Matt Taibbi: Obama’s Big Sellout

By Edward Harrison of Credit Writedowns

Matt Taibbi is one of the few commentators in the mainstream media who is not worried about ‘access’ and has, therefore, been free to write much more critically about the economic crisis and reform efforts on Wall Street.

His first piece was a polemic against Goldman Sachs, which triggered a backlash against the venerated Wall Street firm due to its incestuous relationship with Washington.  Afterwards, he took on health care reform. Now, he is taking on the Obama Administration and its status quo bias. I have an excerpt below and a link to the full article. But, first, let me say a few words.

As you probably know, I have been quite disappointed with this Administration’s leadership on financial reform. While I think they ‘get it,’ it is plain they lack either the courage or conviction to put forward a set of ideas that gets at the heart of what caused this crisis. 

It was clear to many by this time last year that the President may not have been serious about reform when he picked Tim Geithner and Larry Summers as the leaders of his economic team.  As smart and qualified as these two are, they are rightfully seen as allied with Wall Street and the anti-regulatory movement. 

At a minimum, the picks of Geithner and Summers were a signal to Wall Street that the Obama Administration would be friendly to their interests. It is sort of like Ronald Reagan going to Philadelphia, Mississippi as a first stop in the 1980 election campaign to let southerners know that he was friendly to their interests.

I reserved judgment because one has to judge based on actions. But last November I did ask Is Obama really “Change we can believe in?” because his Administration was being stacked with Washington insiders and agents of the status quo.

Since that time it is obvious that two things have occurred as a result of this ‘Washington insider’ bias.  First, there has been no real reform. Insiders are likely to defend the status quo for the simple reason that they and those with whom they associate are the ones who represent the status quo in the first place. What happens when a company is nationalized or declared bankrupt is instructive; here, new management must be installed to prevent the old management from covering up past mistakes or perpetuating errors that led to the firms demise. The same is true in government.

That no ‘real’ reform was coming was obvious, even by June when I wrote a brief note on the fake reform agenda. It is even more obvious with the passage of time and the lack of any substantive reform in health care.

Second, Obama’s stacking his administration with insiders has been very detrimental to his party. I imagine he did this as a way to overcome any worries about his own inexperience and to break with what was seen as a major factor in Bill Clinton’s initial failings. While I am an independent, I still have enough political antennae to know that taking established politicians out of incumbent positions (Joe Biden, Janet Napolitano, Hillary Clinton, Rahm Emanuel, Kathleen Sebelius or Tim Kaine) jeopardizes their seat.  So, the strategy of stacking his administration has not only created a status quo bias, but it has also weakened his party.

That’s it. I’ve said my piece.  Here is the Taibbi excerpt now. I don’t agree with everything Taibbi says and his tone is a lot more apoplectic than mine; but that is mostly stylistic. On the major point – that the Obama Administration is more of the same – he is right.

Here he talks about the Citi bailout

“Just look at the timeline of the Citigroup deal," says one leading Democratic consultant. "Just look at it. It’s fucking amazing. Amazing! And nobody said a thing about it."

Barack Obama was still just the president-elect when it happened, but the revolting and inexcusable $306 billion bailout that Citigroup received was the first major act of his presidency. In order to grasp the full horror of what took place, however, one needs to go back a few weeks before the actual bailout — to November 5th, 2008, the day after Obama’s election.

That was the day the jubilant Obama campaign announced its transition team. Though many of the names were familiar — former Bill Clinton chief of staff John Podesta, long-time Obama confidante Valerie Jarrett — the list was most notable for who was not on it, especially on the economic side. Austan Goolsbee, a University of Chicago economist who had served as one of Obama’s chief advisers during the campaign, didn’t make the cut. Neither did Karen Kornbluh, who had served as Obama’s policy director and was instrumental in crafting the Democratic Party’s platform. Both had emphasized populist themes during the campaign: Kornbluh was known for pushing Democrats to focus on the plight of the poor and middle class, while Goolsbee was an aggressive critic of Wall Street, declaring that AIG executives should receive "a Nobel Prize — for evil."

