Democrats In Bed With Corporations

Still think the Democrats are better than the Republicans? They are exactly the same: corrupt corporatists.--jef

Did the White House Direct the Police Crackdown on Occupy?

Documents Show How White House and Democrats Worked to Protect the Banks Against Protests
by DAVE LINDORFF


A new trove of heavily redacted documents provided by the US Department of Homeland Security (DHS) in response to a Freedom of Information Act (FOIA) request filed by the Partnership for Civil Justice Fund (PCJF) on behalf of filmmaker Michael Moore and the National Lawyers Guild makes it increasingly evident that there was and is a nationally coordinated campaign to disrupt and crush the Occupy Movement.

The new documents, which PCJF National Director Mara Verheyden-Hilliard insists “are likely only a subset of responsive materials,” in the possession of federal law enforcement agencies, only “scratch the surface of a mass intelligence network including Fusion Centers, saturated with ‘anti-terrorism’ funding, that mobilizes thousands of local and federal officers and agents to investigate and monitor the social justice movement.”

Nonetheless, blacked-out and limited though they are, she says they offer clues to the extent of the government’s concern about and focus on the wave of occupations that spread across the country beginning with last September’s Occupy Wall Street action in New York City.

The latest documents, reveal “intense involvement” by the DHS’s so-called National Operations Center (NOC). In its own literature, the DHS describes the NOC as “the primary national-level hub for domestic situational awareness, common operational picture, information fusion, information sharing, communications, and coordination pertaining to the prevention of terrorist attacks and domestic incident management.”

The DHS says that the NOC is “the primary conduit for the White House Situation Room” and that it also “facilitates information sharing and operational coordination with other federal, state, local, tribal, non-governmental operation centers and the private sector.”

A better description for a fascist police state network could not be written.

Remember, this vast yet centralized operation — what Verheyden-Hilliard describes as “a vast, tentacled, national intelligence and domestic spying network that the U.S. government operates against its own people” — was in this case deployed not against some terrorist organization or even mob or drug cartel, but rather against a loose-knit band of protesters, all conscientiously and publicly committed to nonviolence, who were exercising their Constitutionally-protected right to gather in public places and to speak out against the crimes and abuses of the corporate elite and the politicians who are bought and paid by that elite.

Among the documents obtained by the PCJF in this second batch of responses to its FOIA filing is one from the NOC Fusion Center Desk dated Nov. 5, 2011, which collects at the federal level and then distributes the names and contact information of a group of Occupy protesters who were arrested during a demonstration in Dallas, TX against Bank of America, one of the nation’s biggest predatory lenders. Although none of the seven arrested were charged with any serious crime (six were charged with “using the sidewalk!”), their names and contact information were widely disseminated by the DHS.

Fusion Centers, a post-9-11 creation, are a federally-funded joint project of the DHS and the US Justice Department which are designed to share intelligence information among such federal agencies as the DHS, the FBI, the CIA and the US Military, as well as state and local police agencies. By their nature they are designed to circumvent legal constraints on various agencies, for example the ban on CIA domestic spying, or the Posse Comitatus Act, which bars active military activity within the borders of the US. There are currently 72 Fusion Centers around the US.

Another group of documents shows that on November 9, two days after a demonstration by 1000 Occupy activists in Chicago protesting social service cuts in that city, the NOC Fusion Desk relayed a request from Chicago Police asking other local police agencies what kind of tactics they were using against Occupy activists. They specifically requested that information be sought from police departments in New York, Oakland, Atlanta, Washington, D.C. Denver, Boston, Portland OR, and Seattle — all the scene of major Occupation actions and of violent police repression.

Realizing that it would look bad if it assisted in such coordination overtly, higher officials in the DHS ordered the recall of the request but then simply rerouted it through “law enforcement channels,” where presumably it would be harder for anyone to spot a federal role in the coordination of local police responses. In response to that order, the documents show that the duty director of the NOC wrote that he would “reach out” to “LEO LNOs (liaison officer) on the floor” to assist. Verheyden-Hilliard explains that LEO is FBI’s nationally integrated law enforcement, intelligence and military network.

On December 12, when Occupy planned anti-war protests at various US ports, Verheyden-Hilliard says the new documents show that the NOC “went into high gear” seeking information from local field offices of the Department of Homeland Security about what actions police in Houston, Portland, Oakland, Seattle, San Diego, and Los Angeles planned to deal with Occupy movement actions.

Another document shows that earlier, in advance of a planned Occupy action at the Oakland, CA port facility on Nov. 2, DHS “went so far as to keep the Pentagon’s Northcom (Northern Command) in the intelligence loop.”

Given the subterfuge revealed in these documents that went into trying to create the illusion that the DHS was and is not coordinating a national campaign of spying, disruption and repression against Occupy activists, it is almost comical to find documents that show the DHS was in “direct communication with the White House” to obtain advance approval of public statements by DHS officials denying any DHS involvement in anti-Occupy actions.

These documents show that both DHS and one of that department’s police arms, the Federal Protective Service (FPS) were in direct contact with Portland, Oregon’s police chief and mayor, discussing how to deal with protesters who were in part on federal property. The coordination between the feds and the local police and political authorities were intense. Yet the approved statement sent to DHS from the White House read:

Any decisions on how to handle specifics (sic) situations are dealt with by local authorities in that location. If a protest area is located on Federal property and has been deemed unsanitary or unsafe by the General Services Administration (GSA) or city officials, and they make a decision to evacuate participants — the Federal Protective Service (FPS) will work with those officials to develop a plan to ensure the security and safety of everyone involved.

There was, comically, also a White House-approved DHS “background” statement, too! (Typically background statements by federal officials are supposed to be used when they want to tell a journalist the true situation but don’t want to have that statement attributed to them or their department. Having it pre-approved by the White House defeats that purpose and is simply a manipulation of the media.)

The faux “background” information included the following–a flat-out lie:

DHS is not actively coordinating with local law enforcement agencies and/or city governments concerning the evictions of Occupy encampments writ large.

Tellingly, the documents also include a Dec. 5 copy of the “Weekly Informant, ” an intelligence report published by the DHS’s Office for State and Local Law Enforcement. The issue includes an update from the Police Executive Research Forum (PERF) concerning the activities of the Occupy Movement. PERF, Verheyden-Hilliard notes, is the group that the federal government claims organized a series of multi-city law enforcement calls to coordinate the police response to Occupy, which led immediately to the wave of violent crackdowns. It was at those meetings that police were advised among other things to act at night, to use aggressive tactics and weapons like tasers and pepper spray, and to take steps to remove journalists and cameras from the scene of crackdowns.

The overall sense from these latest documents is that Washington and the DHS, along with the FBI, was the nexus of the crackdown, orchestrating it, encouraging it, and attempting to cover its tracks.

The documents among other things expose the massive hypocrisy of the Obama administration and the Democratic Party, which this election year have tried to co-opt and claim as their own the anti-fat-cat theme of the “We are the 99%”-chanting Occupiers, while actually acting in the interest of Bank of America and its fellow financial sector mega-firms in trying to crush the movement itself.

To see all the new FOIA documents, go to the PJIF website.

The Democrats Who Unleashed Wall Street and Got Away With It

Thursday, February 2, 2012 by TruthDig.com
by Robert Scheer

That Lawrence Summers, a president emeritus of Harvard, is a consummate distorter of fact and logic is not a revelation. That he and Bill Clinton, the president he served as treasury secretary, can still get away with disclaiming responsibility for our financial meltdown is an insult to reason.

Yet, there they go again. Clinton is presented, in a fawning cover story in the current edition of Esquire magazine, as “Someone we can all agree on. ... Even his staunchest enemies now regard his presidency as the good old days.” In a softball interview, Clinton is once again allowed to pass himself off as a job creator without noting the subsequent loss of jobs resulting from the collapse of the housing derivatives bubble that his financial deregulatory policies promoted.

At least Summers, in a testier interview by British journalist Krishnan Guru-Murthy of Channel 4 News, was asked some tough questions about his responsibility as Clinton’s treasury secretary for the financial collapse that occurred some years later. He, like Clinton, still defends the reversal of the 1933 Glass-Steagall Act, a 1999 repeal that destroyed the wall between investment and commercial banking put into place by Franklin Roosevelt in response to the Great Depression.

“I think the evidence is that I am right about that. If you look at the big players, Lehman and Bear Stearns were both standalone investment banks,” Summers replied, referring to two investment banks allowed to fold. Summers is very good at obscuring the obvious truth—that the too-big-to-fail banks, made legal by Clinton-era deregulation, required taxpayer bailouts.

The point of Glass-Steagall was to prevent jeopardizing commercial banks holding the savings of average citizens. Summers knows full well that the passage of the repeal of Glass-Steagall was pushed initially by Citigroup, a mammoth merger of investment and commercial banking that create the largest financial institution in the world, an institution that eventually had to be bailed out with taxpayer funds to avoid economic disaster for millions of ordinary Americans. He also knows that Citigroup—where Robert Rubin, who preceded Summers as Clinton’s treasury secretary, played leading roles during a critical time—specialized in precisely the mortgage and other debt packages and insurance scams that were the source of America’s economic crisis.

Even Clinton, in a rare moment of honest appraisal of his record, conceded that his signing of the Commodity Futures Modernization Act (CFMA), legalizing those credit default swaps and collateralized debt obligations, was based on bad advice. That advice would have had to come from Summers, his point man pushing the CFMA legislation, which Clinton signed into law during his lame-duck days.

When the British interviewer reminded him of Clinton’s comment, Summers, as is his style, simply bristled: “Again, you make everything so simple, when in fact it’s complicated. Would it have been better if the whole financial reform legislation had passed in 1999, or 1998, or 1992? Yes, of course it would have been better. But … at the time Bill Clinton was president, there essentially were no credit default swaps. So the issue that became a serious problem really wasn’t an issue that was on the horizon.”

