September 18, 2009

Obama Sets the Stage for Real Fascism?

Thanks to Eastern philosophy, I think I'm getting closer to sorting out my conflicted feelings about Barack Obama. I had fallen prey to the Western logical trap of "duality," of thinking in terms of opposing categories, so that to harbor suspicions about Obama's actual bona fides as a progressive or transformative leader placed me squarely in the yahoo camp of Birther Nation, Glenn Beck Crazies and other perplexing subgroups, with their mystifying, usually ungrammatical signs. (Why the hyphen between "Christian" and "Nation," for example?)

I realize it's not really like that. The Obese/Type II Diabetic March on Washington last weekend (which David Brooks found so inspiring, in his usual clueless way, because he saw some white people talking to black people), in which a large group of the White Dispossessed expressed their rage at Things in General, in its own paradoxical way shed light on the issue. I realize now. looking back over the last decade or so, that I was so shocked by the elevation of a genuine moron, George W. Bush, to the office of the Presidency that I made the mistake of believing that his election was some kind of aberration. Closer to the truth, it represented a trend line in the movement of a government responsive to the"general electorate" toward one which only uses the general electorate as a means of capturing power so that it can do what it sees as its real work, the maintenance of the status quo for the benefit of large multinational corporations. As is becoming increasingly obvious, this is the real constituency of the only two political parties viable in America.

Barack Obama is the head of one of these two political parties. Ignoring the trend line, the general populace (me included) fell for a spiel about "Change," seeing Obama as in some sense the avatar of Martin Luther King, Jr. or Robert Kennedy and wilfully discounting the modern reality that it's simply not politically possible anymore for a true Change Agent to survive in the political machinery essential to maneuvering toward the top. This obliviousness leaves us "shocked" that Obama turns out to be a kind of Bush in sheep's clothing. Obama is just as committed to fighting the "war on terror," choosing Afghanistan over Iraq (because Afghanistan is the "hip" war); he's just as bad and unconstitutional as Bush in denying habeas corpus rights to terror-war captives, creating a legal black hole in Bagram as opposed to the disfavored Guantanamo; worse than Bush in codifying a system of "preventive detention," a major break from a legal tradition begun with Magna Carta; just as craven where Wall Street is concerned; and a complete sell-out on his signature "health care" reform, where it is becoming obvious that he's only interested in the appearance of having passed something, regardless of whether it's actually ameliorative of the problems of the American Middle Class.

While all this is going on, Obama talks and talks and talks. On talk shows, in speeches, in press conferences. He preaches the gospel of bipartisanship while populist rage, in such forms as the 400 Pound/High Blood Glucose March exemplied, is stoked by Media Manipulators such as Glenn Beck, who may not realize (because of his own insanity) how dangerous the forces he's encouraging are.

One thing that is becoming self-evident is that it's highly doubtful the American people are going to fall for the "Progressive Change Agent" shtick again, so that the real danger, which we may see as early as 2010, is that the "progressives" may lapse back into their bitter apathy (which is their actual Comfort Zone, after all), while the Angry Whites (who, unlike the progressives, actually show up at demonstrations and "town halls") will mobilize and begin winning elections again based not on superior numbers but on superior motivation. I see that as the real danger posed by Obama's sell-out: a return of the disproportionate power of the White Religious Right who take to heart Woody Allen's famous dictum that just showing up is 90% of everything.

Meanwhile, the actual motivation of all these town halls and Teabaggers, "Obamacare," is pretty hard to figure out. It is an omnidirectional sort of rage and frustration which is "anti-government," secessionist, anti-immigrant and fearful of being completely marginalized economically. The people doing the demonstrating are actually the ones who would profit most from a radical transformation of health care in this country. In fact, I think health care is going to be the first Big Fail in our society: it's going to break down completely, because it's impossible to sustain the present system. It depends on the solvency of the Middle Class, and the Middle Class cannot afford what we have anymore. That is unique and unprecedented, although it never gets talked about in those terms. Most adverse social conditions in this country simply hit the poor and already marginalized, and then some "social program" (such as Medicaid or AFDC) is implemented to keep them from expiring altogether. The inability of Middle Class Americans to afford ordinary insurance premiums (which keeps adding to the ranks of the uninsured) is not ameliorated by such welfare programs, and yet there is nothing in the present proposals to do anything about this basic problem, because Obama is too timid (and probably beholden) to attack the problem at its root.