But come November 5th, both were banished from Obama’s inner circle — and replaced with a group of Wall Street bankers. Leading the search for the president’s new economic team was his close friend and Harvard Law classmate Michael Froman, a high-ranking executive at Citigroup. During the campaign, Froman had emerged as one of Obama’s biggest fundraisers, bundling $200,000 in contributions and introducing the candidate to a host of heavy hitters — chief among them his mentor Bob Rubin, the former co-chairman of Goldman Sachs who served as Treasury secretary under Bill Clinton. Froman had served as chief of staff to Rubin at Treasury, and had followed his boss when Rubin left the Clinton administration to serve as a senior counselor to Citigroup (a massive new financial conglomerate created by deregulatory moves pushed through by Rubin himself).

Incredibly, Froman did not resign from the bank when he went to work for Obama: He remained in the employ of Citigroup for two more months, even as he helped appoint the very people who would shape the future of his own firm. And to help him pick Obama’s economic team, Froman brought in none other than Jamie Rubin, a former Clinton diplomat who happens to be Bob Rubin’s son. At the time, Jamie’s dad was still earning roughly $15 million a year working for Citigroup, which was in the midst of a collapse brought on in part because Rubin had pushed the bank to invest heavily in mortgage-backed CDOs and other risky instruments.

Now here’s where it gets really interesting. It’s three weeks after the election. You have a lame-duck president in George W. Bush — still nominally in charge, but in reality already halfway to the golf-and-O’Doul’s portion of his career and more than happy to vacate the scene. Left to deal with the still-reeling economy are lame-duck Treasury Secretary Henry Paulson, a former head of Goldman Sachs, and New York Fed chief Timothy Geithner, who served under Bob Rubin in the Clinton White House. Running Obama’s economic team are a still-employed Citigroup executive and the son of another Citigroup executive, who himself joined Obama’s transition team that same month.

So on November 23rd, 2008, a deal is announced in which the government will bail out Rubin’s messes at Citigroup with a massive buffet of taxpayer-funded cash and guarantees. It is a terrible deal for the government, almost universally panned by all serious economists, an outrage to anyone who pays taxes. Under the deal, the bank gets $20 billion in cash, on top of the $25 billion it had already received just weeks before as part of the Troubled Asset Relief Program. But that’s just the appetizer. The government also agrees to charge taxpayers for up to $277 billion in losses on troubled Citi assets, many of them those toxic CDOs that Rubin had pushed Citi to invest in. No Citi executives are replaced, and few restrictions are placed on their compensation. It’s the sweetheart deal of the century, putting generations of working-stiff taxpayers on the hook to pay off Bob Rubin’s fuck-up-rich tenure at Citi. "If you had any doubts at all about the primacy of Wall Street over Main Street," former labor secretary Robert Reich declares when the bailout is announced, "your doubts should be laid to rest."

It is bad enough that one of Bob Rubin’s former protégés from the Clinton years, the New York Fed chief Geithner, is intimately involved in the negotiations, which unsurprisingly leave the Federal Reserve massively exposed to future Citi losses. But the real stunner comes only hours after the bailout deal is struck, when the Obama transition team makes a cheerful announcement: Timothy Geithner is going to be Barack Obama’s Treasury secretary!

Geithner, in other words, is hired to head the U.S. Treasury by an executive from Citigroup — Michael Froman — before the ink is even dry on a massive government giveaway to Citigroup that Geithner himself was instrumental in delivering. In the annals of brazen political swindles, this one has to go in the all-time Fuck-the-Optics Hall of Fame.

Wall Street loved the Citi bailout and the Geithner nomination so much that the Dow immediately posted its biggest two-day jump since 1987, rising 11.8 percent. Citi shares jumped 58 percent in a single day, and JP Morgan Chase, Merrill Lynch and Morgan Stanley soared more than 20 percent, as Wall Street embraced the news that the government’s bailout generosity would not die with George W. Bush and Hank Paulson. "Geithner assures a smooth transition between the Bush administration and that of Obama, because he’s already co-managing what’s happening now," observed Stephen Leeb, president of Leeb Capital Management.

