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January 2009

Volume 22, Number 1
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Bailout & Sellout
Edward Herman


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Bailouts & Sellouts

By Edward Herman
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It is amazing to see sums now running into the trillions being allocated almost entirely to substantial market players, many of whom were heavily involved in producing the financial debacle we are now suffering. The priorities of the U.S. establishment, including both the leading Democrats as well as the Republicans and mainstream media, are clear—at the top for funds and solicitude are the military-industrial complex and those involved in the imperial projection of power, along with the country's overlapping business and financial elite. There is a big gap then before we get to the middle class; and much of the lower middle class and poor are treated as disposable and even threats.

What follows is, first, that the military and imperial-expansion budget, now greater than a trillion dollars, larded with incredible waste and fraud as well as overkill, and provoking a global arms race while funding the destabilization of the world, is for all practical purposes outside the orbit of discussion about how we deal with a financial crisis and serious shortage of resources for the civil society.

In the case of the financial crisis and bailout, it is remarkable how much money can be mobilized very quickly to rush to the aid of the big boys—at the expense of the taxpayer—in contrast with the invariable struggle and pain to provide relatively small sums for the benefit of ordinary citizens and even more struggle and elite anger to provide resources for the disposables and poor. Of course this is a crisis that threatens systemic disaster. But there are many crises involving millions that are chronic and serious—such as the condition of the urban poor, of the New Orleans refugees, even a wide swathe of the middle class, and the fantastic growth of imprisonment—that don't produce an aura of crisis or financial resources to cope (except with police and prisons).

One must also be struck by the fact that management of the crisis was left in the hands of people who urged policies that led to the unfortunate result, and failed to see it even as it gathered steam. There is also the matter of gross conflict-of-interest in centering management of the financial crisis in the hands of Henry Paulson, straight from one of the crisis producers, Goldman Sachs. Mister Conflict-Of-Interest even doled out public money to his own firm as well as to that firm's clients; Mister Steady Bungler also made policy misjudgments and shifts on a weekly basis, without threat to his authority. This is a manifestation of power, displayed throughout this business society, where, for example, labor funding or sponsoring of a PBS program can be ruled out on conflict-of-interest rules, but massive and regular business funding is not questioned. Business conflict-of-interest is normalized across the board.

Paulson can dole out these huge funds without advance notice to any independent parties, or full disclosure of recipients or terms; and where terms are disclosed, they are usually vague, not taxpayer friendly, and fail to give the government powers commensurate with the taxpayers' investment and risk. The notion that this is "Bush socialism" is nonsensical, on a par with making Bush a socialist in paying out taxpayer money to Halliburton and Blackwater for their work in Iraq. The Bush cabal has been throwing vast sums into private hands via war contracting and privatization for years. This is looting, not socialism.

It is also notable how bipartisan the looting has been. Bipartisanship is a virtue of the Democratic Party, and the mainstream media are pleased to see that Party so bipartisan and "pragmatic," meaning that they avoid populism and are willing, even eager, to compromise with the Republicans even when their voting constituency wants them to do otherwise. Obama seems to be clearly in that great tradition, being openly commended by Karl Rove, Joe Lieberman, Max Boot, John McCain, and David Brooks for his appointments (see Jeremy Scahill, "'Better Than Cats!,' Neocons, Republicans, War Criminals, Rave About Obama's 'Team of Rivals'," Huffington Post, November 30, 2008), and mentioned explicitly in the New York Times for his bipartisanship and courting of the Republicans for policy inputs (Jeff Zeleny, "Initial Steps by Obama Suggest a Bipartisan Flair," NYT, November 24, 2008). The contrast with the Republicans' treatment of Bill Clinton, and George W. Bush's appointments of Republican hardliners nearly across the board, could hardly be more dramatic.

The media don't press the Republicans toward bipartisanship and pragmatism, only the Democrats, and the Democrats oblige. They have voted to fund the looting of taxpayers (and Iraqis) throughout the invasion-occupation of Iraq. Of course, it is important that they kept doing this even after the voters gave them a congressional majority in 2006, quite evidently based on the public's rejection of the Iraq policy and desire to get out. (Democratic leaders rationalized this on the grounds that they didn't have the 60 votes needed to override a veto; but they had enough votes to refuse funding till conditions were met that forced withdrawal, a power which they failed to use.) In the bailout looting, Nancy Pelosi made a vigorous effort to get the Democrats to go along with the initial $700 billion blank check to Paulson and she has been bipartisan all the way on this subject, just as she, Harry Reid, and Rahm Emanuel were bipartisan with Bush-Cheney on funding the Iraq occupation-pacification.

