From The Return of the Shadow by Robert Fitch
For those who missed the '90s movie re-make, starring Alec Baldwin, The Shadow first aired in 1930 as a popular radio detective show, featuring Orson Welles as Lamont Cranston, a wealthy playboy and man about town who assisted the forces of law and order. What rendered him so valuable was his uncanny ability to cloud men's minds so that he appeared invisible. Only his companion, the lovely Margot Lane, was aware of his secret powers.
True, Obama is anything but invisible: but like Lamont Cranston, he uses his power to cloud men's minds in the service of the established order -- in this case the FIRE industry (finance, insurance, and real estate) and particularly the shadow banking industry. That's the complex of investment banks, hedge funds, private equity bankers, and monoline insurers whose leveraged trading, securitization, and innovative derivative products defined the great boom up until September of last year. Since then, the value of the U.S. securities held by financial institutions has fallen by many trillions;5 and the institutions themselves have suffered a comparable loss of credibility. A recent Harris poll showed that Wall Street's approval rate is now lower than any other institution in the U.S. Only 4% of the American people say they have confidence in Wall Street.6 Obama and Wall Street have become a couple. But, somehow, Obama has been able to make the bond invisible.
What I would like to argue is that, in terms of policy, personnel, and political ideology, Obama is the anti-Roosevelt. While Obama has achieved American Idol status despite his embrace of Wall Street, FDR became a charismatic folk hero, in no small part because he defined himself as the scourge of Wall Street: Roosevelt offered himself as the leader in a fight against the "economic royalists" who, he charged, "had concentrated into their own hands an almost complete control over other people's property, other people's money, other people's labor -- other people's lives."7 He shut down all the banks on the third day of his administration; days later, he took the U.S. off the gold standard shocking Wall Street's hard money men and their representative at the Fed, whose autonomy he reduced to narrow dimensions. When Senate leaders tried to scuttle Committee Counsel Ferdinand Pecora's investigations into the causes of the crash, Roosevelt stopped them. Pecora's hearings not only exposed Wall Street's recklessness and criminality; they demystified and even belittled the financial titans of the era -- not excluding the giant of them all J. P. Morgan, Jr. -- who raged against the breach of protocol abetted by Pecora who allowed a circus midget to jump into Morgan's lap.8 FDR responded to Morgan's concern by making Pecora head of the newly established Securities and Exchange Commission.
The SEC was one of the products of the Glass-Steagall Act. Glass-Steagall vastly reduced the concentration of U.S. financial power by dividing banking into commercial and investment components, neatly splitting the House of Morgan in twain. And reducing the investment banks' sources of capital and the commercial banks' penchant for risk.
Roosevelt knew clearly who he was taking on: "The real truth of the matter," wrote FDR in 1933 to Colonel House, "is as you and I know that a financial element in the larger cities has owned the government since the days of Andrew Jackson -- and I am not wholly excepting the Administration of Woodrow Wilson. This country is going through a repetition of the Jackson fight with the Bank of the U.S. -- only in a far bigger and broader scale."9
In a word, FDR's goal was to save capitalism from finance capitalism; Obama's, I would suggest, is to save capitalism by saving finance capitalism.
~ more... ~
No comments:
Post a Comment