Monday, July 25 , 2016, 9:47 pm | Fair 64º

  • Follow Noozhawk on LinkedIn
  • Follow Noozhawk on Pinterest
  • Follow Noozhawk on YouTube
 
 
 

Robert Scheer: The Men We Trusted to Lead Us Have Failed

Policies and appointments on both sides of the party divide have betrayed any promise of hope

Now he tells us.

On Wednesday, Federal Reserve Chairman Ben Bernanke referred to the nation’s unemployment rate as a “national crisis,” a depressing if obvious fact of life for the 25 million Americans who have been unsuccessfully attempting to find full-time employment.

But to finally hear those words from the man Presidents George W. Bush and Barack Obama both appointed to lead us out of the great recession is a bracing reminder of how markedly the policies of both those presidents have failed.

“We’ve had close to 10 percent unemployment now for a number of years, and of the people who are unemployed, about 45 percent have been unemployed for six months or more,” Bernanke said. “This is unheard of.”

But why is Bernanke just now discovering this after having overseen the Fed’s purchase of trillions of dollars in toxic mortgage-backed securities from the too-big-to-fail banks that sacrificed people’s homes in a giant Ponzi scheme? Why did he throw all of that money at the banks without getting anything back in the way of relief for the people the bankers swindled?

The housing meltdown, which has robbed Americans of a considerable portion of their net worth, has led to the continued depressed consumer confidence that is the prime cause of crisis-level unemployment. In another of his too-late-to-matter moments, Bernanke acknowledged that “strong housing policies to help the market recover” would “clearly be very useful.” But he failed to suggest any.

Bernanke, along with then-New York Fed President Timothy Geithner, helped implement the Bush strategy of saving the banks in the hope that their rising tide would lift our little boats. That remained the strategy when President Obama rewarded Geithner for having saved AIG and Citigroup by naming him Treasury secretary in the incoming government.

With the Geithner appointment and the even more disturbing selection of Lawrence Summers to be his top economic adviser, Obama sealed his own fate as president. By turning to those disciples of Bill Clinton-era Treasury Secretary Robert Rubin, a prime enabler of Wall Street greed, the new president fatally betrayed his promise of hope.

If you still need confirmation of just how decisive a betrayal those appointments were, check out Ron Suskind’s new book, Confidence Men, a devastating insider account of the Obama White House that clearly identifies as the source of this president’s failure “Rubin’s B-Team” — Summers and Geithner — “two men whose actions had contributed to the very financial disaster they were hired to solve.” Suskind quotes then-Sen. Byron Dorgan, D-N.D., one of the few who dared stand up to the Wall Street lobbyists, as telling Obama, “I don’t understand how you could do this; you’ve picked the wrong people!”

Of course, the Democrats from the Clinton era don’t bear all of the responsibility for the radical deregulation of the financial industry that ended the sensible restraints on greed installed by Franklin Roosevelt in response to the Great Depression. Indeed, the inspiration came from Republicans led by Phil Gramm, then-senator from Texas, who, as head of the Banking Committee, authored the legislation that Wall Street lobbyists had long pushed unsuccessfully.

The mayhem they wrought and the subsequent big-money rewards to Rubin and Gramm do not seem to have shocked this president or the leading contenders for the Republican presidential nomination. Rubin became chairman of Citigroup and was rewarded with $120 million while he guided the bank to the edge of bankruptcy. Gramm went on to a leading position at Swiss financial services company UBS, a continually troubled institution now in the midst of its latest scandal, which involves fraudulent trading. In addition to a $45 billion direct TARP bailout, Citigroup got $99.5 billion, and Gramm’s UBS received $77.2 billion from a $1.2 trillion secret Fed loan fund.

Gramm and Rubin were partners in what should be considered the crime of the century — speaking in moral and not legal terms, since, in the financial world, the bad guys get to write the laws. Thanks to their efforts, which allowed the creation of the “too-big-to-fail banks” and a totally unregulated derivatives market in toxic home mortgage securities, we entered the Great Recession. But neither of its authors has ever been held seriously accountable for the enormous suffering he caused.

On the contrary, Gramm and Rubin’s “just free Wall Street to do its thing” ideology still dominates the economic policies of both major political parties. Rubin’s acolytes have controlled the Obama administration’s economic strategy of saving Wall Street by betraying Main Street, and Gramm, who recently endorsed his former student at Texas A&M, Rick Perry, for president, remains the free-market-mayhem guru for Republicans. On Election Day, whoever wins, we lose.

TruthDig.com editor in chief Robert Scheer‘s new book is The Pornography of Power: How Defense Hawks Hijacked 9/11 and Weakened America. Click here for more information. He can be reached at .(JavaScript must be enabled to view this email address).

Reader Comments

Noozhawk's intent is not to limit the discussion of our stories but to elevate it. Comments should be relevant and must be free of profanity and abusive language and attacks.

By posting on Noozhawk, you:

» Agree to be respectful. Noozhawk encourages intelligent and impassioned discussion and debate, but now has a zero-tolerance policy for those who cannot express their opinions in a civil manner.

» Agree not to use Noozhawk’s forums for personal attacks. This includes any sort of personal attack — including, but not limited to, the people in our stories, the journalists who create these stories, fellow readers who comment on our stories, or anyone else in our community.

» Agree not to post on Noozhawk any comments that can be construed as libelous, defamatory, obscene, profane, vulgar, harmful, threatening, tortious, harassing, abusive, hateful, sexist, racially or ethnically objectionable, or that are invasive of another’s privacy.

» Agree not to post in a manner than emulates, purports or pretends to be someone else. Under no circumstances are readers posting to Noozhawk to knowingly use the name or identity of another person, whether that is another reader on this site, a public figure, celebrity, elected official or fictitious character. This also means readers will not knowingly give out any personal information of other members of these forums.

» Agree not to solicit others. You agree you will not use Noozhawk’s forums to solicit and/or advertise for personal blogs and websites, without Noozhawk’s express written approval.

Noozhawk’s management and editors, in our sole discretion, retain the right to remove individual posts or to revoke the access privileges of anyone who we believe has violated any of these terms or any other term of this agreement; however, we are under no obligation to do so.

Support Noozhawk Today

You are an important ally in our mission to deliver clear, objective, high-quality professional news reporting for Santa Barbara, Goleta and the rest of Santa Barbara County. Join the Hawks Club today to help keep Noozhawk soaring.

We offer four membership levels: $5 a month, $10 a month, $25 a month or $1 a week. Payments can be made through PayPal below, or click here for information on recurring credit-card payments.

Thank you for your vital support.



Daily Noozhawk

Subscribe to Noozhawk's A.M. Report, our free e-Bulletin sent out every day at 4:15 a.m. with Noozhawk's top stories, hand-picked by the editors.

Sign Up Now >