Taibbi assumes intent and damns the actors as a result. He writes as if Froman and Geithner openly colluded in some way to favour Citi. But you don’t need to prove intent, you only need to prove motive. I don’t care if Froman or Geithner ‘intended’ to favour Citi over other institutions; I care whether they were mentally predisposed to helping Citi and other large institutions at the expense of others because they ascribed unwarranted and disproportionate importance to them. Unfortunately, cognitive regulatory capture leads to crony capitalism just as outright corruption would do.

There is a lot more at the link below.

Obama’s Big Sellout – Matt Taibbi, Rolling Stone

Print Friendly, PDF & Email
This entry was posted in Banana republic, Banking industry, Curiousities, Regulations and regulators on by .

About Edward Harrison

I am a banking and finance specialist at the economic consultancy Global Macro Advisors. Previously, I worked at Deutsche Bank, Bain, the Corporate Executive Board and Yahoo. I have a BA in Economics from Dartmouth College and an MBA in Finance from Columbia University. As to ideology, I would call myself a libertarian realist - believer in the primacy of markets over a statist approach. However, I am no ideologue who believes that markets can solve all problems. Having lived in a lot of different places, I tend to take a global approach to economics and politics. I started my career as a diplomat in the foreign service and speak German, Dutch, Swedish, Spanish and French as well as English and can read a number of other European languages. I enjoy a good debate on these issues and I hope you enjoy my blogs. Please do sign up for the Email and RSS feeds on my blog pages. Cheers. Edward


  1. earthtodc

    “cognitive regulatory capture leads to crony capitalism just as outright corruption would do”

    WTF is the difference? This is not rocket science. There is a guy running from a burning building with arm fulls of cash, now on the phone calling his buddies to tell them to “get down here” and you want to worry about the intent of the original act of arson. All of the evidence is being destroyed anyway by the firefighters pumping gasoline into the fire.

  2. junker rote

    It is a heist. Yves and Taibbi deserve credit for good work. Now the rest of us need to ask if we could use RICO statutes to break up Rubin’s crime syndicate. Or maybe the Mortgagesausagists could be brought in front of the Hague for crimes against humanity. The food riots are coming!

  3. Ina Pickle

    I’ve said it before and I’ll say it again: if you expect change, why do people keep electing/appointing the same cabal from Harvard and Yale? These people all went to school together, had their brains molded by the same ideas, institutions, and people, and then are supposed to, what — prosecute a former classmate for the benefit of a bunch of peons who went to some midwestern state school?

    As long as those who attended a group of — at MOST 5 — schools consider themselves the elite, and as long as those people learn, work, socialize, and live together in a tight clique, it really doesn’t matter which side of the table you are on at the moment.

    If you want different thinking, you need someone from outside the group taught to think by the same folks.

    1. Edward Harrison Post author

      Nonsense. Yves is a Harvard Grad and I graduated from Dartmouth, the same school as Geithner and Paulson. By your words, we are also brainwashed in the same way of thinking.

      You can’t make sweeping statements like this. You have to judge based on action not by association.

      1. charcad

        Edward, by time you’d be persuaded this gang will have gotten clean away and be busy on the next caper.

        1. Jason Rines

          Thank you Charcad for your response to me on my comment on timing and potential conditions coming to the USA. The crime syndicate doesnt have many more countries to loot. The Chinese arent going to play like some think. Drop by my social network so we can someday speak on video conference. Take care.

      2. Dan Duncan

        Edward, then I take it you don’t have a problem with all the Goldman Sachs appointments? After all, we must “judge based on action not by association”.

        Ina Pickle does bring up a good point.

        I don’t know if a more balanced representation of educational institutions would make a difference at the higher levels of our government…but damn…I doubt it would hurt.

        It would be refreshing to have someone in a higher office be from Purdue or University of Wisconsin. Or, God forbid…what if they just graduated from high school, went to work, excelled and decided to go into civil service to give something back?!?! [Oh, the horrors!]

        I know many people from Ivy schools to state schools to the “college is a waste of time” school…

        And I gotta say, there’s no discernible difference in who would make a better leader or civil servant. None.

        As a culture, we give way too much deference and respect on the basis of going to an Ivy School. As a result, we have dramatically reduced the pool of prospective leaders.