That is a lie. Credit default swaps had been sold at least since 1991, and collateralized debt obligations of all sorts quickly became the rage during the Clinton years. Summers surely remembers that Brooksley Born, the legal expert on such matters that Clinton appointed to head the Commodity Futures Trading Commission (CFTC), warned about the ballooning danger of those unregulated derivatives. Born, who served with Summers as one of four members of the President’s Working Group on Financial Markets, tried repeatedly and in vain to get her colleagues to act. When her pleas fell on deaf ears she issued a “concept release” calling attention to an unregulated derivatives market that was even then spiraling out of control.

The CFMA legislation that Summers pushed and Clinton signed was a specific rebuke to Born’s efforts. As Summers testified at the time before a Senate committee: “As you know, Mr. Chairman, the CFTC’s recent concept release has been a matter of great concern, not merely to Treasury, but to all those with an interest in the OTC [over-the-counter] derivatives market. In our view, the Release has cast the shadow of regulatory uncertainty over an otherwise thriving market—raising risks for stability and competitiveness of American derivative trading. We believe it quite important that the doubts be eliminated.”

Those doubts were eliminated by the new law exempting all of that troubling OTC derivatives trading from all existing regulations and regulatory agencies. Summers argued in his congressional testimony that there was no reason for any government regulation of what turned out to be tens of trillions of dollars in toxic assets:

“First, the parties to these kinds of contracts are largely sophisticated financial institutions that would appear to be eminently capable of protecting themselves from fraud and counterparty insolvencies and most of which are already subject to basic safety and soundness regulation under existing banking and securities law.

“Second, given the nature of the underlying assets involved—namely supplies of financial exchange and other financial instruments—there would seem to be little scope for market manipulation of the kind seen in traditional agricultural commodities, the supply of which is inherently limited and changeable.”

Has any economist ever gotten it so wrong?

The Open Mind: Bill Moyers Journal... The Conversation Continues

Friday, November 25, 2011 by The Open Mind / PBS

Originally aired on July 9, 2011

Watch Bill Moyers Journal... The Conversation Continues on PBS. See more from THE OPEN MIND.

What's Behind the Scorn for the Wall Street Protests?

Wednesday, September 28, 2011 by Salon.com

by Glenn Greenwald

 

It's unsurprising that establishment media outlets have been condescending, dismissive and scornful of the ongoing protests on Wall Street.  Any entity that declares itself an adversary of prevailing institutional power is going to be viewed with hostility by establishment-serving institutions and their loyalists.  That's just the nature of protests that take place outside approved channels, an inevitable by-product of disruptive dissent: those who are most vested in safeguarding and legitimizing establishment prerogatives (which, by definition, includes establishment media outlets) are going to be hostile to those challenges.  As the virtually universal disdain in these same circles for WikiLeaks (and, before that, for the Iraq War protests) demonstrated: the more effectively adversarial it is, the more establishment hostility it's going to provoke. (Occupywallst.org)

Nor is it surprising that much of the most vocal criticisms of the Wall Street protests has come from some self-identified progressives, who one might think would be instinctively sympathetic to the substantive message of the protesters.  In an excellent analysis entitled "Why Establishment Media & the Power Elite Loathe Occupy Wall Street," Kevin Gosztola chronicles how much of the most scornful criticisms have come from Democratic partisans who -- like the politicians to whom they devote their fealty -- feign populist opposition to Wall Street for political gain.

Some of this anti-protest posturing is just the all-too-familiar New-Republic-ish eagerness to prove one's own Seriousness by castigating anyone to the left of, say, Dianne Feinstein or John Kerry; for such individuals, multi-term, pro-Iraq-War Democratic Senator-plutocrats define the outermost left-wing limit of respectability.  Also at play is the jingoistic notion that street protests are valid in Those Bad Contries but not in free, democratic America.

A siginificant aspect of this progressive disdain is grounded in the belief that the only valid form of political activism is support for Democratic Party candidates, and a corresponding desire to undermine anything that distracts from that goal.  Indeed, the loyalists of both parties have an interest in marginalizing anything that might serve as a vehicle for activism outside of fealty to one of the two parties (Fox News' firing of Glenn Beck was almost certainly motivated by his frequent deviation from the GOP party-line orthodoxy which Fox exists to foster).

The very idea that the one can effectively battle Wall Street's corruption and control by working for the Democratic Party is absurd on its face: Wall Street's favorite candidate in 2008 was Barack Obama, whose administration -- led by a Wall Street White House Chief of Staff and Wall-Street-subservient Treasury Secretary and filled to the brim with Goldman Sachs officials -- is now working hard to protect bankers from meaningful accountability (and though he's behind Wall Street's own Mitt Romney in the Wall Street cash sweepstakes this year, Obama is still doing well); one of Wall Street's most faithful servants is Chuck Schumer, the money man of the Democratic Party; and the second-ranking Senate Democrat acknowledged -- when Democrats controlled the Congress -- that the owners of Congress are bankers.  There are individuals who impressively rail against the crony capitalism and corporatism that sustains Wall Street's power, but they're no match for the party apparatus that remains fully owned and controlled by it.

But much of this progressive criticism consists of relatively (ostensibly) well-intentioned tactical and organizational critiques of the protests: there wasn't a clear unified message; it lacked a coherent media strategy; the neo-hippie participants were too off-putting to Middle America; the resulting police brutality overwhelmed the message, etc. etc.  That's the high-minded form which most progressive scorn for the protests took: it's just not professionally organized or effective.

Some of these critiques are ludicrous.  Does anyone really not know what the basic message is of this protest: that Wall Street is oozing corruption and criminality and its unrestrained political power -- in the form of crony capitalism and ownership of political institutions -- is destroying financial security for everyone else?  Beyond that, criticizing protesters for the prominence of police brutality stories is pure victim-blaming (and, independently, having police brutality highlighted is its own benefit).

Most importantly, very few protest movements enjoy perfect clarity about tactics or command widespread support when they begin; they're designed to spark conversation, raise awareness, attract others to the cause, and build those structural planks as they grow and develop.  Dismissing these incipient protests because they lack fully developed, sophisticated professionalization is akin to pronouncing a three-year-old child worthless because he can't read Schopenhauer: those who are actually interested in helping it develop will work toward improving those deficiencies, not harp on them in order to belittle its worth.

That said, some of these organizational/tactical critiques are valid enough as far as they go; the protests could probably be more effective with some more imaginative, concerted and savvy organizational strategies. The problem is these criticisms don't go very far -- at all.

* * * * *

There's a vast and growing apparatus of intimidation designed to deter and control citizen protests.  The most that's allowed is to assemble with the permission of state authorities and remain roped off in sequestered, out-of-the-way areas: the Orwellian-named free speech zones.  Anything that is even remotely disruptive or threatening is going to be met with aggressive force: pepper spray, mass arrests by highly militarized urban police forces, and aggressive prosecutions.  Recall the wild excesses of force in connection with the 2008 RNC Convention in Minneapolis (I reported on those firsthand); the overzealous prosecutions of civil disobedience activists like Aaron Swartz, environmentalist Tim DeChristopher, and Dan Choi; the war being waged on whistleblowers for the crime of exposing high-level wrongdoing; or the treatment of these Wall Street protesters.

Financial elites and their political servants are well aware that exploding wealth inequality, pervasive economic anxiety, and increasing hostility toward institutions of authority (and corresponding realization that voting fixes very little of this) are likely to bring London-style unrest -- and worse -- to American soil; it was just two weeks ago that New York Mayor Michael Bloomberg warned that the unemployment crisis could trigger "riots."  Even the complacent American citizenry -- well-trained in learned impotence and acquiescence to (even reverence for) those most responsible for their plight -- is going to reach a tipping point of unrest.  There are numerous weapons of surveillance and coercion that have been developed over the last decade in anticipation of that unrest: most of it justified in the name of Terrorism, but all of it featuring decidedly dual-use domestic capability (illustrating what I mean is this chart showing how extensively the Patriot Act has been used in non-Terrorist cases, and how rarely it has been used for Terrorism).

In sum, there is a sprawling apparatus of federal and local militarized police forces and private corporate security designed to send this message: if you participate in protests or other forms of dissent outside of harmless approved channels, you're going to be harmed in numerous ways.  As Yves Smith put it this week:

I’m beginning to wonder whether the right to assemble is effectively dead in the US. No one who is a wage slave (which is the overwhelming majority of the population) can afford to have an arrest record, even a misdemeanor, in this age of short job tenures and rising use of background checks.

This is all designed to deter any meaningful challenges to the government and corporate institutions which are suffocating them, to bully those who consider such challenges into accepting its futility.  And it works.  In an excellent essay on the Wall Street protests, Dennis Perrin writes:

The dissident children were easily, roughly swept aside. Their hearts are in a good place. Their bodies a minor nuisance. They'll stream back to prove their resolve. And they'll get pepper sprayed and beaten down again. And again.
I admire these kids. They're off their asses. Agitating. Arguing. Providing a living example. There's passion and feeling in their dissent. They're willing to be punished. It's easy to mock them, but how many of you would take their place? . . . .
Yet I have doubts. The class war from above demoralizes as much as it incites. Countless people have surrendered. Faded from view. To demonstrate or occupy corporate turf doesn't seem like a wise option. You'll get beaten and arrested. For what? Making mortgage payments is tough enough.

