21st Century Economics: 1. Rampant fraud and reckless mismanagement in the financial sector, 2. Public bailouts of the worst actors in the financial sector, 3. Private debt and liability imposed on taxpayers, 4. Monetary policy aimed at recapitalizing insolvent and recidivist banks, 5. Promotion of business leaders and policy-makers who are chronically compromised, 6. Conglomeration of Systemically Dangerous Institutions into a more empowered menace.
Charles Ferguson: Why the 2012 election will be another inside job
While Romney and Obama trade insults about who's the worse Washington insider, the reality is both are in hock to Big Money
Last week, Mitt Romney and President Obama traded insults in a most amazing way, reminding us that success in American politics these days requires two things: saying the most absurd things with a straight face, and maximizing the appearance of differences with your opponent, while minimizing their reality. Consider …
"I've learned some lessons. Most important is you can't change Washington from inside, only from the outside."
"He said he can't change Washington from inside. He can only change it from outside. I can change Washington. I will change Washington. We'll get the job done from the inside."
"What kind of inside job is he talking about? Is it the job of rubber-stamping the top-down, you're-on-your-own agenda of this Republican Congress? Because if it is, we don't want it … We don't want an inside job in Washington."
Well, Romney's a pretty obvious case of Mr Insider. But let's look at Obama. He doesn't want an inside job? Over the last four years, Obama has appointed nothing but insiders – many of whom had actively contributed to the financial crisis and profited from it – to his administration's senior regulatory, law enforcement, and economic policy jobs. The head of the SEC, Mary Shapiro, was fresh from running the investment banking industry's "self-regulator", Finra, which gave her a $9m severance bonus to soften the pain of a low government salary. Her director of enforcement, Robert Khuzami, had been general counsel for the Americas of Deutsche Bank during the bubble.
The head of the justice department criminal division, Lanny Breuer, had been in charge of the white-collar criminal defense practice of Covington & Burling, a law firm that represents and lobbies for nearly every major bank. The head of the office of management and budget, Jacob Lew, made millions as the chief financial officer of Citigroup Alternative Investments, even as that group lost billions for Citigroup. As head of the National Economic Council, we got Larry Summers, who as Clinton's treasury secretary pushed through the repeal of Glass-Steagall and a law banning regulation of OTC derivatives, and who then proceeded to make $7m from financial services firms in the year prior to joining theObama administration (including $135,000 for a single speech to Goldman Sachs). Other senior jobs went to Goldman Sachs lobbyists, investment bankers, private equity executives, and the former chief lobbyist of Fannie Mae.
And beyond Obama's personnel, there were his policies. He did nothing about the obscene $14bn in bonuses awarded in early 2009 by banks that would literally have been bankrupt without federal bailouts; he failed to prosecute even a single bank or financial executive despite clear evidence of rampant, systemic fraud; and he has since attempted only the most pitiful of systemic reforms.
Nor is this pattern restricted to the financial sector: despite the worst oil spill in history, one that killed 11 people, and a lethal mine disaster that followed deception of safety inspectors, there have been no prosecutions of energy executives, either. And it all shows: in this campaign, Obama has actually raised more money than Mitt Romney, the poster boy of plutocracy.
Well, I'll be the first to admit that I have a personal axe to grind. Like, how do I know all this stuff? Well, two years ago, I made a documentary film about the financial crisis, followed recently by a book. The film, based on a year of research and nearly 100 on-camera interviews, chronicled the thoroughly bipartisan process of deregulation, political corruption, and lack of law enforcement that paved the way for the financial crisis. It concludes with a detailed examination of the Obama administration's abysmal record.
So there you have it – my real gripe is that Obama stole my title for his petty spat with Romney, each of them pretending to be the guy who would fix Washington corruption – when, of course, neither of them would.
I should say for the record that despite the foregoing, I support President Obama's re-election. For all Obama's faults, Romney and the new Republican party would be even worse. Obama has at least tried to do afew things, some of the time, however timid. Not to mention little details like gay marriage, abortion, climate change, tax returns, et cetera.
But the sad truth is that the more the two candidates pretend to be at each other's throats, the more similar they are in reality, at least where money is concerned. They would both let America's new financial oligarchy run amok, at the nation's great expense. This is just one domain among many in which both candidates avoid the truth, preferring to trade blows in the theater of the absurd.