        1. Dennis

          That is great and all but how do you value this?
          If you strip out the legacies and the minorities, to get into Harvard or Yale you had to done pretty well in high school. Better than someone who ended up going to Michigan state for example.

          We live in a system were overt meritocracy rules — and getting into a hard-to-get-into institution is the way to demonstrate this.

          1. Dan Duncan

            “We live in a system were overt meritocracy rules — and getting into a hard-to-get-into institution is the way to demonstrate this.”

            Fair enough.

            But at some point the merit awarded for good grades in high school should expire…or at least get diluted just a little.

            But, if we are going to give this undue weight to where someone went to school 20-40 years ago, I’ll take my chances with a electrical engineer from Michigan State way before doing so with a gender studies grad from Harvard or Yale.

            The EE major from MSU had a much more rigorous and challenging education than the gender studies grad. It’s not even close. This is another way to demonstrate “overt meritocracy”…yet it is never taken into consideration.

          2. Peripheral Visionary

            Not quite. After you take out the legacies and minorities, what you have left are the children of big donors, and that’s about it. A close relative with flawless high school credentials and every academic honor the school could bestow on him, and a host of extracurricular accomplishments to boot, was turned down for entrance to a major Ivy League school; he did not even make it to the interview stage. When impeccable academic credentials are insufficient to gain admission, it’s clear that the primary criterion is demography rather than merit.

            At this point, the meritocracy of the Ivy League schools is a thing of the past, with academic credentials having been almost completely eclipsed by connections and money (graduate programs less so, although I think there still are tendencies in that direction; see Bush, George W.) That reinforces the point that the Ivy League schools have become institutions run by and for the elite of society; not the American ideal of individual accomplishment as much as the European tradition of class privilege.

            That does not preclude the possibility of independent voices coming out of those institutions, and I certainly agree that we should be viewing people on accomplishments rather than background (something the Ivy League does not always do in its admissions process.) But it definitely reinforces the picture of our leadership as living in a closed society where they are disconnected from the general population, and where they look out for their own interests rather than maintaining an open system.

          3. Borealis

            “We live in a system were overt meritocracy rules — and getting into a hard-to-get-into institution is the way to demonstrate this.”

            But at some point the people who got into elite institutions are supposed to stand and deliver – not just coast on the merit (really, the *potential* for achievement) that they displayed in their early days. This potential is supposed to translate into *results*. This means that in government, it should translate into demonstrated superiority in quaint stuff like “securing the general welfare” and “promoting the national interest”.

            If our meritocratic selection system just results in the rule of a bunch of very able and self-interested gangsters (who are indisputably demonstrating a great deal of “merit” by the standards of that avocation), then *obviously* something has gone wrong with the present selection system. “Merit” is not some abstract attribute unrelated to actual accomplishment. An “elite” deserves support when it can run things better than the non-elites, for the general benefit. Not that all elite classes are not naturally self-seeking, but when they get out of control, they no longer serve any useful function in society. An elite without a code of civic duty destroys the only legitimate argument for its existence. Sorry, but “I have earned the right to screw you and destroy your children’s futures because I’m much smarter and more talented than you” is not an argument for maintaining a particular system of meritocratic selection.

            My jaw dropped recently when I came across some MSM type defending Bernanke’s fitness for his position, not by enumerating his real-world efficacy in that role, but by, God help us all, worshipfully referencing his…wait for it…really high SAT scores! Man, talk about losing sight of the whole point of having a system of meritocratic selection in the first place. It’s to identify people who are likely to do a job better than others. If they are manifestly failing, the “merit” is lost, or was an illusion in the first place.

          4. DownSouth

            Your friends are not religious: they are only pew-renters. They are not moral: they are only conventional. They are not virtuous: they are only cowardly. They are not even vicious: they are only “frail.” They are not artistic: they are only lascivious. They are not prosperous: they are only rich; not courageous: only quarrelsome; not masterful, only domineering…

            –Bernard Shaw, Man and Superman

          5. JerryDenim

            First let me say yes, I absolutely agree with Mr. Harris: Of course you can’t make some foolish overarching blanket statement like everyone who graduated from an Ivy is bad, stupid, evil, etc. etc. I know some very sharp, kind people who have graduated from Ivies.