Given the costs and risks one incurs from participating in protests like this -- to say nothing of the widespread mockery one receives --  it's natural that most of the participants will be young and not yet desperate to cling to institutional stability.  It's also natural that this cohort won't be well-versed (or even interested) in the high arts of media messaging and leadership structures.  Democratic Party precinct captains, MBA students in management theory and corporate communications, and campaign media strategists aren't the ones who will fuel protests like this; it takes a mindset of passionate dissent and a willingness to remove oneself from the safe confines of institutional respectability.

So, yes, the people willing to engage in protests like these at the start may lack (or reject the need for) media strategies, organizational hierarchies, and messaging theories.  But they're among the very few people trying to channel widespread anger into activism rather than resignation, and thus deserve support and encouragement -- and help -- from anyone claiming to be sympathetic to their underlying message.  As Perrin put it:

This part of Michigan [where I live] was once militant. From organized labor to student agitation. Now there's nothing. Shop after shop goes under. Strip malls abandoned. Legalized loan shark parlors spread. Dollar stores hang on. Parking lots riots of weeds. Roads in serious disrepair. Those with jobs feel lucky to be employed. Everyone else is on their own. A general resignation prevails. Life limps by.

Personally, I think there's substantial value even in those protests that lack "exit goals" and "messaging strategies" and the rest of the platitudes from Power Point presentations by mid-level functionaries at corporate conferences.  Some injustices simply need anger and dissent expressed for its own sake, to make clear that there are citizens who are aware of it and do not accept it.

In Vancouver yesterday, Dick Cheney was met by angry protests chanting "war criminal" at him while he tried to hawk his book, which prompted arrests and an ugly-for-Canada police battle that then became part of the story of his visit.  Is that likely to result in Cheney's arrest or sway huge numbers of people to change how they think?  No.  But it's vastly preferable to allowing him to traipse around the world as though he's a respectable figure unaccompanied by anger over his crimes -- anger necessarily expressed outside of the institutions that have failed to check or punish (but rather have shielded and legitimized) those crimes.  And the same is true of Wall Street's rampant criminality.

But for those who believe that protests are only worthwhile if they translate into quantifiable impact: the lack of organizational sophistication or messaging efficacy on the part of the Wall Street protest is a reason to support it and get involved in it, not turn one's nose up at it and join in the media demonization.  That's what one actually sympathetic to its messaging (rather than pretending to be in order more effectively to discredit it) would do.  Anyone who looks at mostly young citizens marching in the street protesting the corruption of Wall Street and the harm it spawns, and decides that what is warranted is mockery and scorn rather than support, is either not seeing things clearly or is motivated by objectives other than the ones being presented.

Why Obama Was Never Going to Be the Next FDR

Megan McArdle, The Atlantic | Sep. 14, 2011

Each party has their sweeping historic narrative leading to eventual triumph, and this slotted neatly into what you I'd call the Ur-Myth, the Creation Story, of the modern Democratic Party.

In that heroic tale, before 1932, the earth was ruled by evil, Laissez-Faire Republicans who ruined the economy with their speculative excesses.

The result was the Great Depression.

Thankfully, the people saw that Republicans had made the earth a terrible place, and they annointed elected FDR to make things right.

With a combination of massive government spending and tight regulation, FDR was able to put things right, to restore balance in the world.

Thus was the Great Depression ended, and in grateful recognition, the American public made Democrats king-for-life for another generation.

Every time you see Rachel Maddow make an MSNBC commercial standing in front of the Hoover Dam, or something similar, you are seeing a reference to that still-powerful foundation story.

So it's not surprising that many Democrats assumed that financial crises and recessions are, well, good for Democrats and/or progressive policy advocates.

I always thought this was nonsense: financial crises and recessions aren't good for Democrats; they're bad for whoever happens to be in charge, which merely means they're good for whoever isn't in charge by default.  Hoover was indicted by history not because he'd done nothing--he had actually done quite a bit--but because the Depression had continued to worsen despite the things he did do.

I see that there are now liberals coming to the same conclusion.  Robert S. McElvaine, a history professor at Millsaps, seems bewildered and almost hurt:

"Under Roosevelt, national policies eased the harsh impact of the Great Depression and turned public opinion strongly in favor of a more active government. Obama's 2008 election appeared to pave the way for a similar turn against the economic approach that had produced the collapse -- as well as a renewal of popular support for government action in the public interest.

Instead, public opinion has turned against government, and many middle-class people support a movement that favors the low-tax, anti-regulation, concentrate-the-income-at-the-top policies that led to economic catastrophe in both 1929 and 2008.

. . . Rather than precipitating a New Deal, as had similar circumstances before FDR won the presidency, the economic disaster under President George W. Bush has produced calls for a return to the tried-and-failed very Old Deal of Calvin Coolidge and even William McKinley.

Why?

A significant part of the answer, as I argued here, is that Obama took office only four months after the collapse of 2008, while Roosevelt did not take office until 3½ years after that of 1929. By 1933, there could be no question in the minds of most people that the Depression was the fault of the Republican leadership of the 1920s and its economic philosophy, with its absolute faith in an unregulated market."

Yet even recognizing that FDR got tremendously lucky in his choice of election years does not cause McElvaine to question the Ur-Myth; instead, he segues into a complaint that Obama needs to be feistier, like FDR was.

Smart progressive Ezra Klein, however, offers what I think is the correct take:

"The pat story behind FDR's victory and the ensuing decades of mostly Democratic dominance is that the president got the policy right and the politics followed. Whatever you believe about FDR's policies, a more international perspective will disabuse you of the notion that the golden age for the Democratic Party was an ideological triumph rather than an accident of history. As Larry Bartels, a political scientist at Vanderbilt University, has written, globally, the pattern is clear: Whichever party was in power when the Great Depression hit was booted out of office, and whichever party was in power when the global recovery took hold reaped huge political benefits.

"In the U.S.," wrote Bartels, "voters replaced Republicans with Democrats and the economy improved. In Britain and Australia, voters replaced Labor governments with conservatives and the economy improved. In Sweden, voters replaced Conservatives with Liberals, then with Social Democrats, and the economy improved."

But this shouldn't have come as a surprise.  It was, I think, predictable in 2008, if you had read much history of the Great Depression.   How do I know?
Er, ahem . . .

"Is it 1932?
I heard that a fair amount last night, and over the past few days. This is faulty economic history. It is not 1932. It is 1929.

Outside of the economics profession, the FDR mythos is strong among Democrats: Hoover did nothing, and then FDR came in with his magic Keynesianism, and through the mighty power of massive government spending and a huge increase in the social safety net, got America moving again.

Economic historians know better. You can argue whether FDR, on net, helped a lot, helped a little, or mildly hindered recovery. But you cannot argue that if FDR had gotten into office on January 20th, 1930, America would have avoided most of the pain of the next three years. The progression of the bank panics and industrial slowdown throughout the next two years is well described, but not well understood. But the problem was clearly not merely a lack of government activity, or fiscal stimulus. Hoover was, contra popular myth, fairly active. It's just nothing he did worked. Neither did most of the things FDR tried.

FDR did some things right, don't get me wrong--and I think some of those really made a difference, notably bank audits and the creation of the FDIC. But he also benefitted tremendously from stepping in just as the banking system, and hence the economy, were bottoming out. By the time of the second banking panic, the system really didn't have much of anywhere to go but up.

Obama has the benefit of better economic theory--but not nearly as much better as we thought six months ago. There is no economic consensus--or even a revolutionary school like the Keynesians--with a coherent program for getting us out of the crisis. The happy, utterly wrong narrative of Democrats striding in and boldly reversing Republican errors with stiff regulation, an expanded safety net, and massive fiscal stimulus, is wrong when applied to FDR. It won't save Obama either.

If the crisis is as bad as some people fear, Obama will have no magic bullet to fire at it. The very best he can hope for is a fairly successful process of trial and error. To the electorate, that will look like bumbling as Rome burns."

I just came across that today.  It reads a little eerie, even to me.  But this wasn't genius speaking; it's just long seemed obvious to me that some presidents get lucky economic breaks, and some . . . don't.

Subsequent events have only made the parallel stronger.  It turned out that we didn't have any economic magic tricks up our sleeve; economic policy is not even as advanced as we thought in 2008.  Stimulus may somewhat ease the pain of a recession, but it is at best an expensive palliative, not a way to shorten the illness.  And Reinhart and Rogoff seem to be right that financial crises are long, painful, and accompanied by persistently high unemployment.  FDR's biggest policy contribution to GDP growth in the early years was going off the gold standard, followed by shoring up the banking system, and the FDIC; these are not remedies that are open to Obama, since we already did them eighty years ago.

As Ezra goes on to discuss, this suggests that there's a decent possibility Obama may end up a one-term president, with stimulus and other signature achievements discredited in the way that Hoover's term was supposed to have discredited Laissez-Faire.  He was never likely to be the second coming of FDR . . . but he could well end up as the reincarnation of Herbert Hoover.

I doubt the reaction will be as strong--the Great Depression was really a whole lot worse than our current problems in almost every way you can think of.  Still, it would be a savage blow for what was supposed to be the progressive moment, and it won't be any fairer than it was to Hoover.

But if you want to make history, you take the risk that you'll get panned by the critics.

When You Play the Plutocrats’ Game, They Win: On Civility and Half Measures

Thursday, August 11, 2011 by CommonDreams.org
by Kristine Mattis

Like many Wisconsinites, I am feeling rather dejected after the disappointing August 9th recall elections. But unlike most of my brothers and sisters, my disappointment stems not so much from the outcome, but from the adherence to propriety and to a faith in inherently corrupt and unjust systems.

I was inspired and awed by the spontaneous and sustained uprisings in February and March and solidarity of the people of Wisconsin. Having lived numerous places throughout this country, there is no other place I would have wanted to call home at that moment. I was so proud to be among the protesters and my tendency toward negativity was suspended for a brief period. And then it ended. People went back to work (or unemployment) and though small demonstrations continued, the massive manpower and money was instead redirected toward recalling six Republican state senators and attempting to replace them with Democrats.

