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Last night on the Charlie Rose Show, Treasury Secretary Timothy Geithner said something that doubtless sent a shiver through financial markets. He said, “Capitalism will be different.” It is the most elegant way of putting it that we’ve heard so far.
As noted by Peter Bray on Slate this week, the White House web site has amended George W Bush’s bio. The change is a telling one, and it does make Bush look a wee tiny bit better. But why did it happen? Why that edit? I would suggest it’s a move in the same simpler direction indicated by Geithner’s comment about capitalism. Maybe it is another stride into the clear light of day.
The website used to say, “President Bush worked with the Congress to create an ownership society and build a future of security, prosperity, and opportunity for all Americans.” Now? “President Bush has worked to extend freedom, opportunity, and security at home and abroad.” What happened to our ownership society?
The change jumped out at me, because I think too much about ownership and money these days. I have a layman’s grasp of toxic assets and the exotic varieties of financial instrument that were concocted by those MBA hedge funders who allegedly created this mess with their beyond toxic mix of tremendous book smarts and nonexistent morality. That said, I have a very real understanding of my bottom line, and I don’t need an advanced degree in finance to know that it’s harder to make budget since the bottom fell out of our economy.
The hedge funders didn’t really create the problems we now face. They just took advantage of it. Reaganomics created this mess. It is the unnatural fruit of deregulation and laissez-faire economic policy. This economic crisis was built on great (and ever so colonialist) American notions like Manifest Destiny—that there was always a farther horizon to reach, and a never-ending supply of “empty” newness to fill up and commodify. As Edward Abbey once said, “Growth for the sake of growth is the ideology of the cancer cell.” He left out, “and the ideology of the Grand Ol’ Party.”
The whole notion of an ownership society is a frame that was deployed to push the largest real estate swindle since the notion of the New World was “marketed” to the inhabitants of the Americas with a combination of magic mirrors, firearms, and disease. You make more money available, and, guess what happens…. That’s right, property values increase. The more people who have more access to cheap money, the more expensive things get—things like houses and apartments; you know, real estate. If that increase in money is based on something, like, say, a tangible asset (gold will do as an example), fine. Without getting into the specifics (because I can’t in my fondest dreams), that influx of money was not anchored to Fort Knox these past thirty years.
How do you explain that the yesteryear CEO of a company the size of Johnson and Johnson made, back in the seventies, what an SVP makes today? How could the top job at a top company magically acquire a payout that boasted an additional three or four zeros? It couldn’t. Not naturally. So where did that money come from? Out of thin air. Magic money instruments. Fictions of economic theory inflicted on everyday people for the fun and profit of a miniscule segment of the population.
Does Team Obama care more about country and the office of the president than it does about the truth? Was the new administration scrubbing the office of the president clean of the filth that accumulated during the Bush years? Is this even ballpark correct regarding why they changed Bush’s bio? Am I a crazed loon who’s merely incensed about the economy? All of the above? Worse? (I’m sure I’ll find out in the comments section.)
It seems at least plausible that the whole “ownership society” thing is tainted with the Orwellian overtones of white-collar crime, and maybe that’s a little too much for us to take in just yet. (Or maybe I’m nuts—but I said that already.) Still, hard truths are best administered in small doses. Changing the wording of Bush’s bio qualifies as a small dose of truth-charged change because Bush’s ownership society was built on a Ponzi scheme.
Why the change on the White House website? The above “explanation” (we’d call it a rant around these parts) may be simplistic and peevish (even for me), but it sure did feel good to get it out of my system.
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Here’s what appears to have occurred. The hedge funders put a lot money into political campaigns and have been driving a lot of policy from behind the scenes. Look up Cerberus Capital Management, or go over to Emptywheel’s and read up on what she’s been digging up about that hedge fund. ‘White collar crime’ didn’t happen in many cases because the criminals wrote the laws, so they ensured that what they did met the letter of the law, even if they violated the spirit of the law. They’re very Rovian in that respect.
Also, remember that the TARP I was entirely under Bush/Paulson control. Bernanke didn’t really have any authority over the way it was spent or distributed — that was a Treasury/Paulson show. Look at the absence of accountability or transparency in the way that was handled. Then consider that Paulson became a Golden Boy on Wall Street because he brought derivatives to Goldman Sachs.
The next problem is that when you’re only buying and selling and hedging, you are actually creating incentives to TANK the stock prices of otherwise good companies. Once that happens and they can’t raise money in the market, then they have to borrow, which loads them down with debt.
Basically, we’ve set up a system where Wall Street was magnificently paid to take down legitimate companies. If you haven’t read George Soros’s lastest book about new Financial Paradigms, I’d highly recommend it because he’s the only one that I’ve read who really seems to be looking at the farthest edges of the curve ahead. They system that we had appears to be collapsing, although because IMHO it was corrupt and unsustainable, there’s a case to be made that this may be the best chance we have to align newer systems with better ethical conduct.
I’m increasingly convinced that Wall Street is out after Geithner because he’s got the inside view of their corruption. And they’re using every media outlet they can to whip up negative attitudes about Geithner as fast as they can.
In cased you missed this, “Economist Ha-Joon Chang on “The Myth of Free Trade and the Secret History of Capitalism“; speaks directly to your writing “because I think too much about ownership and money these days.”
thanks, a very interesting and understandable interview.
It’s NOT a Recession, it’s a Depression. Right here. Right now.
Don’t wait for the mainstream media to tell you how to define it. They waited two years to call the past Recession by its name.
The government’s numbers are all fake. ACTUAL unemployment (as measured by the same metrics used during the Great Depression) is north of 18% right now, and skyrocketing.
ACTUAL inflation of food prices is evident in every grocery store. You don’t need the government to define it for you.