            Second, I have no real axe to grind with college admission boards at private institutions. It’s their school, funded with money from private donors so they can admit who they please.

            Third, I believe the American dream is still possible for anyone, but it fades a little and becomes harder and harder to achieve each year.

            That being said there is ABSOLUTELY NO WAY America is a meritocracy. Aside from the sick system of cronyism and skewed incentives on display by our government supported banking system I would say there is no better example of an American anti-meritocracy than an Ivy-League university. If you don’t know that then you are clueless as to how they work or perhaps you are one of their many coddled, uber-privileged graduates that are too sheltered and blind to realize just how privileged they are. No one, I repeat no one from my high school in the rural south has ever in its one-hundred plus year history attended an Ivy. One day perhaps there will be someone, but I guarantee they won’t be a white male from a middle income bracket family. Once again, I’m not trying to pick a fight on this front, nor am I lamenting, just stating the way things are. Once you strip away a few pretty faces with heartbreaking stories strategically selected for their PR value I suspect this is the story in school after school across the nation. I know both Harvard and Yale are very fond these days of pointing out just how many Asians make up their student body. Progress indeed on the WASP front, and I’m not arguing that these people aren’t very hard workers, but these kids are hardly plucked solely on merit from a level playing field. They attend some very elite primary and high schools and in the rare instances of public school matriculation they almost all come from schools in very wealthy highly educated districts with excellent reputations.

            To put it very simply; a kid unfortunate enough to graduate from a ‘wrong’ school could earn a 4.0 and score a perfect 1600 but it won’t be nearly enough to get into Harvard while a kid fortunate enough to be born to parent’s willing and able to plunk down 40,000K+ for a single semester’s tuition at an elite New England prep school will be able to easily claim one of the spots reserved for them at Harvard or Yale with a bit of work or they can do very little and still coast into a lesser Ivy like Dartmouth with middling grades and a semi-respectable SAT score. If anyone thinks this is an example of “American Meritocracy” in action I am truly baffled.

            Sorry for this post on a somewhat off topic thread but privileged people who have no idea just how privileged they are, who then proceed to go on about meritocracy, Ayn Rand, hard work, etc making frequent use of Horatio Alger themed platitudes always manage to strike a nerve with me.

        2. Edward Harrison Post author

          I think your point of having a more diverse pool of people to choose from is well-taken. So I do have a problem with the number of people from Goldman in high-level positions.

          I remember answering an ad in the NYTimes back during the original jobless recovery. It said something like “Ivy League grads for…” When I got the interview with the headhunter I asked him, “what if I had gone to UVA or University of Vermont,” two schools I had applied to. I don’t remember his exact answer. It was something unsatisfactory and I have always been left with the impression based on what he said that I would not have gotten the interview. We, as a society, screen people out or in based on some pretty superficial determinants.

          The episode made it clear to me that people judge you based on how you look, how you sound, where you’re from, what institutions you’re affiliated with and who you know. But, this has been the case for time immemorial. It’s worse in France and Britain (HEC/Polytechnique and Oxbridge for example).

          However, Dan, bias cuts both ways and I am witnessing the anti-elite bias to which Sarah Palin speaks in the original comment by Ina Pickle.

          As for the Ivys in Government, they are over-represented but there are plenty of people in the Administration outside that group as well.

          1. JTFaraday

            “However, Dan, bias cuts both ways and I am witnessing the anti-elite bias to which Sarah Palin speaks in the original comment by Ina Pickle.”

            Just because Sarah Palin speaks to it doesn’t render it “off limits.”

            Maybe the *real* problem is that *only* people like Sarah Palin speak to it, and seeking to shut down other voices (again, we’re on this same subject–who gets press platforms?) only endlessly compounds our collective problems.

            And our collective problems are serious.

          2. JTFaraday

            And it’s not like Sarah Palin–and still less the people who listen to her–were part of what people here are calling the “crime syndicate,” a description which seems apt to me.