Though I was surprisingly impressed by the bold stand that the fourteen Democratic state senators took to protect the rights of their citizens, and though, having attended hearings in the state legislature, I have found many of these Wisconsin Democratic representatives to be supportive of the needs of the people in the state, I chose not to devote my current activism to the recall elections.

I was at the bargaining table last year when the Wisconsin state legislature and governor’s office were controlled by Democrats. Nevertheless, we state employee unions were told off the bat that any increases in any types of monetary compensation were off the table, and that our health insurance premiums would be increased. Game over. Doing anything else was too risky in “this political climate,” they said. Having worked in the U.S. House of Representatives previously, I saw firsthand the complicity and complacency of many federal Democrats, but I really had no knowledge of politics at the state level in WI. I learned quickly as, after months of negotiating, even our very crappy contracts were voted against by a couple of turncoat Democrats seeking political leverage from the incoming legion of Republicans.

In the past thirty years, state and local governments – in fact society in general - have been catering more and more to corporate interests, and consequently corporate interests have been taking over our state and our society. This has resulted in their co-opting of the only two major political parties allowed to exist in the U.S., as well as in the largest redistribution of wealth from the poor to the rich in history. In real terms, massive unemployment, poverty, hunger, homelessness, and social decay has spread across America, going largely unnoticed by anyone not experiencing it, or more likely, trying their hardest to deny it. The corporate controlled media does not report it to any substantive extent. They are too busy promoting new products, gadgets and consumer distractions.

In addition to consistent tax cuts for the rich and corporations and the expenses incurred from two-plus illegal and unnecessary imperial wars, the most recent recession in 2008 - caused by the unregulated casino known as Wall Street - has caused most of the fiscal crises in the states and throughout the nation. Yet, the Wall Street bankers committed fraud, the “brilliant” Ivy-League educated economists looked blithely away as the economic system collapsed, and the government officials who should have prosecuted the thieves let the perpetrators go scot free and proceeded to blame vital public employees for the financial woes caused by the rich. They not only allowed the criminals to go away unscathed, they fed these same criminals OUR money so that they could maintain their obscene wealth. Meanwhile, all over the nation, we, who had already lost everything, were being told we had to lose MORE so that those same rich people whom we had bailed out could “save” us through their privatization of all public goods (which, of course, does nothing but fatten their pocketbooks and starve us dead).

These unspeakable acts of reverse Robin-Hood corporate socialism took place under the watch of both Democrats and Republicans. We’d all like for it to not be so, in order for us to be able to easily place blame on one side, and go to the polls to vote in the other direction, but that vote is just a half measure. It often obtains little and changes nothing.

I do not wish to blame the Democratic officials in my state, because many of them - including Rep. Tammy Baldwin, and numerous state assembly-persons and senators whom I have had the good fortune of meeting during these recent months - have proven themselves more stalwart and progressive than most. I also recognize the insidiousness of the phony “grassroots” Tea Party, their corporate sponsors, their Republican allies, and their media propaganda machine. But laying the blame for the desperate state we find ourselves in solely at the feet of the GOP is completely disingenuous. Despite the rhetoric in the media, the real conflict is not between the Democrats and the Republicans; here and throughout the world, there is not a political war but a class war – and the rich are winning by a landslide. Given that context, trying to exact change through electoral politics is futile because the system is already rigged by the plutocrats, and because if one is not willing to deviate from their system, one is bound to lose.

Many political activists working on the recall elections have been saying that we want to elect Democrats to “stop the bleeding” and then we will hold them accountable to the people. From my vantage point, I do not see bleeding; I see fatal hemorrhaging from the carotid artery that only societal change, not politics, will be able to surgically repair.

When we play the game of the plutocrats, we allow:

• A “Citizen’s United” election in which endless corporate moneys control the outcome
• Continuation of the false premise that Wisconsin even had a budget “crisis”
• Media framing that “the people have spoken through their votes” (regardless of the fact that this cannot be the case in a country where corporations are considered people)
• Domination by “middle class” in discourse, instead of discussions about poverty, racism, and severe social injustices
• Political tricks and illegal maneuvers (see: falsification of election date on absentee ballots, consistent election irregularities in Waukesha county clerk’s office, phony robo-calls by right-wing groups, voter intimidation at polls, voter disenfranchisement through cumbersome voter ID law, etc.) going uncontested or unprosecuted
• “Conspiracy theory” narratives to dismiss all skepticism, despite tremendous evidence of organized wrongdoings

One of the main ways we play into their game is through prevarication and civility. What should have happened, as many chanted on March 9th – the day the state Assembly illegally voted on the anti-collective bargaining bill and 7000 people immediately flooded past the gatekeepers at the capitol doors to protest – was a general strike. If our elected officials can break a law that attempts to protect the transparency of our state legislative process by pushing through a vote without due notice, then citizens should have broken a wholly unjust law that attempts to criminalize the rights of workers to not show up for work.

I’m originally from New York. New Yorkers have a justified stereotype of being rude and abrasive (often unprovoked and for no reason). By contrast, what I have found living in Wisconsin for the past two years and in the Upper Midwest for the past four, is that civility is at a premium here. As a general rule, people like to maintain decorum and do not like to complain. That can be a very nice thing, for example, when you are new in town and everyone is welcoming and nice. But it is extremely disadvantageous when one is reticent to “act out” for fear of conflict or contention.

One of the Democrats in the recall elections said in an interview that she did not like the recent changes in Wisconsin government, because things had become so divisive and people could not compromise. Given the current state of affairs, I would say that compromise is not in order. When it comes to balancing a budget by hampering or eliminating all of the social safety nets for the poor in order to enhance incentives for corporate interests, a legislator who seeks a balanced “compromise” on these unequal terms is not a legislator that any citizen needs. Likewise, a citizen who would rather retract into her (not-so) comfortable life by casting a vote rather than by challenging an unjust political and social system is not a citizen who will be victorious for her cause. Right now, I hope that Wisconsinites can realize that when battling plutocracy, one must leave one’s civility at the door. Maybe now’s the time to take a lesson from the New Yorkers; maybe now’s the time to stop playing by their rules and to be belligerent, obstinate, and uncompromising.

Unemployment is Obama's Bigger Problem Than the Debt Ceiling

John Nichols - The Nation

The big story out of Washington—and rightly so—is the debt ceiling deal that President Obama compromised to the point of losing. The president abandoned his 2008 campaign promise to be an absolute defender of Social Security, Medicare and Medicaid, so he will have very little indeed to run on in 2012.

But that won’t be what beats him.

Because the biggest story in America is a different one from the biggest story in Washington. Americans are not that into the debt ceiling debate. Polling has suggested that  a quarter of Americans are “closely following” the fight.

The issue that Americans have been following closely, and will continue to follow straight through the 2012 election cycle, the issue that tops the polls on the list of concerns, is the jobs crisis. Americans are worried about unemployment and underemployment.

And on Friday they got a lot more worried.

The Los Angeles Times headline was stark: “Dismal Jobs Report Shows Unemployment Rising to 9.2% (U3).”

The New York Times headline was, if anything, bleaker: “Job Growth Falters Badly, Clouding Hopes for Recovery.”

The 9.2% official unemployment rate—up from 9.0 percent two months ago and 9.1 percent a month ago—is only a pale shadow of the real rate. Categorized in official terms as the “U6” unemployment, the real rate includes the offically unemployed as well as Americans who are underemployed and those who have given up on the search for work. It stands at more than 16% nationally. And in depressed states, such as Michigan (which Obama carried handily in 2008 but where is approval ratings are now troublingly low), it is well over 20%.

The official and the real unemployment rates are devastating. These numbers are some of the worst since the Great Depression. But they are not getting the response that high unemployment rates got from Democrats in the Depression era of other periods of economic downtown in the years since.

President Obama and his team have never focused on job issues with the intensity that is needed. And now they are simply being ridiculous.

David Plouffe, the president’s political czar, said on the eve of the release of Friday’s dismal jobs numbers that he does not believe that the high unemployment rate poses a threat to President Obama’s 2012 re-election campaign. (Oh, really? Exactly how out of touch ARE Obama's Democrats?--jef)

Speaking to reporters this week, Plouffe said, “The average American does not view the economy through the prism of GDP or unemployment rates or even monthly jobs numbers. People won’t vote based on the unemployment rate, they’re going to vote based on: ‘How do I feel about my own situation? Do I believe the president makes decisions based on me and my family?’ ” (Oh, is this guy in for the rudest awakening come Nov. 2012.--jef)

The almost 10 percent of Americans who are officially unemployed probably don’t feel all that great about their situation. The same goes for the the tens of millions of additional Americans who are underemployed or who have fallen off official radar because they have given up on the search for work in communities where there are simply no jobs to be had.

The unemployed, the underemployed and the abandoned add up to one in five Americans. And an awfully lot of them live in battleground states such as Indiana, Michigan, Ohio and Pennsylvania —all of which President Obama won in 2008, all of which President Obama needs to win in 2012.

Now, let’s be clear, no one in their right mind thinks that the Republicans who would be president are any more concerned about jobless Americans than is the Obama administration.
But neglecting unemployment as an issue—or presuming, as Plouffe does, that Americans will give Obama the benefit of the doubt—is political madness.

When unemployment reaches the level that it has nationally, and the even higher levels that it has in battleground states, potential Obama voters start losing faith that “the president makes decisions based on me and my family.”

Some of the disappointed may still vote for Obama out of fear of the Republicans, some will find social issues that draw them to the Republicans, but millions will simply stay home —as they did in 2010.

