TGP sez: As long as the media remain in corporate hands, most Americans will remain confused and disorganized. Meanwhile, the Obama cheering gallery of big liberal blogs like Daily Kos and Smirking Chimp, and fundraising shills like Moveon.org, are not helping.
By David Sirota [print_link]
Bernanke-the teflon finance czar.
Washington’s favorite term these days is “moral hazard.” Though this buzzphrase may seem like a complex and even intimidating idea, most of us, whether we consciously or not, understand the principle because it’s basic common sense.
Applaud your kid for punching another kid—rather than grounding him—and you’ve created a moral hazard that means he’ll probably punch other kids in the future. Give your dog a treat—rather than a scolding—after he urinates in the house, and the moral hazard you’ve engineered makes it likely you’ll soon be cleaning up even more sallow stains on your rug. In short, without consequences—or worse, with rewards—for wrongdoing, there is an incentive to do wrong. That’s moral hazard.
To date, the national discussion about this concept has revolved specifically around financial moral hazard. And, as evidenced by trillions of dollars in public loans, guarantees and subsidies given to speculators to cover their massive losses, leaders in both political parties have no interest in preventing financial moral hazard—despite stern press releases insisting the contrary. By rewarding rather than punishing Wall Street for losing irresponsibly risky bets and by holding out the promise of similar bailout rewards in the future, politicians have incentivized even more irresponsible risk-taking for years to come.
But financial moral hazard is only half the story. The other half is political moral hazard—the mother of all other moral hazards.
Consider, for instance, Federal Reserve Chairman Ben Bernanke. He’s the top regulator who not only sowed financial moral hazard with the Fed’s post-meltdown bailouts, but openly admits that as the crisis developed, his Federal Reserve “should have done more—we should have required more capital, more liquidity (and) we should have required tougher risk management controls.”
Firing Bernanke would tell other regulators that there are consequences for negligence. Instead, President Obama rewarded Bernanke with renomination and thus manufactured a pernicious problem. As economist Dean Baker says, just as bailouts create a financial moral hazard giving speculators no incentive to avoid excessive risk, Bernanke’s renomination creates a political moral hazard whereby regulators “will not have an incentive to do their jobs properly (because) there are no consequences” for failure.
The Democratic Congress, of course, could reject Bernanke’s nomination for being “the definition of moral hazard,” as Republican Sen. Jim Bunning, Ky., correctly noted. But that seems unlikely, considering how many Democrats have been aggressively embracing moral hazard.
When Senate Democrats ratified Obama’s nomination of New York Fed chief Tim Geithner as Treasury secretary, they rewarded yet another shill who also fell down on the regulatory job. When those same Senate Democrats considered the nomination of Gary Gensler to head the agency regulating derivatives, they could have rejected him for championing derivatives deregulation as a Clinton official and then cashing in as a Goldman Sachs executive. Instead, Democrats backed his nomination and effectively told every other Gary Gensler-like parasite that misguided actions and corruption don’t prevent future promotion.
And let’s be fair—it’s not just Democratic politicians who are creating political moral hazard. Many Democratic pundits, activists and voters continued cheering on President Obama while he stuffed his administration full of Wall Streeters—and many of these rank-and-file voices attacked as disloyal those progressives who raised questions. That told Obama he faces few consequences—and even defense—from his own base for promoting those who engineered the economic meltdown.
The only open question is whether the public at large becomes complicit, too. Come election day, if there are no consequences at the ballot box for the politicians—Democrat or Republican—who legislated bailouts, supported these appointments and are now working to undermine proposed Wall Street reforms, then America will have created the biggest moral hazard of all.
David Sirota is a senior editor at In These Times and author of the bestselling books The Uprising and Hostile Takeover. He hosts the morning show on AM760 in Colorado and blogs at OpenLeft.com. E-mail him at ds@davidsirota.com.
All’s well in this best of all possible worlds: a nation of Candides
By Anis Shivani, In These Times
Printed on December 13, 2009
CROSSPOST WITH http://www.alternet.org/story/144114/
In her new book Bright-Sided: How the Relentless Promotion of Positive Thinking Has Undermined America (Metropolitan/Holt, October 2009), Barbara Ehrenreich traces the origins of contemporary optimism from nineteenth-century healers to twentieth-century pushers of consumerism. She explores how that culture of optimism prevents us from holding to account both corporate heads and elected officials.
