Bailout Bandits

In these days of ​“bank stablization plans” (bailouts for fat cats) and ​“overseas contingency operations” (wars), Americans who celebrated President Obama’s victory last November are beginning to recognize that ​“change we can believe in” is now endangered by serious obstacles, including obstructionist personalities within the administration itself. 

What are Obama’s progressive supporters to make of the fact that Lawrence Summers (who crafted banking deregulation during the Clinton administration) is Obama’s chief economic vizier? Or the fact that Treasury Secretary Timothy Geithner, a Summers protégé, seems determined to address the economic crisis by protecting the banking industry executives with whom he was cosseted for the past five years as head of the Federal Reserve Bank of New York?

As David Moberg writes in ​“The Meltdown Goes Global,” Geithner’s reforms exclude ​“breaking up institutions that are now ​‘too big to fail,’ banning many derivatives, and treating financial institutions as tightly regulated public utilities.” In fact, Geithner’s policies may greatly enrich the very people who made out like bandits thanks to the Summers-orchestrated banking deregulation that led to the present crisis. 

On the Center for American Progress website, Michael Ettlinger and David Min, had this to say about Geithner’s Public-Private Investment Program (PPIP) to manage toxic assets: ​“One shadow over this proposal is that we may end up subsidizing an enormous windfall for wealthy participants in hedge funds and their kin…The profits to be made on the approximately $2 trillion of PPIP [toxic] assets sitting on bank balance sheets could make the [AIG] retention bonuses causing such an uproar seem like peanuts.” 

So, where is the outrage? 

On March 30, Newsweek gave us the cover story ​“The Thinking Man’s Guide to Populist Outrage.” One contributor, Robert J. Samuelson, warned against ​“anger that could veer into a vindictive retribution.” For example, ​“The AIG hearing last week often seemed a political gang beating.” While Newsweek Editor Fareed Zakaria told us, ​“The trouble with populist outrage is that it bubbles over.” The message: populist outrage must be kept in check. But what might change if we just let it flow?

It doesn’t help that few political venues exist for people to express their concerns. 

The Obama campaign apparatus, an amazing organization that might have become an independent vehicle for progressive pressure and mobilization, is under tight White House control and has been drafted to support Obama’s economic policies. And while MoveOn​.org fulminates against AIG’s executive bonuses, it has so far failed to question the assumptions behind the administration’s cash-for-trash schemes and unleash its 5 million-plus members on either Summers or Geithner. 

Online organizing has been key to revitalizing the American progressive movement. But perhaps it’s time for us to set aside our laptops and learn a lesson from the old school. In this issue (May, 2009), I review At Home in Utopia, a fascinating documentary about a cooperative living experiment launched by New York Jewish radicals in the 1920s. In 2009, it is worth remembering that the rich history of the American left offers us a panoply of tactics and strategies with which to fight injustice and confront power. 

Yes, sometimes a Facebook group or e-mail campaign just won’t cut it. 

On a different note, with this issue we say a sad goodbye to three irreplaceable members of the In These Times staff: Sanhita SinhaRoy, Brian Cook and Jeff Allen.