That’s the danger heading into the 2012 race, and it is more profound today than at any time in Barack Obama’s presidency.

Obama is toying with the notion of running for reelection as the president who did what George Bush could not: cut Medicare, Medicaid and Social Security.

That calculus suggests that Obama and his team really are out of touch with the electoral dynamic.

But that is not the most politically tone deaf scheme to come out of the president’s camp.

While the president’s apparent willingness to take the best argument available to Democrats going into the 2012 election cycle—the promise that they will defend Medicare, Medicaid and Social Security—suggests that Obama learned nothing from the Democratic party’s devastating electoral experience in 2010, his top political aide’s statements with regard to unemployment suggest that his team has learned even less.

No president since Franklin Roosevelt has won re-election when the unemployment rate was over 7 percent. And Roosevelt won because he ran as a candidate who was fully willing to use the power of the federal government to create jobs —and programs like Social Security.

The notion that a Democratic president can win re-election with an unemployment rate that is edging upward and a deal to cut Social Security is not merely unrealistic. It is evidence of a disconnect that could devastate not just Obama’s re-election campaign in 2012 but Democratic prospects for years to come.

Obama is NOT “Caving” to Corporate Interests

Sunday, July 24, 2011 by CommonDreams.org
He "Caved" a long time ago...He's a sellout
by Jeff Cohen

 

In  a campaign almost as frenzied as the effort to get Barack Obama into the White House, liberal groups are now mobilizing against the White House and reported deals that would cut Social Security, Medicare and Medicaid benefits. They accuse President Obama of being weak and willing to “cave” to corporate and conservative forces bent on cutting the social safety net while protecting the wealthy.

Those accusations are wrong.

The accusations imply that Obama is on our side. Or was on our side. And that the right wing is pushing him around.

But the evidence is clear that Obama is an often-willing servant of corporate interests -- not someone reluctantly doing their bidding, or serving their interests only because Republicans forced him to.

Since coming to Washington, Obama has allied himself with Wall Street Democrats who put corporate deregulation and greed ahead of the needs of most Americans:

• In 2006, a relatively new Senator Obama was the only senator to speak at the inaugural gathering of the Alexander Hamilton Project launched by Wall Street Democrats like Robert Rubin and Roger Altman, Bill Clinton’s treasury secretary and deputy secretary. Obama praised them as “innovative, thoughtful policymakers.” (It was Rubin’s crusade to deregulate Wall Street in the late ‘90s that led directly to the economic meltdown of 2008 and our current crisis.)
   
• In early 2007, way before he was a presidential frontrunner, candidate Obama was raising more money from Wall Street interests than all other candidates, including New York presidential candidates Hillary Clinton and Rudy Giuliani.
   
• In June 2008, as soon as Hillary ended her campaign, Obama went on CNBC, shunned the “populist” label and announced: “Look: I am a pro-growth, free-market guy. I love the market.” He packed his economic team with Wall Street friends -- choosing one of Bill Clinton’s Wall Street deregulators, Larry Summers, as his top economic advisor.
   
• A year into his presidency, in a bizarre but revealing interview with Business Week, Obama was asked about huge bonuses just received by two CEOs of Wall Street firms bailed out by taxpayers. He responded that he didn’t “begrudge” the $17 million bonus to J.P. Mogan’s CEO or the $9 million to Goldman Sachs’ CEO: “I know both those guys, they are very savvy businessmen,” said Obama. “I, like most of the American people, don’t begrudge people success or wealth. That is part of the free-market system.”

After any review of Obama’s corporatist ties and positions, the kneejerk response is: “Yes, but Obama was a community organizer!”

He WAS a community organizer. . .decades before he became president. Back when Nelson Mandela was in prison and the U.S. government declared him the leader of a “terrorist organization” while our government funded and armed Bin Laden and his allies to fight the Soviets in Afghanistan.  That’s a long time ago.

It’s worth remembering that decades before Reagan became president, the great communicator was a leftwing Democrat and advocate for the working class and big federal social programs.

The sad truth, as shown by Glenn Greenwald, is that Obama had arrived at the White House looking to make cuts in benefits to the elderly. Two weeks before his inauguration, Obama echoed conservative scares about Social Security and Medicare by talking of “red ink as far as the eye can see.” He opened his doors to Social Security/Medicare cutters -- first trying to get Republican Senator Judd Gregg (“a leading voice for reining in entitlement spending,” wrote Politico) into his cabinet, and later appointing entitlement-foe Alan Simpson to co-chair his “Deficit Commission.” Obama’s top economic advisor, Larry Summers, came to the White House publicly telling Time magazine of needed Social Security cuts.

 At this late date, informed activists and voters who care about economic justice realize that President Obama is NOT “on our side.”

Independent Senator Bernie Sanders of Vermont -- widely seen as “America’s Senator” -- is so disgusted by recent White House actions that he called Friday for a challenge to Obama in Democratic primaries: “I think it would be a good idea if President Obama faced some primary opposition.”

Although Sanders has said clearly that he’s running for reelection to the senate in 2012 – not for president -- his comment led instantly to a Draft Sanders for President website.

Imagine if a credible candidate immediately threatened a primary challenge unless Obama rejects any deal cutting the safety net while maintaining tax breaks for the rich. Team Obama knows that a serious primary challenger would cost the Obama campaign millions of dollars. And it may well be a powerful movement-building opportunity for activists tired of feeling hopeless with Obama.

It’s time for progressives to talk seriously about a challenge to Obama’s corporatism. Polls show most Americans support economic justice issues, and that goes double for Democratic primary voters.

If not Bernie, who? If not now, when?

Obama, Still Better Than Bush?

(I almost wrote this very article. One reason he is worse is because we knew what Bush would bring to the table. He didn't surprise many, did he?  But Obama came in doing the exact opposite of what he campaigned for/on. His broken promises read like epic failure.--jef)

+++++++++++++++++

It's Really Hard to Tell
By ANDREW LEVINE

A gullible portion of the electorate here in the Homeland  and a gullible slice of the entire world expected a great deal from Barack Obama.  But anyone who paid close attention to his run for the White House, and who managed not to succumb to the promise of hope that radiated out from the Rorschach figure Obama then was, expected nothing more than a Clintonite Restoration with cosmetic changes.  

Still, even those of us with expectations as low as that thought it obvious that an Obama administration would be a vast improvement over what we had endured for the preceding eight years.  And, once the Democratic field narrowed to a choice between Obama and Hillary Clinton, there was ample reason to prefer that the nomination go to him.  He seemed less inclined to make fast and loose with soldiers and bombs, and less unfriendly than she would be towards what remains of the affirmative state generations of Democrats helped fashion and that her husband did so much to undo.       

Still, no matter how low the expectations, it did not take long for disappointment to set in.  For me, it began the day Obama made Joe Biden his running mate.  It’s not that Biden’s politics is worse than other Democrats’; it’s that this purported foreign policy wise man has no idea how clueless he is about the world or how off his enthusiasms and animosities are.  Even after the election, I, along with other Obama skeptics, would still, in moments of weakness, let myself think that great things might happen yet; that Obama was only being god-fatherly with his appointments, keeping his friends close and his enemies closer.  That was, after all, the conventional wisdom among liberal pundits, and the will to believe is strong. 

But the illusion became harder to maintain as Inauguration Day approached – with Timothy Geithner, Lawrence Summers and other Wall Street toadies slated to manage economic policy, Hillary Clinton chosen to be Secretary of State, and George Bush’s Defense Secretary, Robert Gates, kept on to run Bush’s wars.  It was in that period too that it became clear that, under Obama, there would be no settling of accounts with the historical crimes of the Bush era.   As if that wasn’t enough to cause despair, Obama’s silence on Operation Cast Lead, the Israeli assault on Gaza, was deafening.  

Then, for a while, it looked like the situation Bush and Cheney handed over to the fledgling President was so desperate that common sense would prevail, forcing him to act in the ways his supporters expected he would.  He resisted the pressure.  By the time Rahm Emanuel made it clear that the administration would scuttle the “public option” to get its milquetoast health care (actually, insurance reform) bill passed, all one could say in Obama’s behalf is that, no matter how disappointing he might be, at least he was better than Bush.

How could that not be right? Anybody would be better than Bush!  It is therefore telling that one rarely hears that faint praise these days – and not just because memories of Bush’s awfulness have faded.  It isn’t said much anymore because it has come to seem less obviously true.  Nowadays, what one hears instead is just that Obama is better than the loonies running for the Republican nomination. 

That claim is unassailable.  But it doesn’t speak to the question at hand: whether Obama is still better than Bush.   On election day 2012, it may become relevant – especially to voters living in states whose electoral votes are up for grabs -- that the Republican candidate is worse, probably much worse, than Obama could ever be.  But that has nothing to do with what is an urgent task now: coming to a clear understanding of what the Obama presidency has been about, and what its trajectory is likely to be.  

Because circumstances change and because each president is awful in his own way, comparing presidents is, as a rule, a fatuous exercise, fit only for TV pundits and pop historians.  But, in this case, the time frame is narrow enough and the circumstances similar enough that a comparison can be instructive.  In that spirit, I would venture that George W. Bush’s first administration, from the weeks following 9/11 until the 2004 presidential campaign got underway, was exceptionally awful in every respect.  If that is the point of reference, it would be hard for Obama, or anyone else, not to be better than Bush.  

But if we focus instead on Bush’s second term, and especially on the years after the 2006 election, it’s not at all clear that Obama has been a better president.  Indeed, one could make a case that, style apart, the Obama administration has continued along the lines its predecessor established.  To the extent this is so, it would follow that his administration has not improved upon what came before it except, at most, in superficial ways.  Lately, some erstwhile Obama supporters have even suggested that, in key respects, the Obama administration has been worse than Bush’s – especially on environmental matters and on a host of issues pertaining to the rule of law.