Manufactured optimism has become a method to make the poor feel guilty for their poverty, the ill for their lack of health and the victims of corporate layoffs for their inability to find worthwhile jobs. Megachurches preach the “gospel of prosperity,” exhorting poor people to visualize financial success. Corporations have abandoned rational decision-making in favor of charismatic leadership.
This mania for looking on the bright side has given us the present financial collapse; optimistic business leaders — assisted by rosy-eyed policymakers — made very bad decisions.
In These Times recently spoke with her about our penchant for foolish optimism.
Anis Shivani: Is promoting optimism a mechanism of social control to keep the system in balance?
Barbara Ehrenreich: If you want to have a compliant populace, what could be better than to say that everyone has to think positively and accept that anything that goes wrong in their lives is their own fault because they haven’t had a positive enough attitude? However, I don’t think that there is a central committee that sits there saying, “This is what we want to get people to believe.”
It took hold in the United States because in the ’80s and ’90s it became a business. You could write a book like Who Moved My Cheese?, which is a classic about accepting layoffs with a positive attitude. And then you could count on employers to buy them up and distribute them free to employees.
AS: So this picks up more in the early ’80s and even more so in the ’90s when globalization really took off?
BE: I was looking at the age of layoffs, which begins in the ’80s and accelerates. How do you manage a workforce when there is no job security? When there is no reward for doing a good job? When you might be laid off and it might not have anything to do with performance? As that began to happen, companies began to hire motivational speakers to come in and speak to their people.
AS: Couldn’t this positive thinking be what corporate culture wants everyone to believe, but at the top, people are still totally rational?
BE: That is what I was assuming when I started this research. I thought, “It’s got to be rational at the top. Someone has to keep an eye on the bottom line.” Historically, the science of management was that in a rational enterprise, we have spreadsheets, we have decision-trees and we base decisions on careful analysis.
But then all that was swept aside for a new notion of what management is about. The word they use is “leadership.” The CEO and the top people are not there so much to analyze and plan but to inspire people. They claimed to have this uncanny ability to sense opportunities. It was a shock, to find the extent to which corporate culture has been infiltrated not only by positive thinking, but by mysticism. The idea is that now things are moving so fast in this era of globalization, that there’s no time to think anymore. So you increasingly find CEOs gathering in sweat lodges or drumming circles or going on “vision quests” to get in touch with their inner-Genghis Khan or whatever they were looking for.
AS: The same things are happening in foreign policy. We’ve abandoned a sense of realism. You had this with Bush and also with Obama, although he is more realistic. Is there a connection between optimism and the growth of empire?
BE: In the ’80s, Reagan promoted the [old] idea that America is special and that Americans were God’s chosen people, destined to prosper, much to the envy of everybody else in the world. Similarly, Bush thought of himself as the optimist-in-chief, as the cheerleader — which had been his job once in college. This is very similar to how CEOs are coming to think of themselves: as people whose job is to inspire others to work harder for less pay and no job security.
AS: Would you say that Obama is our cheerleader-in-chief?
BE: I haven’t sorted it out. He talks a lot about hope. And as a citizen I’d rather not hear about “hope,” I’d rather hear about “plans.” Yet he does strike me as a rational person, who thinks through all possibilities and alternatives.
AS: You write about the science of positive thinking having taken root at Ivy League universities. It’s amazing to me that a course in happiness at Harvard would draw almost 900 students.
BE: That was in 2006. And these courses have spread all over the country — courses in positive psychology where you spend time writing letters of gratitude to people in your family, letters of forgiveness (whether or not you send them doesn’t matter), getting in touch with your happy feelings, and I don’t think that’s what higher education should be about. People go to universities to learn critical thinking, and positive thinking is antithetical to critical thinking.
AS: You have written a lot about Calvinism. Is it correct to say you have a deep problem with Calvinism?
BE: In exploring why America became the birthplace of positive thinking, I come up with an explanation that is quite sympathetic to the early positive thinkers. Positive thinking initially represented a revolt against the dominant Calvinist stream of Protestantism in America in the late 18th and early 19th centuries. That kind of Calvinism was driving people crazy, literally. To think that you were a sinner, that your entire existence for all eternity would be one of torment in hell. It caused depression. It caused physical ailments. It was a nightmare. So you got some people in the early- and mid- 19th century that said, “Wait a minute, things aren’t so bad.” Ralph Waldo Emerson would probably be the best known example.
