Obama Delivers for His Base: The Bank Settlement, Poison Pills, and American Corporatism

While the Leesburg Daily Commercial gave yet more column inches to right-wing firebrands assailing “Obamacare” for requiring churches to make contraceptives available to their employees, the United States took a further, massive step toward the entrenchment of corporate power at the expense of the citizenry. The multi-state bank settlement announced last week Obama Announces Bank Settlementrepresented the latest obscenity against economic justice and the rule of law in America’s race to sell its soul to the financial sector. When the state – led by an ostensible protector of the common man – uses its powers for the benefit of the corporations at the expense of the people, then we have officially descended into oligarchy. The failure of media outlets such as the Daily Commercial to understand the gravity of this situation is only to be expected, and their focus on the relatively trivial but deliberately-stoked culture issues actively denies the truth to their readers. Through their selective reporting and masterful distractions, conventional media organizations enforce the ideological conformity that enables corporate control to proceed unchallenged by a nominally sovereign people.

When Mitch McConnell, the most disgusting corporate toadie in the country – now assisted by the equally obsequious and ambitious Marco Rubio – leads the Christian soldiers in their noble cause against taxpayer-funded birth control then we know we are being treated to a classic show of national smoke and mirrors. State power is apparently odious when used to advance the health and welfare of the citizenry, yet remains strangely shielded from criticism when used to advance the interests of corrupt mortgage lenders who have ridden roughshod over hundreds of years of real-estate law and defrauded home owners across the nation. Of course, there is still plenty of room for the right to portray the Administration’s robo-signing deal as yet more unwise government interference in private markets that should be left alone, but the absence of such comments is conspicuous. Bipartisanship, it turns out, is alive and kicking: When it comes to maximizing corporate profits or imposing American corporate preferences on the world through unprecedented military force, there is a remarkable degree of consensus in the Federal City. We just aren’t supposed to know that.

And so we are exposed to the nauseating irony of an evangelical-leaning party suddenly displaying remarkable solicitude toward the sensibilities of the child-molesting Catholic Church. God’s Own Party had little to say about the Pope’s international cover-up of child abuse, but is outraged that church secretaries might be able to obtain subsidized reproductive health services. As Dan K. Thomasson points out in today’s Daily Commercial, the vast majority of Catholic women have been disregarding papal edicts on this topic for decades, but the pretense of purity must not be shaken. Thomasson, posing as a rather patronizing wise elder, castigates President Obama for political naivete in allowing this predictable brouhaha to emerge. As usual, Thomasson misses the bigger picture. The Contraceptive Crisis of 2012 is the domestic equivalent of Ronald Reagan’s invasion of Grenada after the lethal suicide bombing in Lebanon that claimed the lives of over 200 U.S. Marines. It gives the media something else to do besides ask deep and meaningful questions, and it distracts an easily-misled public with dramatic theater. For readers unwilling to credit such conspiracy theories, let us at least acknowledge that our national discourse displays a remarkable propensity to miss the point, and move on to what that point really is.

The best reporting on the bank settlement is on Yves Smith’s blog, Naked Capitalism. The extent to which the Obama Administration has succeeded in protecting its clients on Wall Street would only be remarkable to a neophyte (or a reader of the Leesburg Daily Commercial). The amount of compensation that might ultimately be paid to former homeowners who had their homes wrongfully foreclosed upon is insultingly small and represents a tiny fraction of the size of a typical loan. Wrongdoing can simply be written off as another cost of doing business; no one is going to jail. But if that were not insulting enough to what remains of our sense of common decency, the details of the deal (many of which remain to be hammered out behind closed doors by highly-paid lawyers) are taking the form of a shadow bail-out to the banks, actually strengthening their balance sheets in certain respects and enabling them to pass many of the costs on to already-battered investors in mortgage-backed securities. (Those investors, lest we not forget, include many pension funds and 401(k)s; i.e., us.)

President Obama has been pursuing this grand settlement for a long time. Roping almost all the state Attorneys General into the deal has always been the objective, and even the most belligerent – like Beau Biden of Delaware and Eric Schneiderman of New York – seem to have buckled, selling the $26 billion deal to their home electorates as a good deal for homeowners. These, remember, are the socialists, according to the propaganda-spewing right. But for those of us whose political vocabulary extends beyond the equivalent of Neanderthal grunts, the only appropriate labels for the bank deal are corporatism and clientelism. The so-called socialists learned some time ago that the path to power was paved with Wall Street millions. It’s fine if the ignorant demos continues to believe that the Democratic Party represents the dying ranks of unionized labor, the semi-permanent underclass of urban African-Americans, or even the wealthy Jews of south Florida. And with such an incompetent mass-media eager to reinforce these stereotypes, there is little danger of that mask being removed.

Left-wing commentators, including several contributors of letters to the Daily Commercial, often invoke Mussolini’s conception of corporatism when Mussolinidescribing the trajectory of American society. Frequent use is made of an alleged Mussolini quote: “Fascism should more properly be called corporatism because it is the merger of state and corporate power.” But, apart from being apocryphal, this quote is not really applicable to the modern American scene and is as intellectually flawed as any number of straw men fallacies routinely offered by the right. Mussolini’s corporatism was a top-down model giving primacy to the state. British fascist Oswald Mosley saw this as an organic society, with each part playing a specified role analogous to organs of the body. Tellingly, Mosley also regarded Mussolini’s corporatism as a restriction of laissez-faire economics and international finance. This is most emphatically not the modern iteration of corporatism being implemented sub rosa in the Land of the Free.

Similarly, American corporatism does not resemble the post-war European model which saw the state attempt to act as a triangulating partner with capital and labor, or even the Asian version in which the state (again treated as primary) confers legitimacy upon selected economic, social, and cultural actors in order to simplify the national chess board and facilitate management of the country. No, the closest analogy here is with the Russian version of corporatism, in which Vladimir Putin and his cronies have effectively merged corporate and state power in the ultimate expression of bandit capitalism. The difference is simply one of degree and presentation. Thus, Dick Cheney and Hank Paulson leave their highly paid positions in the private sector for periods of “public service,” during which the fortunes of their corporations may take surprising turns for the better, as they did, respectively, in the Iraq War and the government’s unwillingness to bail out Lehman Brothers, the arch-nemesis of Goldman Sachs. Less obviously, the revolving-door problem at the SEC, in which staffers used their federal positions to seek more lucrative employment on Wall Street, had much to do with the economy’s spiral into a speculative collapse. And the corruption of the economics discipline in academia – perhaps the most interesting segment of the movie Inside Job – ensured that anyone seeking prominence in policy spheres, like, say, new Senators from Illinois, would be intellectually predisposed to play the game the right way.

We always wanted Russia to be more like America. How unfortunate that we narrowed the gap by becoming more like them.

Leave a Reply

Your email address will not be published. Required fields are marked *