Monday, January 1, 2018

On the "financialization of the economy" and the betrayal by the elected

We had the perfect chance [to fix the financial industry control over the economy] in 2009, when Barack Obama came in, to disrupt that cycle and get back to being an economy that actually produces things rather than an economy that shuffles financial instruments back and forth. And we didn’t do it. We thought we did, we thought we were voting for that, but our leadership chose not to go in that direction.

The World's population was betrayed to keep those in power, in power, 
by a US President voted into office to go after the bad guys, who did the opposite

PAUL JAY: And I think an expression of the power of finance, they selected a guy who could feint left, and when he comes to power, appoint Wall Street as his financial team.

And then we did it again, only with a different set of the same kind of people

THOMAS FRANK: Yeah. Well, that was the big disappointment for me, is watching Barack Obama deal with the financial crisis, and basically right off the bat, it was apparent that he –I mean, not apparent to me, of course, I was very hopeful, as the phrase went at the time — that he was going to take the steps that needed to be taken. And by that, I mean that he was going to do what Franklin Roosevelt did to the banks back in the early 1930s.

PAUL JAY: And had control of Congress and could’ve done it.

THOMAS FRANK: And then he had the bailout mechanism. He had seats on their boards. He had everything at his disposal, including prosecuting these people for fraud. They were dealing in something called “liar’s loans.” They were packaging them up and selling them to retirees in Germany. This is so bad in so many ways. And as we all know, they were designing financial instruments to blow up in people’s faces, the people who bought it. They were doing all this deliberately. We know this is true. It would’ve been hard to prosecute them because they have good lawyers, but you still have to do it. You’re the president.

PAUL JAY: And not a single prosecution at a senior level.

THOMAS FRANK: Not a single one. That’s right. He didn’t even fire them. This is the other thing. Barack Obama had every authority over these guys. If you go back and look at what Roosevelt did in the ’30s, his bailout agency constantly was firing bankers from their positions because the government basically owned the banks because it had bailed them out. By virtue of bailing them out, they had power over them, and he could remove, and he did remove bankers from leadership positions all the time from management. Obama never even did that. Now, he did fire the CEO of General Motors, which they also bailed out. But no, he didn’t lift a finger with the banks.

PAUL JAY: But in terms of the banks and who gets bailed out and the inequality of it is why they lose control of Congress.

THOMAS FRANK: When Barack Obama was running for president, he said, and he actually did say this, this is not just hopeful thinking by a sappy liberal from Kansas, but he said that we were not just going to bail out Wall Street, we were going to do something for homeowners as well. They never did it. They just never did it. And they never even did anything for small banks. Small banks all over America went out of business in those days. There was this huge die-off of small banks.

And they never got crammed down … You remember this? This is one of the early fights. There were a whole series of things, of battles in the early Obama years where he was required to choose sides between Wall Street and Main Street, and he persistently chose to side with Wall Street on basically every issue that came up.

THOMAS FRANK: Obamacare. There was all of this debate at the time, whether it was right for president to stop focusing on the economy and start moving to healthcare. I didn’t really have a problem with that. Healthcare is the great sort of … You’re from Canada. You know this. This is the great unfinished sort of aspect of the American welfare state. We got Medicare but no more, and so many Democrats have tried to get some form of national health insurance, and they’ve always failed. Well, here comes Obama, and he’s going to try.

I was very happy with that. What made me unhappy was that the solution that they settled upon, Obamacare, this massively complicated thing, and the reason it’s massively complicated is because it’s all about making sure that private, for-profit health insurance companies stay viable and continue to make profits. They get written into it.

PAUL JAY: And don’t touch pharma.

THOMAS FRANK: You’re going to have a national system where these guys continue to make these exorbitant profits all the time. How is that going to work?

THOMAS FRANK: Trump is out there … By the way, to get back to Trump, every conversation leads to Trump these days, Trump actually was banging Hillary over the head with Goldman Sachs, was actually using that against her, and now look who’s the Secretary of the Treasury. It’s unbelievable that they’re able to get away with it, but they are. How do they do that? Now, that’s a really good question. How does a party like the Republicans come off pretending to be on the side of the ordinary people? Well, they do. They do it again and again and again. This is one of their themes, is populism. It’s fake populism, but they’re very good at it.

PAUL JAY: Now, you’ve been to these places recently.

THOMAS FRANK: I want to see economic protests in action like you had in the 1930s. We know it’s going to happen. I want to see it with my own eyes.

It’s like, look at this silly, made-up protest, the Tea Party movement. I’ll be damned, it caught on. It was a genius move in this sense, they made up a fake protest movement for hard times, and I mean they made it up. They said, “Well, hard times. You got to have a protest movement. Let’s get out there and make one. Let’s do it.” And they did, and they managed to change the subject from getting tough with Wall Street to deregulating Wall Street.

You go around to these towns that we’ve been describing, these Trump voting areas, and you talk to people, you talk to working-class people, and they are furious with what is happening to their lives. And maybe it’s happening to them personally or maybe it’s not. Maybe they got a pension, maybe they’re retired, maybe they’ve got a secure job, but they can see it coming for their kids, that there are no good jobs anymore. Everybody knows it, and everybody is so angry about it.

So look at the Democrats. Here’s the party that should traditionally be in touch with that anger and speaking … They used to be the party of organized labor. They should know about this. Instead, they’re out there campaigning and saying, remember what Hillary was saying, America is already great. This is poison, this is toxic to be putting out that message in a year like 2016.

PAUL JAY: I was saying to you earlier, the night before the election, everyone thought Hillary was going to win, so did I. But the night, they did a final rally in Philadelphia, and Barack Obama was on stage next to Hillary and spoke, and it was all about the great achievements of the administration.

THOMAS FRANK: Yeah. This is the dilemma. Because they loved that man. They love Barack Obama, and they can’t acknowledge that the economy got worse under his watch.

PAUL JAY: Not for everybody.

THOMAS FRANK: Yeah. There’s a famous quote from Hillary. Actually, it’s not famous because it’s in … Where is it? I think it’s in Donna Brazile’s book. It’s in one of the campaign books. Hillary says, “But how can I say those things without people thinking I’m criticizing Barack Obama?” She just couldn’t do it.

PAUL JAY: Even Bernie held back.

THOMAS FRANK: She couldn’t bring herself to do it. So I was at the Democratic Convention, and someone did give a very fiery speech, and it was Elizabeth Warren, and she did talk about, everything I’ve said, she talked about. The problem is she’s railing against these things, and here’s the President of the United States sitting up there in the box, the box seat up there. She never mentioned him of course. She can’t. She’s in the same party. So they have this terrible problem that they love Obama, but they’re very upset. They can see the pain out there in the country, but they can’t criticize it.

PAUL JAY: I think the last thing on earth Wall Street wants is a Sanders or a Sanders-esque and maybe Elizabeth Warren.