Meanwhile, the real estate market is not expected to recover to its 2006 prices until 2020 or so. Should be an interesting decade, in the sense of the Chinese curse.

September 16, 2009

The noncooperating judiciary

It will be interesting to see how the Kumbaya Kid and the financial section of his cabinet react to the legal hardball currently being played in New York. It's not the White House's style. Obama prefers to defer any sort of punitive measure till the next time that perpetrators do the same illegal things. Maybe the U.S. tortured people during the Bush Administration, but it's pointless to do anything about it now, he argues. One could hear a similar sentiment in his speech on Monday on Wall Street. The next time that investment banks melt the world's financial system down through unchecked, relentless greed, there will be hell to pay by the bank's stockholders and management. This time, however, the same fall guy winds up holding the bag: the American taxpayer. And if Goldman Sachs and others want to pay themselves record bonuses at the end of this year, all made possible by virtually free money from the Federal Reserve, well hell - that's American capitalism, sort of, and in January, 2010, the bonuses paid in December, 2009, will be in the past, where they are immune from scrutiny or prosecution. But Obama suggested that Wall Street bankers demonstrate now that their hearts are in the right place (or that they even have hearts) by putting such bonuses up to stockholder vote, because that may become the law in the future.

I sometimes wonder if Obama himself believes there is any chance whatsoever that his precatory appeals to the better angels of the Banksters can succeed. If he does, I'm sure that Ari Emanuel's brother convinces him quickly otherwise.

Other players on the scene are not quite so easygoing, such as the New York federal judiciary and Andrew Cuomo, the Attorney General of New York state. They're all over the SEC and the Bank of America like a pit bull on a poodle (h/t: Mr. Bookman, the library investigator from "Seinfeld.") It seems that the Bank of America high command was aware prior to its forced-march acquisition of Merrill Lynch that the investment bank had already paid itself massive bonuses (about $20 billion in a year in which Merrill Lynch had lost money) in advance of the "permission" that the BofA told its shareholders in a proxy statement that ML required from BofA as a condition of any such bonuses; and, the losses from ML's mortgage subsidiary were much larger than those anticipated when BofA was ordered at gunpoint by Henry Paulson to save Merrill Lynch. So much so that BoA attempted to back out of the deal, citing the Material Adverse Change (MAC) clause in the acquisition deal.

The Securities & Exchange Commission, arousing itself from the coma it had enjoyed during the Bernie Madoff years (nice work, Christopher Cox!), investigated and found that BofA had indeed misled its shareholders on the advisability of the acquisition/merger, and brought an enforcement action in the lower Manhattan federal court of Judge Jed Rakoff. Such bad luck for the SEC and the BofA; these two parties had worked out a sweetheart deal, a "fine" of $33 million (three orders of magnitude away from the amounts actually involved in the BofA/Merrill deal). They could not have drawn a worse judge, from the standpoint of getting away with this collusive wrist-slap. Rakoff's whole career has been about the detection and prosecution of white collar crime. He teaches a course on the subject at Columbia Law School. Here's what he had to say about the settlement:
“The S.E.C. gets to claim that it is exposing wrongdoing on the part of the Bank of America in a high-profile merger,” he wrote, and “the Bank’s management gets to claim that they have been coerced into an onerous settlement by overzealous regulators.”
As it turns out, neither party will get to claim either thing. Rakoff threw the settlement out and told the SEC it was going to trial next year in his court against BofA. Which brings up a question: what will the SEC do? Dismiss the case altogether?

This whole fiasco must be a considerable source of consternation in the Oval Office, where everyone is seen as everyone else's friend, and stuff like war crimes and massive financial fraud must always be considered in context. Rakoff, as judge and private litigator, has seen enough civil RICO, mail fraud and other crime to know this is a very naive view. These were all pigs feeding at the public trough and stealing everything that wasn't nailed down. They used bailout money and anything else coming through the door for personal compensation, with the idea that a panicked public sector would fork over the cash, no questions asked.

It was all going swimmingly, but here come da judge. Now Cuomo is gearing up his state court action against the BofA for securities fraud, and will subpoena its top management in the near future. Can the depositions of Paulson & Bernanke be far behind? It looked so much like a clean getaway, the TARP, the bailouts, all of it. Now what?