AS: Couldn’t you go back farther to the Enlightenment — the ultimate optimistic philosophy? Our founding fathers were very informed by that. Is that a kind of optimism that you endorse? And ultimately what’s different between the pursuit of happiness as a manifestation of optimism and the current optimism that you’re talking about?
BE: When the founding fathers undertook the Revolutionary War, they didn’t say, “We are going to win because we are visualizing victory.” They knew perfectly well that they could lose and be hanged as traitors. It took existential courage to say: “We are going to undertake this struggle without knowing whether we will win, but we’re just going to damn well die trying.”
AS: So, where does this shift come from?
BE: The shift had a lot to do with down-sizing, when corporations grabbed onto it as a means of soothing their disgruntled workforce. The alternative is realism. Let’s think about what’s actually going on: let’s get all the data we can; see what our options are; and figure out how to solve this problem. It sounds so trite and simple-minded, but that’s not how the thinking has been.
AS: Is the progressive movement infected by bright-sidedness?
BE: Progressives are not immune to this. I remember Mike Harrington [a founder of the Democratic Socialists of America] as a public speaker and he always, always ended on an upbeat note. No matter what was going on, he would end by saying there was a huge opening for the left. Today, I don’t know if we can do it. But we have no choice but to try.
AS: You mean we need to have optimism, but grounded in reality?
BE: I don’t call it optimism. I call it determination. One of the things I’ve devoted so much time to has had to do with poverty, class and inequality. Those things are not going to go away in my lifetime, but it won’t be for my lack of trying. And that’s a different kind of spirit than optimism.
AS: Some will say your approach is rational, incremental and just not exciting. How would you respond to that?
BE: I don’t think mine is an arid, overly intellectual approach. Consider what we’re up against on the economic and environmental front. Huge numbers of people are not getting by. There are the ecological threats to the human species. Let’s do something about it. What could be more irresponsible than to say, “If we just think it’s going to be alright, it’s going to be alright.”
Dateline: 12 December 2009 [print_link]
The Nation's editor and part-owner, Katrina vanden Heuvel
By Joseph Kishore
Bristling with imperialist arrogance, Obama’s speech amounted to a full-throated defense of US aggression and a brief for the unlimited use of military violence to recolonize large parts of the world. Delivered by a president who only a week before had announced an escalation of the war in Afghanistan and Pakistan that will lead to the deaths of many thousands, the speech essentially asserted the right of the United States to invade any country in the world.
“The instruments of war do have a role to play in preserving the peace,” Obama insisted. The US, he said, has the right to “act unilaterally if necessary” and to launch wars whose purpose “extends beyond self-defense or the defense of one nation against an aggressor.” This was a reassertion of the Bush administration’s doctrine of preemptive war, which is a violation of international law.
Obama referred to the historical concept of “just war,” which maintains that wars must be waged only in self-defense, must employ proportional force and do so in a manner that avoids civilian casualties. He then said it was necessary to “think in new ways” about these notions, implying that such quaint ideas had to be rejected and the world had to accept the right of the US and other imperialist powers to inflict death and destruction on targeted populations as they saw fit.
Obama was not just defending the ongoing wars in the Persian Gulf and Central Asia. As in his December 1 West Point speech, he made clear that these are only the first of many future wars. Speaking in Oslo, he singled out as potential targets a series of countries, including Iran, North Korea, Somalia, Sudan, Congo, Zimbabwe and Myanmar.
In an implicit threat to rival powers, Obama made a point of referring to the US as “the world’s sole military superpower.”
The White House clearly decided to use Obama’s Nobel acceptance speech as an opportunity to stage an international defense of American militarism and imperialist war. It was confident that the different factions of the US political and media establishment could be brought on board behind a policy—dubbed by media commentators the “Obama Doctrine”—that both reiterates and extends that elaborated by the Bush administration.
On the right, the speech won the support of the former Republican speaker of the House of Representatives, Newt Gingrich, House Minority Leader John Boehner, Karl Rove and Sarah Palin, among others. One Republican strategist, Bradley Blakeman, remarked, “The irony is that George W. Bush could have delivered the very same speech. It was truly an American president’s message to the world.”
