Testicular Politics: Obama Is Getting Punked By the Big Dogs of Banking,
Does He Have the Balls to Do What's Right?
By William Greider,
The Nation. April 24, 2009.
What we are witnessing is a high-stakes melodrama of glandular politics.
Will Obama roll over or fight back?
The big dogs of banking and finance are playing a rough game of bump-and-run
with our president, trying to knock him off balance and demonstrate their
dominance. The best names in Wall Street -- Goldman Sachs, JPMorgan Chase --
pumped out happy talk about quarterly earnings, then announced that they
intend to give back the government's money (more than $50 billion, if
counted honestly). The crisis, they announce, is over for them. They want to
be free of official meddling in their private affairs. The arrogance is
breathtaking, even for Wall Street bankers.
Forget the financial numbers. What we are witnessing is a high-stakes
melodrama of glandular politics. This rival power center, though gravely
weakened, is contesting for control with the president. Think of dogs
circling one another to establish who will be leader of the pack. For three
decades, the Wall Street guys in good suits have ruled the economy,
demanding deference from the political system and from corporate
managements, too. Those who failed to follow them were punished, either
through stock prices or election financing. Despite their catastrophic
failure, the surviving bankers and financiers are trying to hold on to their
thrones.
For the last couple of weeks, they have poked the kid in the chest and
mocked his economic advisors with condescending gestures. Jamie Dimon of the
Morgan bank handed Treasury Secretary Geithner a fake check for $25 billion.
They threw complicating wrenches into the government's financial rescue
plan. Their essential message, crudely colloquial, was intended for Barack
Obama : "You don't have the balls to take charge of us."
The question is: Are they right? Obama seems cowed by their bluster. He
certainly looks reluctant to take them on in a public way or refute their
version of reality. This president wants to govern through public-spirited
cooperation. The financial titans play hardball in return. I say "seems"
because we do not yet know about Obama and how he will resolve this mess.
The administration has been stalling action on the troubled banks, as if it
believes in its own wishful forecasts about an early recovery for the
economy. The bankers trumped him by announcing, hey, things are already
better for us. So back off.
The bankers think they have the president cornered. His rescue plan cannot
possibly succeed without much more money -- hundreds of billions more --
that Congress will be extremely reluctant to provide (Obama hasn't yet had
the nerve to ask for it). The bankers' offer to return their welfare checks
is a cute gesture, but a bluff. They know Obama's government is committed to
save them, whatever it costs. As usual, the big dogs want to have it both
ways -- take the public's money but promise nothing in return.
Roughly speaking, that has been Obama's posture, too. He acts as though
the old order must be restored with public money, but without forceful
government direction. He can call their bluff if he has the courage -- shut
down a couple of big banks, take control of the system -- and the public
would cheer. During the campaign, Obama demonstrated he is a great
teacher -- his political vision changed the country. But we do not yet know
if he is a confident political leader willing to use his power against
formidable adversaries in order to get his way. Every potential rival is now
taking his measure. Weakness would doom him.
The financial crisis poses the first great moral dilemma of the Obama
presidency. Sometime in the next few months, he will be compelled to choose
between his technocratic inclinations -- rescuing certain financial
institutions deemed "too big to fail" -- and the obvious moral wrongness of
his policy of rewarding the very players who caused our national disaster.
The broad public does not doubt that this is morally wrong. I saw a Zogby
opinion poll the other day that said only 6 percent of the public supports
the financial bailouts. Obama is on the wrong side of that bipartisan
consensus.
The moral dilemma in the financial crisis is oddly parallel to Obama's
reluctant approach on the torture issue. The president bravely made public
the sickening documents from the Bush administration that reveal how CIA and
Justice Department officials rationalized their illegalities and authorized
crimes against humanity. Yet the president said it would be wrong to
prosecute (or even investigate) any of the CIA agents or military officers
who committed these crimes. Likewise, we are told it would be wrong to
punish the financial malefactors or look too closely into how they
engineered the gross fraud and false valuations that destroyed trillions of
dollars in American wealth. Let's not dwell on the past, the president says,
let's look forward.
But everything Obama does now -- or fails to do -- becomes an inescapable
precedent for the future, defining the true meaning of law and moral
principle. The president's rationale on government-led torture sounds
dangerously close to the line of defense invoked by Nazi war criminals at
Nuremberg. We were only following orders. CIA barbarians are invited to hide
behind that excuse.
So in a sense are the bankers from Wall Street. They were merely doing
what the financial markets wanted and what the government allowed. Rescuing
these players now, while declining to force fundamental structural changes
on the banking system, would essentially ratify the bankers' arrogant
beliefs. They are too important to fail. The government will never let it
happen. Despite their destructive behavior, they will be allowed to remain
in power and free to do it all again.
I do not doubt the president's good intentions, but if he is not vigilant,
the "Obama precedent" could prove to be an ugly legacy. His name might
someday be linked to wilful evasion of misdeeds and the degradation of law
and moral principle. When great crimes are committed in the future by
government or by powerful private interests, people in authority might
decide to let them go by, citing the national interest and recalling how
Barack Obama dealt with similar events.
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