        3. foreign foodman

          Hello, as someone who as read this blog and the message of the real elite I can say based on my understanding that Purdue and Wisconsin are really much more elite than the Ivy league ones, they are the ones that elite families take their servants from – engineers, web designers, high tech developers, high quality of life providers with innovation. In short – Simple, Sober, Serious people, who do not have immoderate desires fueled by varia of secret societies, improper bounding by giving “secret names” that only the “initiated” know, sexual blackmail and deviation with cameras both moving and still, from young age forward as happens with ivy league graduates, undergraduates who you think rule the system at the top.

          Ivy league schools are places where servants of the people come from. If you think that politicans or public bankers are leaders, I feel sorry for you.

          Accept my compassion.

          As for education, the People say that you need a M.Scs or M.A. or an M.B.A. to conquer the world and be successful are factually correct, but get it from an okay school nearby where you live most comfortably with the highest quality of life – do not waste energy or finances for it like it is the end of the world because paper does not matter as much in the eyes of the real elite. For your B.A. or A.D. or whatever – travel, see the world, feel the pain of being manipulated and undoing the evil done to you inside the educational process. It will make you considerate and compassionate towards other people, their pride that you might and certainly will violently wound, I know you will, so take care to note the pain that you experience, it will limit the damage you will cause when it is your time to take charge of manipulation – you will not be so malicious like those like George Bush…

          My understanding is that in education me and you should expect suffering and hardship with honesty and sincerity and nature will award me and you with knowledge. Hope only to have fun, fun, fun and there is always someone to record your sins and weave an obese thread of slavery or bad quality of life around you…

      3. i on the ball patriot

        Your actions, both you and Yves, constantly call for readers to write to their ‘elected’ government representatives for redress of grievances and to implement your remedial measures. I believe that to the degree that you believe that government is responsive to the will of the people you are both brainwashed. This government has proven time and time again that it is extremely corrupt and NON RESPONSIVE TO THE WILL OF THE PEOPLE, and, that corruption grows worse as each day goes by.

        Schooled at Harvard and Dartmouth, institutions that owe their stature and power to the benefits of aggregate generational corruption (just like the FED), you have both been privy to positions higher up on the food chain, and in the process, I believe, have been subjected to a greater familiarity with, and greater acceptance of (brainwashing if you will), the dysfunctional status quo — the old vanilla greed. Yes, you are children of a dysfunctional family. We all are. Now that pernicious greed has reared its ugly head — and captured the government — we would all like to go back to the good old days of vanilla greed. Clinging to the hope and fantasy of responsive government are symptomatic of that desire. Sadly it is only a hope and a fantasy, Obama, a continuation of Bush, has kicked us all in the ass again, and proved the folly of believing that we have a government that is responsive to the will of the people. We do not.

        Consider also that pernicious greed, which has captured the government, relies strongly on the beliefs of those who were raised on vanilla greed to keep dissipating their resources and energies on the illusion of responsive government. Vanilla greed provided a more equally distributed crumb supply that spanned the pecking order of the system. That more equal distribution of crumbs fostered trust and belief in the two party system of government. Pernicious greed is blowing the middle right out of that system.

        Ina Pickle makes a valid point that has merit — yes — as a generalization only. And, just as there are a few ‘good’ politicians that get through the crooked gate of the crooked electoral process, there are similarly graduates of upper echelon schools that also discover and reject the brainwashing inherent in them.

        But the generalization does carry in the sense that change will not come from within. Positive change will come from the efforts of those who unravel the deceptions and propaganda that they have been imbued with at all levels of society. Some of them will come from within.

        We are all on different parts of the deprogramming trail. I appreciate the work that both of you do.

        As for Taibbi, he intentionally or unwittingly maintains the status quo with his attention to it, and, accenting the intentionally created divisiveness within it. He needs to stop calling the tea baggers “idiots” and persuasively explain to them how and why they have come to believe what they do. This is class warfare, have against have not. It does no good to further the divisiveness.

        Deception is the strongest political force on the planet.

        1. fu manchu

          +1000000 4 i with 1 caveat:

          “has kicked us all in the ass again…”

          if you replaced the ‘ki’ with the 2 letters above, it would be dead on the $.

      4. Seal

        Hey – I went to the ‘Big Green’ also, got kicked out twice, graduated 29 years after my class on appeal, my fraternity bro wrote the screenplay for ‘Animal House’. I am in NO danger of getting appointed for anything. Paulson is a DC graduate.