The Wall Street Journal wrote that the speech put paid any notion that Obama would give a “wooly-headed address about peace in our time.” Instead, Obama “stated clearly that sometimes war is necessary…”
“Congratulations, Mr. President,” wrote the organ of the Republican right.
The New York Times, the voice of American liberalism, said the speech was “appropriately humble” as well as “somber and soaring,” It drew particular attention to Obama’s defense of the war in Afghanistan as “morally just and strategically necessary.”
Hastening to align itself with the imperialist establishment and declare its support for the speech was the Nation magazine, the main organ of what passes for “left” liberalism. John Nichols, one of the magazine’s principal commentators, in a blog entry published almost immediately after the speech and featured as the lead item on the magazine’s web site, wrote that it was “an exceptionally well-reasoned and appropriately humble address.”
Nichols gushed, “The president’s frankness about the controversies and concerns regarding the award of a Peace Prize to a man who just last week ordered 30,000 US new troops into the Afghanistan quagmire, and the humility he displayed…offered a glimpse of Obama at his best.”
“As such,” he continued, “the speech was important and, dare we say, hopeful.”
In an interview on National Public Radio’s “All Things Considered” news program, the Nation’s editor, Katrina vanden Heuvel, praised the speech’s supposed “humility and grace.” The host of the show, evidently expecting more criticism, noted that vanden Heuvel “seemed to be resolving the conflict between the wartime president…and the speech about peace rather easily…”
Vanden Heuvel responded with blather about the “complexity” of American life. It was a “complex speech,” she said, and she was “interested in its complexity.”
Contrary to vanden Heuvel, there was nothing “humble” or “graceful” about Obama’s speech. Nor was it complex. It was an open brief for unrestrained aggression and colonial oppression.
There should be no confusion as to the position of the Nation and the privileged upper-middle-class layers for which the magazine speaks, including former radicals and one-time critics of US imperialism. They have moved squarely into the camp of American imperialism. They support Obama’s wars in Central Asia and Iraq and, more generally, the efforts of the United States to assert global hegemony.
In the run-up to the 2008 elections, the Nation was among the most enthusiastic supporters of the Obama campaign, presenting his victory as the first stage in a radical reform and revitalization of American democracy. It vouched for Obama’s supposedly antiwar credentials.
One year later, the candidate of “change” and “hope” presides over a right-wing administration that is expanding US military aggression while it bails out Wall Street and attacks the jobs and living standards of the working class.
The unmasking of Obama before the entire world has not in any way lessened the support he receives from the Nation. On the contrary, the coming to power of an African-American president has served as the vehicle for American liberalism, including its supposedly “left” wing, which long ago abandoned any serious reform agenda and rejected class as the basic category of social life in favor of race, gender and other categories of identity politics, to lurch further to the right.
It has provided the means by which the Nation has completed its passage into the camp of American imperialism and political reaction.
Remarking on Obama’s speech, Walter Russell Mead, the Henry Kissinger senior fellow at the Council on Foreign Relations, remarked, “If Bush had said these things the world would be filled with violent denunciations. When Obama says them, people purr.”
The “purring” of the Nation comes at a time of growing popular opposition to the Obama administration and its policies. In his speech, Obama himself made reference to the fact that his expansion of war is deeply unpopular, noting the “disconnect between the efforts of those who serve and the ambivalence of the population.” He made clear, however, that this “disconnect” will have absolutely no effect on the policy of his government.
What will happen as the “disconnect” turns into anger and opposition? How will the Nation respond? Its greatest concern is the growth of a political movement that breaks free of the Democratic Party. While it responds now with lies and political hucksterism, under different conditions the Nation will support repression—the purring kitten will turn out to have sharp claws.
The evolution of the Nation underscores the fact that a genuine movement against imperialist war must develop in opposition to the defenders of the Obama administration, the Democratic Party and American capitalism.
As the economic crisis intensifies and aggressive war expands, the working class will emerge as the leading political force in the opposition to war and imperialism. The critical task is the construction of a political leadership based on the understanding that imperialist war is rooted in the capitalist system, and that the fight against war must be an international struggle linked to the socialist reorganization of society.
Joseph Kishore is a senior political analyst with the World Socialist Web Site.
