Poised for Recovery?
Frank Rich captures America’s angst and anger at government and corporate financial elites in his Bernie Madoff is No John Dillinger. Madoff was a genteel but noxious racketeer who stole $65 billion dollars. Dillinger was a charismatic but homicidal bank robber who became a Robin Hood because the banksters he was robbing were first perceived as the Sheriff of Nottingham.
Mr. Rich echoes Paul Krugman and Joseph Stiglitz by encouraging Mr. Obama to rethink the tentativeness of his economic recovery package and his legal reforms, which do too little, and his Wall Street bail-outs, which reward the behavior he claims to punish. This comment from Joe Stiglitz captures how the developing world, and in Rich’s view, how many people here and abroad, view Mr. Obama’s economic stewardship:
[P]eople look at Washington and see a system of government that allowed Wall Street to write self-serving rules which put at risk the entire global economy — and then, when the day of reckoning came, turned to Wall Street to manage the recovery. They see continued re-distributions of wealth to the top of the pyramid, transparently at the expense of ordinary citizens.
Mr. Rich notes that banks are jacking up checking account fees and interest rates (even for good credit risks) ahead of the formation of Mr. Obama’s new consumer finance regulator. (Given Obama’s style, its leadership is likely to reflect the "bipartisanship" of Lindsey Graham and Joe Lieberman rather than the critical expertise of an Elizabeth Warren.)
He notes how Wall Street’s bail-out beneficiaries are rapidly returning to their old ways, with fewer competitors among whom to share the loot. He cites Matt Taibbi’s blistering critique in Rolling Stone of Goldman Sachs, and adds,
What’s uncontroversial and indisputable is that Goldman alumni have played key roles in both the Bush and Obama administrations’ responses to the current crisis — even though Goldman has a big stake in the outcome. The dense revolving-door conflicts of interest are appalling.
Lastly, Mr. Rich reminds us that there are vast social as well as economic consequences to massive job losses and continued maladministration of the economy by a purported centrist Democrat.
Americans who felt betrayed didn’t just take to cheering Dillinger; some turned to the populism of Huey Long, or to right-wing and anti-Semitic demagogues like Father Coughlin, or to the Communist Party. The passions unleashed by economic inequities are explosive because those inequities violate the fundamental capitalist faith. It’s the bedrock American dream that virtues like hard work and playing by the rules are rewarded with prosperity.
In 2009, too many who worked hard and played by the rules are still suffering, while too many who bent or broke the rules with little or no accountability are back reaping a disproportionate share of what scant prosperity there is. The tepid national satisfaction taken in Bernie Madoff’s terminal prison sentence should be a warning to the White House. In the most devastating economic catastrophe since Dillinger’s time, many Americans know all too well that justice has yet to be served.