For some diehard Obamaphiles, Libya was the last straw.  This latest war of choice, in no way attributable to Bush, is a blatant imperialist venture, undertaken on a disingenuous pretext that fell apart almost from Day One.  Intended, supposedly, to save civilian lives, the US/NATO bombing has unleashed a civil war.  Libya also exposes what Obama’s vaunted “multilateralism” amounts to: empowerment of right-wing politicians from the “old” Europe – miscreants like David Cameron and Nicolas Sarkozy -- keen on reviving the bad old days.  

But the main problem with this latest war is that the way Obama launched it is in plain violation not just of the War Powers Act but also of Article 1, Section 8 of the U.S. Constitution; and that he did it that way not because Congress wouldn’t have gone along, but so that in the future he could claim that, as Commander-in-Chief, he has the right to launch drones and drop bombs more or less as he pleases; Congress be damned.  We now know that his top lawyers told him that this was illegal, as it plainly is.  He did it anyway, finding lower-level lawyers who told him what he wanted to hear.  

At least Bush and Cheney did not deliberately not ask Congress to authorize their wars.  If only for this reason, Obama, the peace candidate and Nobel laureate, is certainly no better than his predecessor on questions of executive power.  Arguably, he is worse.     

Because there is likely to be movement on this front in the near future, it is worth noting an area in which Obama’s defenders can fairly say that he is is indeed better than Bush, though only slightly. 

He is better on gay politics.  Until recently, one could not have said that.  For almost two years, Obama neglected gay issues as much as he did the concerns of the rest of his base.  But then, when he and his advisors thought it expedient to shore up liberal support, he finally “nudged” Congress to repeal “don’t ask, don’t tell.”  He also declared that his administration would no longer defend the Defense of Marriage Act in the courts, though it will continue to enforce it.  These are small moves in the right direction; they advance equality.  But note, first, that Obama never leads, he only follows when it is plain that the public has his back; and note too that these issues are ones that “progressives” should feel ambivalent about supporting.   

It is fair to say that one reason why Obama threw this sop to his base is that the radicalism that once animated the struggle for gay liberation has gone missing.  Advancing equality is a good thing of course, but should progressives militate in favor of measures that aid military recruiting and retention?  And shouldn’t they be proposing civil unions, not marriage, for all?  

The issue is not or should not be about “marriage,” the word.  It is about how the institution the word designates is understood by proponents of gay marriage today.  Their understanding, like the understanding of their adversaries, offends the separation of church and state.  That principle was important at the time of the founding of the republic and it is important now as theocratic currents swell around us.  This is why progressives should fight to keep religion out of our political and civil affairs.  But by seeking to advance equality in the way proponents of gay marriage do, they implicitly legitimate its presence.    

Needless to say, if, for any reason, people want clerics involved in validating their relationships, that is their business and they should be free to do as they please.  But the state’s interest is limited to the civil aspects of marriage (or civil union).  It therefore has no business allowing clerics to confer the rights that marriage (or civil union) entails; the state alone should regulate the institution.  Unfortunately, this rather obvious and far from radical point has not registered much lately in the struggle for equality.  Proponents of gay marriage don’t want to change the institution; they only want same-sex couples brought into it.

The comforting conservatism of gay activists, along with the fact that gay issues don’t materially affect the interests of the corporations or wealthy individuals Obama courts, makes it possible for him to overcome the disabling (and largely unrequited) “bipartisanship” that usually governs his political maneuvering, especially when, as in this case, substantial majorities are on board.  And so Obama has and likely will again “give” something to this part of his base, to the great approbation of his otherwise taken for granted supporters.  Bush had to deal with a far more retrograde – and intolerant – base.  That, more than anything else, explains why, in this respect at least, Obama is better than Bush.

However, it seems that, in general, Bush at least believed in what he did; he didn’t know better.   It is hard to think the same of someone of Obama’s intelligence, education and experience of the world.  And although there was nothing in the record, beyond “paling around with terrorists,” that his enemies could use against him in 2008, there was enough to suggest to those who were determined to think well of him that Obama’s views, however compromised, were at least reasonable and humane.  Yet, on almost every front, he has taken up where Bush left off.   Bush was a simpleton – morally and intellectually.  Obama is a knave.  One needn’t be an old-fashioned moralist to think knavery worse.

*                           *

But that is a moral reproach, and the question posed at the outset is about politics, not ethics.  It does not call for passing judgment on the man so much as for reflecting on how much better or worse it is having Obama, rather than Bush, in office.  To address that question properly, we need to take into account not just the effects of the Obama presidency on the interests of his core constituencies, but also on their capacity to work for “change.”  From that vantage point, it doesn’t look good for Obama.

We have wars aplenty – in Iraq and Afghanistan, in Libya, and with varying degrees of openness and intensity in Yemen, Somalia  and Pakistan and who knows where else.  Yet we have no peace movement to speak of, not even to the extent we did in 2006.  Wall street continues to bring ruin to the bottom 98 per cent of the population, but there is no opposition strong enough to stop the predators in their tracks.  Our government has given the nuclear industry license to play Russian roulette with the future of the planet, and the opposition has largely acquiesced.  The administration’s other energy policies are outrageous too, and its heedlessness of urgent environmental concerns is staggering. Worst of all, organized labor is more on the ropes than ever, despite overwhelming popular support for unions and union rights.  In these and other ways, there is, as Brecht said of pre-War Germany, only injustice and no resistance.

It would be different if Bush were still in charge.  No matter how cowardly Democrats are and no matter how servile corporate media may be, there would be more resistance than there now is, just as there was before Obama became President.  Obama rode liberal discontent into the White House and then, deliberately or not, he put the fire out of liberal bellies.  That’s what disappointment and disillusion does when the potential opposition is riddled with people determined to keep on cutting the man endless slack. 

Part of the reason for their debilitating passivity is fear of the Tea Party/Republican alternative, a fear stoked relentlessly by Obama apologists and Democratic Party cheerleaders.  But fear-mongering is a two-edged sword.  At the same time that it encourages standing by the devil we know, it also makes plain how pitiful Obama’s opposition in the 2012 election will likely be.  That awareness can undo the caution that currently afflicts the political scene.  

Yes, the economy is in poor shape and Obama is widely (and correctly) thought to be partly to blame.  And, yes, for an incumbent, that should be a cause for concern.   But perhaps not so much when, as in Margaret Thatcher’s expression, there is no (remotely plausible) alternative.  This is why conditions are ripe for forcing change upon the powers that be.  But it isn’t happening with the intensity it should.  Indeed, the most fervent resistance these days is coming from the right, which opposes Obama for all the wrong reasons.  How pathetic is that!  And how urgent that it change!

Is Obama still better than Bush?  The bar is so low that the answer may still be Yes.  But it’s looking increasingly like maybe not.  And it is becoming plainer still that being better than Bush isn’t all that it was cracked up to be.

Too Big to Fail, Too Conflicted to Govern

Shameless on the Hill
By RUSSELL MOKHIBER

At a hearing on Capitol Hill this week on "too big to fail" banks, both corporate parties were posturing.

Strutting their stuff.

Ripping into each other.

But the reality?

When push came to shove, both didn't have the guts to do the right thing to prevent another bailout.

That would be – limit the size of the big banks so that they are no longer "too big to fail."

"Too big to fail" means exactly that.

The banks are too big to fail.

If they fail, we must bail them out.

Or the economy goes down in a spectacular flameout.

The six biggest banks in America?

Wells Fargo.

Citibank.

Bank of America.

JP Morgan Chase.

Morgan Stanley.

Goldman Sachs.

Together, they control assets equal to about 65 of GDP.

Twenty years ago, that number was about 15 percent of GDP.

The hearing yesterday was held by a House Financial Services Committee subcommittee chaired by Congresswoman Shelley Moore Capito (R-West Virginia).

Before the hearing got started, Public Citizen was passing out a letter calling on Capito to formally disclose that her husband now works for one of the those too big to fail banks – Wells Fargo.

She has so far refused to do so.

But the conflicts on the committee on both sides of the aisle are deeper than the horse crap at the back of any barn in Capito's Second Congressional District of West Virginia.

True, the Republican side is marinated in Wall Street cash.

Just as an example, Capito's number one contributor over her career is from another one of the too big to fail banks – Citibank.

But the Democrats are marinated in Wall Street cash too.

And therefore the hypocrisy on the Democratic side is as deep – maybe deeper – than the conflicts.

The best in show winner for posturing was Congressman Luis Gutierrez (D-NY).

Gutierrez used his five minutes to rip into the Republicans for being the party of Wall Street.

He ended pointing at his Republican colleagues and saying – "You should just tell people you're for big banks and make it clear and simple."

Then he got up and left.

Didn't want to contemplate of the hypocrisy of it all.

But Congressman Brad Miller (D-North Carolina) was shameless.

Miller understands – as does almost everyone on the committee – that the way you deal with the problem of too big to fail banks is to limit their size so that they are no longer too big to fail.

There actually was a vote on the Senate side in 2008 on an amendment – the Brown-Kaufman amendment – that would have done the trick.

Miller introduced a similar amendment in the House.

Miller put it this way:

"Senator Kaufman introduced an amendment on the Senate side that failed, that would limited the overall size of those -- of banks to 2 percent of the GDP. That's still like a $300 billion company. That's a pretty big -- pretty big bank, big enough to do pretty much anything, but it would have required that the six biggest firms be broken up into more than 30 banks."

"No Republican support for that law," Miller said. "I introduced the idea on the House side, but the fight was really over on the Senate side."

