Saturday, April 11, 2009
Populists and Wall Street
"The short answer, of course, is AIG. Why did the Treasury Department allow the payout of many millions in bonuses to executives of the unit that sank the company? ... This lapse of common sense arises from a deeper problem: the reflexive contempt for populism that is felt by the dominant faction of the Democratic Party--the faction that regards itself as the responsible guardian of financial civilization, and that thinks of populism as crackpot economics and senseless proletarian rage. ... In Washington, where the need to treat government like a business is a no-brainer, thinking about politics in this way--as though it were a matter of branding, entrepreneurship and CEOs--is thought to be highly advanced stuff. But I don't agree. Surely we have learned the hazards of turning business models lose on the state, after all our experiences with the 'MBA president' and his 'market-based' government, all the 'K Street Projects' and 'superlobbyists' of the last 20 years, all the regulatory agencies that understood the regulated as their 'customers,' all the bailouts engineered by friends of the bailed-out, all the faith placed in 'voluntary compliance' on the grounds that business would naturally self-regulate. ... The theme that matters most these days, though, is the DLC's war with populism, a term that is supposed to summarize everything that is wrong with class-based discontent. ... The group's attacks on populism resonate in DC, I suspect, because the commentariat has always thought 'populism' to be faintly ridiculous, a thing of mobs and pitchforks and windbag leaders more demogogue than CEO. ... This way of thinking has not served the Obama administration well in recent weeks. Think of Larry Summers repeating, on program after program, his outrage with the AIG bonuses, but then immediately moving, as you would with a naughty child, into a discussion of the rule of law--which I guess is what you call the years of de facto de-supervision that allowed this disaster. One of these days it may dawn on our leaders that the public, in this case, is right: that this time the mountebanks and charalatans are not the populists but the responsible CEOs who ran the country's financial institutions into the ground--and who the administration apparently wants to leave in charge of those institutions", Thomas Frank at the WSJ, 25 March 2009.
I agree with Frank. POTUS Obama, ready that CNC guillotine and set it to work on Manhattan. It has much work to do.