The way we were

Steve Benen at Political Animal notes what we've all been noting -- that the conservative pod people who spent seven weeks decrying Obama for tanking the market have been oddly -- or not -- quiet for the past four weeks that it's taken the Dow to rise above 8,000 for the first time in ... oh, let's see, seven weeks.

Here's what the Wall Street Journal said just a short month ago (i.e., right before the Dow started this upward trend):

Americans have welcomed the Obama era in the same spirit of hope the President campaigned on. But after five weeks in office, it's become clear that Mr. Obama's policies are slowing, if not stopping, what would otherwise be the normal process of economic recovery. From punishing business to squandering scarce national public resources, Team Obama is creating more uncertainty and less confidence -- and thus a longer period of recession or subpar growth.

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So what has happened in the last two months? The economy has received no great new outside shock. Exchange rates and other prices have been stable, and there are no security crises of note. The reality of a sharp recession has been known and built into stock prices since last year's fourth quarter.

What is new is the unveiling of Mr. Obama's agenda and his approach to governance. Every new President has a finite stock of capital -- financial and political -- to deploy, and amid recession Mr. Obama has more than most. But one negative revelation has been the way he has chosen to spend his scarce resources on income transfers rather than growth promotion. Most of his "stimulus" spending was devoted to social programs, rather than public works, and nearly all of the tax cuts were devoted to income maintenance rather than to improving incentives to work or invest.

Wall Street Journal = Rupert Murdoch = Big Business = Republican. Lately? The WSJ notes that government is the only sector actually hiring people and complains that the Obama administration isn't playing GW's asinine "global war on terrorism" fear game, so labeled because the Bush administration didn't want to openly go and call it a global war on Islam -- that's what they have talk radio and Fox "News" for. Oh, yeah, and since we can't play the terrorism fear game with this administration, we'll just play the fake socialism fear game.

Of course, the whole idea of blaming or crediting a president for the rise and fall of the stock market is just plain silly, because we all know those freaky children out to make a killing and retire to the Hamptons, or GW's toney Dallas neighborhood, make their decisions to buy and sell on which way the wind is blowing, and I don't necessarily mean the political wind.

Meanwhile, both Barry Ritholz and BAGNewsNotes take on one of my favorite subjects: What the fuck was the president thinking to hire people to get us out of the mess that they were responsible for getting us into (jeez, I'd strangle one of my writers for a sentence like that).

BNN does it with this fabulous cover of TIME magazine from February 19, 1999. That's Robert Rubin, Alan Greenspan and Larry Summers, "the three Marketeers." I think Tim Geithner was too young in 1999, but then, he's d'Artagnan anyway.

BNN makes two points that I've been making for weeks now -- that the financial sector has already failed and that if the financial institutions are too big to fail, they shouldn't have been in private hands to begin with, and, in fact, they weren't. The government has been gaming the system for them all along, with lots of campaign contributions to back it up.

A new report by Wallstreetwatch.org reveals that from 1998 to 2008, the finance industry made $1.7 billion in contributions to Washington politicians (55 percent to Repubs, 45 percent to Dems), spent $3.4 billion on lobbyists (3,000 of them on the industry payroll in 2007 alone) and won a dozen key deregulatory victories that led directly to today's financial meltdown.

Inherent in the industry's push for unbridled expansion was the unstated goal of guaranteeing that they would get taxpayer bailouts if things went badly. So many investors, businesses, employees and others would be hooked into these multitentacled blobs that government would be compelled to rescue the banks from their own excesses.

Knowing that they could privatize all of the profits from quick-buck schemes and socialize the losses, bankers were unleashed to do their damnedest. Which they did.

Meanwhile, Cardinal Richelieu (formerly played by Hank Paulson and Ben Bernanke, now only portrayed by Bernanke) has d'Artagnon's backing to create yet another regulatory entity, one which no doubt will work just as well as the one we actually have that didn't do its job, largely because it's the banking industry that regulates the watchdog. Talk about your fox and henhouse.

Ritholz targets Athos -- Larry Summers -- for his crimes, noting that he's made quite a bit of money from one particular hedge fund and speaking engagements at various financial institutions. Where might his loyalties lie? Certainly not with the American public. Ritholz:

If the history books eventually judge the Obama administration a failure, they may have to point to one horrific appointment as the root cause of the misguided policies: The 'Smart Guy' who decided to continue the 'Dumb Guy’s' policies.

Sara Robinson, writing at the Campaign for America's Future with Terence Heath in the "Time to Deliver" series, writes that it's crucial to push this administration to make some actual change, else that change will be made for us something else I've been saying).

In short: The Bush administration left behind a political, economic, and social pressure cooker that was building up a dangerous head of steam toward violent, revolutionary change. Obama's lifted the bobbler and let a bit of that pressure escape; but the seal is still tight, and the heat under the pot is rising faster than ever. If he doesn't find a way to resolve these issues and/or channel the outrage soon, Davies' model suggests that our last best chance for peaceful evolution will soon enough be behind us, leaving us to work this transformation out on by far more barbaric means.

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The important fact about this new era we find ourselves in is this: We can't ever go back to how it was. The world we've known since World War II is gone, and it's not ever coming back. Americans are in varying stages of accepting this reality -- but the sooner they do, the better off we'll be. There are vast structural changes (which, in themselves, are fodder for another post) that are profoundly re-shaping our entire reality, and which are not going away no matter how insistently our elites try to obfuscate or deny them. One way or another, now or later, we are going to be forced to address those shifts, and devise a new economy, new technologies, and new social priorities that will enable us to adapt to them.

The only real choice we have right now is whether we're going do this change the easy way -- thoughtfully, exercising our collective foresight to make clear-headed decisions that will ease us through a peaceful and relatively smooth transition; or whether we'll choose to go down hard by continuing to postpone dealing with it, building up the pressure until there's an inevitable explosion that utterly flattens us economically, environmentally, politically, and socially. That's the deal now. Face up to it while it's relatively cheap and easy; or face up to it later, when our options and resources will both be much fewer.

This is what the conservatives don't get: We can never go back to the way it was. I'm not sure if Obama gets that, and I'm sure the Marketeers and their friends don't, and guess who has the president's ear on these matters?

When he should be listening to Stiglitz, Ritholz, Krugman and Johnson, Obama is listening to Bernanke, Summers and Geithner -- Paulson and Greenspan being at least physically out of the picture.

That needs to change. And soon.

News Writer
AWOP Political Contributing Editor
Author of Stop the Press!

Cross-posted at Stop the Press!

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Peace Y'all