What is Congressman Miller not telling us?

He is not telling us that the Brown/Kaufman amendment was defeated by President Obama and his Secretary of Treasury Tim Geithner.

Neil Barofsky, who was the Special Inspector General for the TARP, told Corporate Crime Reporter last week that the Brown Kaufman amendment would have passed had the Obama administration gotten behind it.

Instead, Treasury Secretary Geithner lobbied against the bill.

"The reason it didn't pass was because the Treasury Secretary lobbied individual Senators to convince them to vote against this bill," Barofsky said.

And what is the result of that vote?

"The largest banks are now 20 percent larger today than they were going into the crisis," Barofsky said. "They are systemically more significant, they are bigger, they are more important. And we just haven't seen the political or regulatory will to take on the fundamental problems that are presented by these institutions."

"Standard and Poors recently put the U.S. government's credit rating on watch. And one of the things they talked about was the contingent liability to support our financial institutions. And they estimated that the up front costs of another bailout could be up to $5 trillion."

"And when you think about the focus on our budget issues, our deficit and our debt – what happens with the next crisis and we have to come up with another $5 trillion to bail out our system once again?"

"It's a terrifying concept. One of TARP's biggest legacies is that it emphasized to the market that the government would not let these largest banks fail. And we haven't done anything to address this problem. So, we are going to be right back where we were in late 2008 – if not in a worse position."

Why the Democratic Party Has Abandoned the Middle Class in Favor of the Rich

If politicians care almost exclusively about the concerns of the rich, it makes sense that over the past decades they've enacted policies that have ended up benefiting the rich.

By Kevin Drum, Mother Jones
Posted on May 30, 2011

The following article first appeared in Mother Jones.

In 2008, a liberal Democrat was elected president. Landslide votes gave Democrats huge congressional majorities. Eight years of war and scandal and George W. Bush had stigmatized the Republican Party almost beyond redemption. A global financial crisis had discredited the disciples of free-market fundamentalism, and Americans were ready for serious change.
Or so it seemed. But two years later, Wall Street is back to earning record profits, and conservatives are triumphant. To understand why this happened, it's not enough to examine polls and tea parties and the makeup of Barack Obama's economic team. You have to understand how we fell so short, and what we rightfully should have expected from Obama's election. And you have to understand two crucial things about American politics.

The first is this: Income inequality has grown dramatically since the mid-'70s—far more in the US than in most advanced countries—and the gap is only partly related to college grads outperforming high-school grads. Rather, the bulk of our growing inequality has been a product of skyrocketing incomes among the richest 1 percent and—even more dramatically—among the top 0.1 percent. It has, in other words, been CEOs and Wall Street traders at the very tippy-top who are hoovering up vast sums of money from everyone, even those who by ordinary standards are pretty well off.

Second, American politicians don't care much about voters with moderate incomes. Princeton political scientist Larry Bartels studied the voting behavior of US senators in the early '90s and discovered that they respond far more to the desires of high-income groups than to anyone else. By itself, that's not a surprise. He also found that Republicans don't respond at all to the desires of voters with modest incomes. Maybe that's not a surprise, either. But this should be: Bartels found that Democratic senators don't respond to the desires of these voters, either. At all.

It doesn't take a multivariate correlation to conclude that these two things are tightly related: If politicians care almost exclusively about the concerns of the rich, it makes sense that over the past decades they've enacted policies that have ended up benefiting the rich. And if you're not rich yourself, this is a problem. First and foremost, it's an economic problem because it's siphoned vast sums of money from the pockets of most Americans into those of the ultrawealthy. At the same time, relentless concentration of wealth and power among the rich is deeply corrosive in a democracy, and this makes it a profoundly political problem as well.

How did we get here? In the past, after all, liberal politicians did make it their business to advocate for the working and middle classes, and they worked that advocacy through the Democratic Party. But they largely stopped doing this in the '70s, leaving the interests of corporations and the wealthy nearly unopposed. The story of how this happened is the key to understanding why the Obama era lasted less than two years.

About a year ago, the Pew Research Center looked looked at the sources reporters used for stories on the economy. The White House and members of Congress were often quoted, of course. Business leaders. Academics. Ordinary citizens. If you're under 40, you may not notice anything amiss. Who else is missing, then? Well: "Representatives of organized labor unions," Pew found, "were sources in a mere 2% of all the economy stories studied."

It wasn't always this way. Union leaders like John L. Lewis, George Meany, and Walter Reuther were routine sources for reporters from the '30s through the '70s. And why not? They made news. The contracts they signed were templates for entire industries. They had the power to bring commerce to a halt. They raised living standards for millions, they made and broke presidents, and they formed the backbone of one of America's two great political parties.

They did far more than that, though. As historian Kim Phillips-Fein puts it, "The strength of unions in postwar America had a profound impact on all people who worked for a living, even those who did not belong to a union themselves." (Emphasis mine.) Wages went up, even at nonunion companies. Health benefits expanded, private pensions rose, and vacations became more common. It was unions that made the American economy work for the middle class, and it was their later decline that turned the economy upside-down and made it into a playground for the business and financial classes.

Technically, American labor began its ebb in the early '50s. But as late as 1970, private-sector union density was still more than 25 percent, and the absolute number of union members was at its highest point in history. American unions had plenty of problems, ranging from unremitting hostility in the South to unimaginative leadership almost everywhere else, but it wasn't until the rise of the New Left in the '60s that these problems began to metastasize.

The problems were political, not economic. Organized labor requires government support to thrive—things like the right to organize workplaces, rules that prevent retaliation against union leaders, and requirements that management negotiate in good faith—and in America, that support traditionally came from the Democratic Party. The relationship was symbiotic: Unions provided money and ground game campaign organization, and in return Democrats supported economic policies like minimum-wage laws and expanded health care that helped not just union members per se—since they'd already won good wages and benefits at the bargaining table—but the interests of the working and middle classes writ large.

But despite its roots in organized labor, the New Left wasn't much interested in all this. As the Port Huron Statement, the founding document of Students for a Democratic Society, famously noted, the students who formed the nucleus of the movement had been "bred in at least modest comfort." They were animated not by workplace safety or the cost of living, but first by civil rights and antiwar sentiment, and later by feminism, the sexual revolution, and environmentalism. They wore their hair long, they used drugs, and they were loathed by the mandarins of organized labor.

By the end of the '60s, the feeling was entirely mutual. New Left activists derided union bosses as just another tired bunch of white, establishment Cold War fossils, and as a result, the rupture of the Democratic Party that started in Chicago in 1968 became irrevocable in Miami Beach four years later. Labor leaders assumed that the hippies, who had been no match for either Richard Daley's cops or establishment control of the nominating rules, posed no real threat to their continued dominance of the party machinery. But precisely because it seemed impossible that this motley collection of shaggy kids, newly assertive women, and goo-goo academics could ever figure out how to wield real political power, the bosses simply weren't ready when it turned out they had miscalculated badly. Thus George Meany's surprise when he got his first look at the New York delegation at the 1972 Democratic convention. "What kind of delegation is this?" he sneered. "They've got six open fags and only three AFL-CIO people on that delegation!"

But that was just the start. New rules put in place in 1968 led by almost geometric progression to the nomination of George McGovern in 1972, and despite McGovern's sterling pro-labor credentials, the AFL-CIO refused to endorse him. Not only were labor bosses enraged that the hippies had thwarted the nomination of labor favorite Hubert Humphrey, but amnesty, acid, and abortion were simply too much for them. Besides, Richard Nixon had been sweet-talking them for four years, and though relations had recently become strained, he seemed not entirely unsympathetic to the labor cause. How bad could it be if he won reelection?

Plenty bad, it turned out—though not because of anything Nixon himself did. The real harm was the eventual disaffection of the Democratic Party from the labor cause. Two years after the debacle in Miami, Nixon was gone and Democrats won a landslide victory in the 1974 midterm election. But the newly minted members of Congress, among them former McGovern campaign manager Gary Hart, weren't especially loyal to big labor. They'd seen how labor had treated McGovern, despite his lifetime of support for their issues.

The results were catastrophic. Business groups, simultaneously alarmed at the expansion of federal regulations during the '60s and newly emboldened by the obvious fault lines on the left, started hiring lobbyists and launching political action committees at a torrid pace. At the same time, corporations began to realize that lobbying individually for their own parochial interests (steel, sugar, finance, etc.) wasn't enough: They needed to band together to push aggressively for a broadly pro-business legislative environment. In 1971, future Supreme Court justice Lewis Powell wrote his now-famous memo urging the business community to fight back: "Strength lies in organization," he wrote, and would rise and fall "through joint effort, and in the political power available only through united action and national organizations." Over the next few years, the Chamber of Commerce morphed into an aggressive and highly politicized advocate of business interests, conservative think tanks began to flourish, and more than 100 corporate CEOs banded together to found a pro-market supergroup, the Business Roundtable.

They didn't have to wait long for their first big success. By 1978, a chastened union movement had already given up on big-ticket legislation to make it easier to organize workplaces. But they still had every reason to think they could at least win passage of a modest package to bolster existing labor law and increase penalties for flouting rulings of the National Labor Relations Board. After all, a Democrat was president, and Democrats held 61 seats in the Senate. So they threw their support behind a compromise bill they thought the business community would accept with only a pro forma fight.

Instead, the Business Roundtable, the US Chamber of Commerce, and other business groups declared war. Organized labor fought back with all it had—but that was no longer enough: The bill failed in the Senate by two votes. It was, said right-wing Sen. Orrin Hatch (R-Utah), "a starting point for a new era of assertiveness by big business in Washington." Business historian Kim McQuaid put it more bluntly: 1978, he said, was "Waterloo" for unions.
Organized labor, already in trouble thanks to stagflation, globalization, and the decay of manufacturing, now went into a death spiral. That decline led to a decline in the power of the Democratic Party, which in turn led to fewer protections for unions. Rinse and repeat. By the time both sides realized what had happened, it was too late—union density had slumped below the point of no return.

