Obama and the Enhanced Status QuoPosted: June 21, 2009
We were promised changed. What we are getting is perpetuation of the status quo. Let’s try this headline at the Guardian on for size “Goldman Sachs to make record bonus payout”.
Staff at Goldman Sachs staff can look forward to the biggest bonus payouts in the firm’s 140-year history after a spectacular first half of the year, sparking concern that the big investment banks which survived the credit crunch will derail financial regulation reforms.
A lack of competition and a surge in revenues from trading foreign currency, bonds and fixed-income products has sent profits at Goldman Sachs soaring, according to insiders at the firm.
Staff in London were briefed last week on the banking and securities company’s prospects and told they could look forward to bumper bonuses if, as predicted, it completed its most profitable year ever. Figures next month detailing the firm’s second-quarter earnings are expected to show a further jump in profits. Warren Buffett, who bought $5bn of the company’s shares in January, has already made a $1bn gain on his investment.
The bold part says it all. There continues to be a systematic elimination of competition from merger mania in the financial sector which has created two classes of too-big-to-fail institutions. We now have those that function completely with government funding and those that function by funding candidates for government. Goldman Sachs is benefiting immensely from both.
The NY Times’s Gretchen Morgensen examines this theme in Too Big to Fail or Too Big to Handle?
“No one should assume that the government will step in to bail them out if their firm fails.”
Talk is cheap, however. And the notion that the plan shows a new aversion to bailouts is not at all supported by its chapter and verse. In fact, there’s precious little in the 88-page document about how the government will eliminate systemic risks posed by financial firms that aren’t allowed to fail because they’re simply too big or to interconnected to other important economic players here and abroad.
Rather than propose ways to shrink these companies and the risks they pose, the Geithner plan argues instead for enhanced regulatory oversight of the behemoths. This suggests the taxpayer safety net will be larger after our national financial train wreck, not smaller.
More than two years after the crisis began, “too big to fail” remains “too problematic to address” with anything other than more souped-up regulation. Given that earlier efforts at policing these entities failed so miserably, why should anyone think that a new-and-improved regulatory approach will fare better?
Morgensen calls this latest policy “enhanced status quo” with “a bigger safety net”. This isn’t the only area where the rich and powerful lobbies in the financial sector are getting their way with this administration. The New York Times also reports that polls show wide support for a government run healthcare. (More detail here)
Americans overwhelmingly support substantial changes to the health care system and are strongly behind one of the most contentious proposals Congress is considering, a government-run insurance plan to compete with private insurers, according to the latest New York Times/CBS News poll.
The poll found that most Americans would be willing to pay higher taxes so everyone could have health insurance and that they said the government could do a better job of holding down health-care costs than the private sector.
in the poll, the proposal received broad bipartisan backing, with half of those who call themselves Republicans saying they would support a public plan, along with nearly three-fourths of independents and almost nine in 10 Democrats.
Why, then, is the public option being removed from the table if not from pressure by the Insurance Industry? Certainly, it can’t be any expectation that the few Republicans left standing in the Senate and the House are going to actually be able to block legislature. Are we waiting for some kind of magical celestial alignment?
We’ve seen this time and time again in the last 6 months of the Obama administration and its huge congressional advantage. The Obama administration offers up nothing more than the status quo. His policy then morphs to something that could only keep a Republican happy. How can the villagers continue to insist that what we see is just some kind of 11th dimensional kung fu chess and caution patience?
If not now, when? If not Obama and the congressional democrats, then who? It is time to stop making excuses for this man and his team of muddled-right corporatists and demand real change. We deserve more than just enhanced status quo. It’s time to let them know we don’t intend to keep putting people in office that do not reflect the best interests of the American people. It is also time to hold this current batch to account.
I’m worrying about a possible strategy to come in the midterms. We continue to see the Republicans characterize the Obama administration as marching towards socialism. This is such an incredible mischaracterization that I can hardly believe anybody but the most hardcore ditto heads believe. However, what happens when these warmed-over Bush policies we’re getting continue to fail? If you look at the recent gallup polls, you’ll see that Obama is really losing independents. Will they believe that this failure is the failure of an enhanced status quo or of left-leaning policies? (Rasmussen has him in net negative approval land now.)
The latest decline in Obama’s approval score, to 58%, results from a drop in approval among political independents as well as among Republicans. Democrats remain as highly supportive of the president as ever.
The villagers need to quit enabling this President and demand real change as promised. If we don’t draw the distinction between true liberal values and programs and what THIS is, we risk having moderate right failures labeled liberal. This face-saving dance is high risk since we will lose the change conversation in the future if we don’t label Obama’s policies for what they are. I cannot emphasize this enough. We are not seeing the promised change, yet the Republican frames are sticking. You should be writing congressional democrats and demanding they stay true to our democratic values and traditions. Its time to put an end to enhanced status quo before we’re out in the wilderness again.
Again, I ask, If not now, when? If not Obama and the congressional democrats, then who?
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