We should also note that Pelosi has showed her pragmatism and bipartisan qualities in now promising to go after New York Democratic congressperson Charles Rangel, "after a wide-ranging House investigation into ethical questions" (Raymond Hernandez, "Pelosi says Inquiry Into Ethics Questions Concerning Rangel Will Move Swiftly," NYT, November 27, 2008), while maintaining her "off the table" stance for Bush impeachment for serial violations of the U.S. Constitution, the UN Charter, and the Geneva Agreements. Of course, Pelosi going after the Bush-Cheney cabal for violation of the Geneva Agreements would have run into the problem that while on the House Intelligence Committee she was told about the use of water-boarding in 2002 and did not object. Prosecution of Bush and Cheney for such legal violations would have been awkward not only on water-boarding, but based on Democratic votes on war funding, the PATRIOT Act, and the Military Commissions Act. Illegal war, constitution busting, and torture have been bipartisan.

One of the most depressing features of the 2008 election was that "liberal" San Francisco Democrats voted Pelosi back to the House in a crushing primary victory over Cindy Sheehan and then in an easy victory in the general election as well. Pelosi should actually be impeached for her failure to pursue a Bush-Cheney impeachment, given her obligation to uphold the Constitution. Pelosi epitomizes Democratic pragmatism, bipartisanship, and the sellout of ordinary citizens, but she thrives—is easily reelected, was lauded by Joan Claybrook of Public Citizen ("Pelosi Leads Democrats With Progressive Politics," Public Citizen, September-October 2007), and was even invited to speak at a gathering of liberal media activists at the Kos-organized Net-Roots Nation conference in Austin, Texas in July 2007.

It is interesting that for a target country, like Serbia, or with the Khmer Rouge in Cambodia (Kampuchea), "moving forward" somehow requires that villains be tried and punished for past crimes so that victims can be satisfied with some kind of "justice" and potential villains can learn that crime doesn't pay. But the idea that this might apply to the United States is confined to a fringe left and a human rights body like Amnesty International, which calls for precisely what the United States and its toadies call for in the case of targets—"criminal investigations…reject impunity for crimes under international law…ensure that victims of human rights violations…will have meaningful access to redress and remedy" (AI, "USA: Counter Terror with Justice: A checklist for the next US President," November 5, 2008).


Bush, Cheney, and company are not only not removed from office before their term is up, or threatened with prosecution later, they can continue to enact rules and orders benefiting their cronies, at taxpayer expense, up to their last moment in office and without impediment. The real surprise is that they haven't started another war, though they may still do that (this is written on December 4, 2008). But they have proved that in this country and in this global environment, U.S. leaders can get away with huge crimes, endless lying, facilitating massive crony capitalist theft, and constitution busting. There seems to be no impunity limit for U.S. leaders that serve the military-industrial complex and business and financial elite so well, even if crudely, incompetently, and perhaps even to elite disadvantage.

Although George Bush I was exceedingly vulnerable to an investigation of his relations with Saddam Hussein (weapons supply and loans), the Clinton administration declined to pursue this, in a familiar (Democratic) act of bipartisanship. Clinton was rewarded by steady Republican attacks, regular non-cooperation, even a temporary government shutdown, and eventually impeachment. The likelihood that President Obama will support the investigation and prosecution of the Bush-Cheney administration's far more extensive and serious crimes is close to zero. Two Obama advisers have reportedly stated, "There's little, if any, chance" of the Obama administration prosecuting those who authorized or implemented torture (Lara Jakes Jordan, "Obama advisers: No charges likely against workers who authorized harsh interrogation methods," AP, November 18, 2008): it would violate the principles of bipartisanship so dear to the Democrats and encouraged by the media. And the Democrats are not only badly compromised themselves, they too have internalized the belief that international law does not apply to this country. Hence, "justice" for "them," "impunity" for "us."

We seem to be entering another era of Democratic "moves to the center" and, instead of "creating a new reality," adjustment to the existing reality of power.

Z

 

Edward S. Herman is an author, economist, political columnist, and media critic.

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