME] A modern school where football is taught.
I’m reading Conor Cruise O’Brien’s “The Long Affair”.
Any book termed “deplorable” by these morons has to be worth reading.
http://mises.org/misesreview_detail.aspx?control=27
Excerpt in The Atlantic
http://www.theatlantic.com/issues/96oct/obrien/obrien.htm
Frankly, I don’t find Jefferson all that complicated, or rather the arc of his political thought is familiar enough to seem unexceptional. No matter what part of his career you fasten on as a historian, it’s always seemed to me that the waxing and waning of his bias toward liberty never quite banished his true affection for it. Nor mine, I should add, which is probably why I’ve always preferred him to Adams. Like Jefferson, I’ve always feared the moribund more than the chaotic, even though the folks who love smashing crockery or cutting off heads for the sheer pleasure of the transgression involved have always put me off.
I guess when confronted with libertarian quoters of his tree of liberty comment I would say something like God save us from idolatry. That’s what I really have against libertarians; they can’t seem to grasp the difference between a metaphor and what you do with a hammer and saw, between principle and politics. They need to get outdoors more, as Jefferson surely did, no matter his private passions.
I’d argue for a more conflicted Jefferson. I would also expect him to be the radical and/or progressive in almost any era, but not necessarily doctrinaire. I think he was a pessimist when it comes to human nature and one has to understand that “visionary thinking” tended to get you burned at the stake in Jefferson’s not too distant past. I believe O’Brien intentionally downplays the possibility that Jefferson’s assertion about blacks and whites not being able to live together, may have reflected on whites as well as blacks. Jefferson, I’m sure, thought of himself as a radical. He was a revolutionar in every sense of the word. I think history has proved him correct in the short run and we can hope it will make a liar out of him in the long run. There I go sounding like a timid incrementalist.
Don’t quit now. You are just getting started.
How do we get google to bring up your blog when someone searches Timberman or Dogtown Essay?
Not quitting, working on a longer piece — Hobbes, this time. I imagine Google’s autonomic minions will find the place soon enough, but I don’t see any point in paying to get higher up the page rankings.
That’s ’cause the whole enterprise is a) reluctant, b) as the subtitle says, a series of meditations, mostly private in nature, so propping up the soapbox really isn’t essential, and c) given my age and infirmities, more leisurely than, say, Atrios or Digby. Besides, I don’t gotta make a living at it, do I?
I do hope that in time, at least a few people will stumble across it and find it worth reading — direct argument is a good reality check. In the world of a billion blogs, though, what are the chances of that unless I hire a calliope?
Finally, yeah, your view of Jefferson comports pretty well with mine. Some of my friends back in the day were a lot like him, which is probably why I find him so simpatico.
I think what you really want is Technorati. It is the big search engine that rates blogs.
I see I missed the grand opening.
LWM, it’s nice to cross paths with you again.
Google will offer up a link easily enough if I place Canecittà in the search window. And, will even translate it as dog town if I separate it into cane città.
Perhaps, WT, you might indicate how much notoriety you’d like. I caught an early reference to the notion you were thinking about it, but it was an oblique reference to feeding a maw at cocktailhag’s place that prompted me to click on your link.
I suspect your ruminations will be above my intellectual pay grade, but if you don’t mind my lurking in the background and following along I’ll keep this bookmark handy.
Best wishes on your meditative endeavor!
bystander and I were just exchanging notes on how/when you began this blog, and I see she posted while I was dithering away…
Probably most of what happens here will be above my intellectual pay grade, too, but I’ll try not to make a nuisance of myself.
As for the topic…
…there’s little practical difference these days between the government owning the banks and the banks owning the government.
Sadly true.
In fact, that vote where they shot down the opportunity to help out homeowners facing foreclosure sent me online to do something I’d been thinking about. I changed my registration from Demcratic to Independent.
It was sooooo unseemly, after they had given away billions and billions and billions to the fat cats.
Ooops! My manners…
Hey there, LWM! I’ve wondered where you might be hanging out on the toobz.
Bystander, Karen M, welcome, Thanks for dropping by, and thanks for the good advice. It’s always a pleasure to see old friends in new places.
I actually am planning to post more often, and on a wider variety of subjects, but the world being what it is, no sooner did I launch the thing than I was caught up in a round of Democratic Party meetings, and then a long-promised dinner party, which was great fun, but temporarily redirected the priorities from opinionation to vegetable chopping and pot-walloping.
I’m in it for the long haul, though, and the door will always be open.
What you really need to do, William, is get at least one other writer to pick up the slack, or occasionally a guest poster. Far be it from me to suggest myself – and in case you were wondering, my answer is still the same as it was to Ralph’s inquiry. No offense, but I’m far too busy these days with all my sockpuppets at blogs all over the blogosphere.
Give it time and in a year or so a suitable regular commenter – which you will attract – will present themselves.
Patience. These really are meditations, which means that I don’t know what I think until I go through the process of thinking it. Ted Turner has turned us all into entertainers, or tried to. I’m doing my best to ignore his baleful influence.
I’m also an amateur. I’ve got more time on my hands than people who have to work for a living, true, but deadlines don’t mean much to me, except for the deadline implied by that gaunt figure in the corner with the scythe. He always has the last word, no matter our aspirations.
As for others taking up the slack, well…. That seems iffy, doesn’t it? I’m all for letting a hundred flowers bloom, but not necessarily all in the same place. A poor thing, but mine own appeals to me — more than it should, I suppose, but after 30-some years of wage slavery, I figure I’m entitled.
WT: I’m thrilled at the prospect of your unadulterated voice, that writerly one that is still missed.
LWM: Sockpuppetry?! You!? I am shocked, shocked! I won’t ask who/where/how… but if you ever decide to start your own blog, please don’t keep it a secret.