Why does this matter? Big unions have plenty of pathologies of their own, after all, so maybe it's just as well that we're rid of them. Maybe. But in the real world, political parties need an institutional base. Parties need money. And parties need organizational muscle. The Republican Party gets the former from corporate sponsors and the latter from highly organized church-based groups. The Democratic Party, conversely, relied heavily on organized labor for both in the postwar era. So as unions increasingly withered beginning in the '70s, the Democratic Party turned to the only other source of money and influence available in large-enough quantities to replace big labor: the business community. The rise of neoliberalism in the '80s, given concrete form by the Democratic Leadership Council, was fundamentally an effort to make the party more friendly to business. After all, what choice did Democrats have? Without substantial support from labor or business, no modern party can thrive.

It's important to understand what happened here. Entire forests have been felled explaining why the working class abandoned the Democratic Party, but that's not the real story. It's true that Southern whites of all classes have increasingly voted Republican over the past 30 years. But working-class African Americans have been (and remain) among the most reliable Democratic voters, and as Larry Bartels has shown convincingly, outside the South the white working class has not dramatically changed its voting behavior over the past half-century. About 50 percent of these moderate-income whites vote for Democratic presidential candidates, and a bit more than half self-identify as Democrats. These numbers bounce up and down a bit (thus the "Reagan Democrat" phenomenon of the early '80s), but the overall trend has been virtually flat since 1948.

In other words, it's not that the working class has abandoned Democrats. It's just the opposite: The Democratic Party has largely abandoned the working class.

Here's why this is a big deal. Progressive change in the United States has always come in short, intense spurts: The Progressive Era lasted barely a decade at the national level, the New Deal saw virtually all of its legislative activity enacted within the space of six years between 1933 and 1938, and the frenzy of federal action associated with the '60s nearly all unfolded between 1964 and 1970. There have been exceptions, of course: The FDA was created in 1906, the GI Bill was passed in 1944, and the Americans with Disabilities Act was passed in 1990. And the courts have followed a schedule all their own. Still, one striking fact remains: Liberal reform is not a continuous movement powered by mere enthusiasm. Reform eras last only a short time and require extraordinarily intense levels of cultural and political energy to get started. And they require two other things to get started: a Democratic president and a Democratic Congress.

In 2008, fully four decades after our last burst of liberal change, we got that again. But instead of five or six tumultuous years, the surge of liberalism that started in 2008 lasted scarcely 18 months and produced only two legislative changes really worthy of note: health care reform and the repeal of Don't Ask, Don't Tell. By the summer of 2010 liberals were dispirited, political energy had been co-opted almost entirely by the tea party movement, and in November, Republicans won a crushing victory.

Why? The answer, I think, is that there simply wasn't an institutional base big enough to insist on the kinds of political choices that would have kept the momentum of 2008 alive. In the past, blue-collar workers largely took their cues on economic policy from meetings in union halls, and in turn, labor leaders gave them a voice in Washington.

This matters, as Jacob Hacker and Paul Pierson argue in one of last year's most important books, Winner-Take-All Politics, because politicians don't respond to the concerns of voters, they respond to the organized muscle of institutions that represent them. With labor in decline, both parties now respond strongly to the interests of the rich—whose institutional representation is deep and energetic—and barely at all to the interests of the working and middle classes.

This has produced three decades of commercial and financial deregulation that started during the administration of a Democrat, Jimmy Carter, gained steam throughout the Reagan era, and continued under Bill Clinton. There were a lot of ways America could have responded to the twin challenges of '70s-era stagflation and the globalization of finance, but the policies we chose almost invariably ignored the stagnating wages of the middle class and instead catered to the desires of the superrich: hefty tax cuts on both high incomes and capital gains. Deregulation of S&Ls (PDF) that led to extensive looting and billions in taxpayer losses.

Monetary policy focused excessively on inflation instead of employment levels. Tacit acceptance of asset bubbles as a way of maintaining high economic growth. An unwillingness to regulate financial derivatives that led to enormous Wall Street profits and contributed to the financial crisis of 2008. At nearly every turn, corporations and the financial industry used their institutional muscle to get what they wanted, while the working class sat by and watched, mostly unaware that any of this was even happening.

It's impossible to wind back the clock and see what would have happened if things had been different, but we can take a pretty good guess. Organized labor, for all its faults, acted as an effective countervailing power for decades, representing not just its own interests, but the interests of virtually the entire wage-earning class against the investor class. As veteran Washington Post reporter David Broder wrote a few years ago, labor in the postwar era "did not confine itself to bread-and-butter issues for its own members. It was at the forefront of battles for aid to education, civil rights, housing programs and a host of other social causes important to the whole community. And because it was muscular, it was heard and heeded." If unions had been as strong in the '80s and '90s as they were in the '50s and '60s, it's almost inconceivable that they would have sat by and accepted tax cuts and financial deregulation on the scale that we got. They would have demanded economic policies friendlier to middle-class interests, they would have pressed for the appointment of regulators less captured by the financial industry, and they would have had the muscle to get both.

And that means things would have been different during the first two years of the Obama era, too. Aside from the question of whether the crisis would have been so acute in the first place, a labor-oriented Democratic Party almost certainly would have demanded a bigger stimulus in 2009. It would have fought hard for "cramdown" legislation to help distressed homeowners, instead of caving in to the banks that wanted it killed. It would have resisted the reappointment of Ben Bernanke as Fed chairman. These and other choices would have helped the economic recovery and produced a surge of electoral energy far beyond Obama's first few months. And since elections are won and lost on economic performance, voter turnout, and legislative accomplishments, Democrats probably would have lost something like 10 or 20 seats last November, not 63. Instead of petering out after 18 months, the Obama era might still have several years to run.

This is, of course, pie in the sky. Organized labor has become a shell of its former self, and the working class doesn't have any institutional muscle in Washington. As a result, the Democratic Party no longer has much real connection to moderate-income voters. And that's hurt nearly everyone.

If unions had remained strong and Democrats had continued to vigorously press for more equitable economic policies, middle-class wages over the past three decades likely would have grown at about the same rate as the overall economy—just as they had in the postwar era. But they didn't, and that meant that every year, the money that would have gone to middle-class wage increases instead went somewhere else. This created a vast and steadily growing pool of money, and the chart below gives you an idea of its size. It shows how much money would have flowed to different groups if their incomes had grown at the same rate as the overall economy. The entire bottom 80 percent now loses a collective $743 billion each year, thanks to the cumulative effect of slow wage growth. Conversely, the top 1 percent gains $673 billion. That's a pretty close match. Basically, the money gained by the top 1 percent seems to have come almost entirely from the bottom 80 percent.

And what about those in the 80th to 99th percentile? They didn't score the huge payoffs of the superrich, but they did okay, basically keeping up with economic growth. Yet the skyrocketing costs of things like housing and higher education (PDF) make this less of a success story than it seems. And there's been a bigger cost as well: It turns out that today's upper-middle-class families lead a much more precarious existence than raw income figures suggest.

Jacob Hacker demonstrated this persuasively in The Great Risk Shift, which examined the ways in which financial risk has increasingly been moved from corporations and the government onto individuals. Income volatility, for example, has risen dramatically over the past 30 years. The odds of experiencing a 50 percent drop in family income have more than doubled since 1970, and this volatility has increased for both high school and college grads. At the same time, traditional pensions have almost completely disappeared, replaced by chronically underfunded 401(k) plans in which workers bear all the risk of stock market gains and losses. Home foreclosures are up (PDF), Americans are drowning in debt, jobs are less secure, and personal bankruptcies have soared (PDF). These developments have been disastrous for workers at all income levels.

This didn't all happen thanks to a sinister 30-year plan hatched in a smoke-filled room, and it can't be reined in merely by exposing it to the light. It's a story about power. It's about the loss of a countervailing power robust enough to stand up to the influence of business interests and the rich on equal terms. With that gone, the response to every new crisis and every new change in the economic landscape has inevitably pointed in the same direction. And after three decades, the cumulative effect of all those individual responses is an economy focused almost exclusively on the demands of business and finance. In theory, that's supposed to produce rapid economic growth that serves us all, and 30 years of free-market evangelism have convinced nearly everyone—even middle-class voters who keep getting the short end of the economic stick—that the policy preferences of the business community are good for everyone. But in practice, the benefits have gone almost entirely to the very wealthy.

It's not clear how this will get turned around. Unions, for better or worse, are history. Even union leaders don't believe they'll ever regain the power of their glory days. If private-sector union density increased from 7 percent to 10 percent, that would be considered a huge victory. But it wouldn't be anywhere near enough to restore the power of the working and middle classes.

And yet: The heart and soul of liberalism is economic egalitarianism. Without it, Wall Street will continue to extract ever vaster sums from the American economy, the middle class will continue to stagnate, and the left will continue to lack the powerful political and cultural energy necessary for a sustained period of liberal reform. For this to change, America needs a countervailing power as big, crude, and uncompromising as organized labor used to be.

But what?

Over the past 40 years, the American left has built an enormous institutional infrastructure dedicated to mobilizing money, votes, and public opinion on social issues, and this has paid off with huge strides in civil rights, feminism, gay rights, environmental policy, and more. But the past two years have demonstrated that that isn't enough. If the left ever wants to regain the vigor that powered earlier eras of liberal reform, it needs to rebuild the infrastructure of economic populism that we've ignored for too long. Figuring out how to do that is the central task of the new decade.