ACTUAL destruction of asset values is evident in the prices paid for homes sold at auction due to foreclosure right in your own neighborhood, and in the prices actually paid for used cars like the one you presently own.
ACTUAL destruction of wages earned is evident in the reduced work-weeks and pay cuts many of your friends are now experiencing.
Welcome to the Great Bush/Cheney Depression – brought to you by the globalist banksters (Rockefeller, Inc.) who would have you believe that there are two political parties in the United States.
You’re being gamed.
You forgot the new Hooverviles as people loose their homes thats why the ownership society was taken out of Bush’s WH Bio.
Karl is doing PR clean up for Bush he does not want school kids writing about the ownership society and their parents reading their homework.
It sounds to me like we need a graphic artist to use a picture of a modern-day Hooverville with a great caption about Bush’s “ownership society”.
Might as well let Dubya bask in the glow of his legacy. Heh.
Just what drugs is Karl on this is not an improvement Ossama is still out there! Bush invaded a country with no ties to Ossama and no WMD he let Ossama get away because he got distracted with an oil war!
I blame Rahm or Bushies embedded in the WH
Cancer like germs will grow until they kill there host or eat all the food in the ecosystem this is a very good example to help people understand the GOP mentality.
Don’t expect to read the truth or hear it on the main media outlets. For one they all are cheering for a fix of the system which has gone off kilter. Yeah right.
We don’t need to fix THAT system because it didn’t do much for the people. We work harder, longer, with less vacations and benefits. almost 50MM are not insured for their health and medical costs have skyrocketed beyond absurd.
What we have is the PCs, internet, cell phones with internet, rah rah or haha?, GPS and flat screen TVs. Everything else is like it was 50 years ago. We have tons of credit card debt with rates well into usury.
John and Jane public have been taking it on the chin for the past 25 years. Now the big boys may down size from mega millionaires and billionaires to plain boring millionaires.
We have a depression and we’re heading deeper. The media is a bunch of liars.
Chuck Norris is saying some crap about 5pm March 15 and him wanting to be president of Texas if the Right goes on a killing spree then this story will get airplay but to late:(
See Atturk’s post this morning and the comments for more and PW’s post
What we’ve had is a large part of our people living on the edge of bankruptcy and their demand for money hasn’t been met by the work market, so they went to credit markets and got a temporary solution with longer-term problems — just like the ARMs which are killing the economy today.
Maybe the Libertarians are right about the need for more banks to be able to borrow from the Fed/Treasury to expand competition and to break the power of the big banks.
OT…Keith reports that McCain wants Steele’s job.
Now that’s funny. McCain couldn’t organize a pillow fight.
If you can’t see this, you wouldn’t believe the outfit Steele is wearing on Keith’s clips. Light blue shirt, brown pinstriped suit, and a black and yellow tie. Sickening.
He’s weird and the Rs are scared to pieces over him. I am enjoying it.
Hey Loo Hoo, didja see that Michael Steele is pro- choice ? – from HuffPo
Rush must be having a conniption …
True he is one of the few people who would be worse than Steele and Rush does not like McCain either:)
Serious he’s a senator he is old he needed some kind of drugs just to get the energy to debate Obama. The guy was angry and barely in control could not shake Obama’s hand but other times he seemed normal so I think it was drugs cause Obama was easy on him nice even.
Yes, the ownership society is taken out of Bush’s bio to help people forget that the housing bubble was a major plank of the Bush Republican platform. It also makes it easier for Republicans to blame Fannie and Freddie and minorities because with history scrubbed maybe no one will remember.
Oh wait ACORN Bush can’t claim to try and get poor people homes if ACORN as the GOP troll yesterday on Jane’s speaker’s thread showed is now a major GOP talking point.
Cool the GOP brings up ACORN we point out Bush always said he was trying to create an ownership society where everyone could own a home…even poor people.
I don’t remember Clinton era banks giving out Ninja loans.
Also about Geithner, this is another case of hoping for facts not in evidence, that he or Obama have some secret plan that will help us all out. But this isn’t true. Geithner was a major villain in the 1997-1998 Asian banking crisis. He sat on his ass at the New York Fed from 2003 onwards as the bubble built and after it exploded. He helped put through the sweetheart deals with JPMorgan for Bear-Stearns and Goldman with AIG. He backed Paulson’s nutiness after the Lehman failure of September 15, 2008. He is the protégé of both Summers and Rubin who were so instrumental in the push to deregulate financial markets. He is against bank nationalization and favors a continuation of bank bailouts begun under Paulson. He also supports stiffing homeowners for the benefits of the banks. He is a major reason why the depression we are is going to be long and hard.
Capitalism Ha! Capitalism worked when business was selling goods and services. When banks were depositor held not stock holder owned. When the markets were in the business of trading company stock not financial instuments. When the market cared about the companies and the stock holders not just the buck. Capitalism went astray when making money off other peoples money became the way to go. All the brokers money managers fund operators and yes speculators care not about anybody only the money they can make off of them. Yet yes the American people fell hook line and sinker for the glory and the profits they promised. WEll! The big guys still have theirs and yours and you are lucky if you have any left. So complaints worrying that capitalism is in jepordy is worrying if the theives can still keep stealing and getting away with it.
The republicans how people so wrong can with a sraight face say the people should come back to the party and again belive they have the right ideas. They keep saying Bush had such a good record on creating jobs. Which is a manufactured lie. In two thousand when Bush was put in office we supposedly had to create 165 thousand jobs a month to keep up.
They weren’t doing this so they just overlooked it and made 50 thouand jobs look like they were doing great. They kept the farce and the spin going and even today can make it look like hed had a great record on creating jobs. Not one economist government official member of the media ever calls them on this. So the mith continues and the country suffers because spin turns into fact and that fact is belived.