      5. jake chase

        Anyone who thinks Dartmouth is an elite school clearly never went there. In the sixties, Dartmouth was a second rate prep school staffed by an out of touch faculty lost in an alcoholic haze, where you got to freeze your nuts four months out of the year, slop around in mud for two, enjoy a snowfall the week of graduation, were lucky to get laid five times in four years and pretty much had to commit rape to do that.

        On the day I left I told myself if I never saw a cow again it would be soon enough. It did have an excellent library, however.

    2. alex

      You don’t need to go to an Ivy (I didn’t) to recognize the logical fallacy in your complaint. Just because most of the conspirators went to Ivies doesn’t mean that everybody who went to an Ivy is a conspirator.

      1. jake chase

        Everyone who goes to an Ivy is not a conspirator, but no one who is not a collaborator ever leverages Ivyness into a role in the power structure. Those who refuse to collaborate may succeed at something else, or they may sink into oblivion or articulate criticism, which is pretty much the same thing.

        Surely you have noticed: the business and financial and governmental worlds run on bullshit and mendacity. If any of these celebrated clowns understands any truth, he keeps it to himself, and you cannot pry it out of him even under torture.

    3. Vangel

      By your words, we are also brainwashed in the same way of thinking.

      From what I have seen, Harvard and Dartmouth are not exactly producing all that many graduates that favour free markets and unhampered economies. In fact, their selling points is that they produce graduates to fill the ranks in government bureaucracies that will markets and manage economies.

      You can’t make sweeping statements like this. You have to judge based on action not by association.

      I agree with you. Sweeping general statements are useless and usually wrong. What matters are actions.

      1. alex

        “Sweeping general statements are useless and usually wrong.”

        I don’t think you can make sweeping generalizations about sweeping generalizations.

  4. Protect & Serve

    Headline of the day: Obama accepts peace Nobel, defends “just war”;_ylt=AusVTfFV2lXRunb8fBPsYu6s0NUE;_ylu=X3oDMTFlYWdlOTZnBHBvcwM3MQRzZWMDYWNjb3JkaW9uX3BvbGl0aWNzBHNsawNvYmFtYWFjY2VwdHM-

    I believe another Bob Dylan song from ‘Infidels’ is the song of the day

    Man of Peace (Bob Dylan)

    Look out your window, baby, there’s a scene you’d like to catch,
    The band is playing “Dixie,” a man got his hand outstretched.
    Could be the Fuhrer
    Could be the local priest.
    You know sometimes
    Satan comes as a man of peace.

    He got a sweet gift of gab, he got a harmonious tongue,
    He knows every song of love that ever has been sung.
    Good intentions can be evil,
    Both hands can be full of grease.
    You know that sometimes Satan comes as a man of peace.

    Well, first he’s in the background, then he’s in the front,
    Both eyes are looking like they’re on a rabbit hunt.
    Nobody can see through him,
    No, not even the Chief of Police.
    You know that sometimes Satan comes as a man of peace.

    Well, he catch you when you’re hoping for a glimpse of the sun,
    Catch you when your troubles feel like they weigh a ton.
    He could be standing next to you,
    The person that you’d notice least.
    I hear that sometimes Satan comes as a man of peace.

    Well, he can be fascinating, he can be dull,
    He can ride down Niagara Falls in the barrels of your skull.
    I can smell something cooking,
    I can tell there’s going to be a feast.
    You know that sometimes Satan comes as a man of peace.

    He’s a great humanitarian, he’s a great philanthropist,
    He knows just where to touch you, honey, and how you like to be kissed.
    He’ll put both his arms around you,
    You can feel the tender touch of the beast.
    You know that sometimes Satan comes as a man of peace.

    Well, the howling wolf will howl tonight, the king snake will crawl,
    Trees that’ve stood for a thousand years suddenly will fall.
    Wanna get married? Do it now,
    Tomorrow all activity will cease.
    You know that sometimes Satan comes as a man of peace.

    Somewhere Mama’s weeping for her blue-eyed boy,
    She’s holding them little white shoes and that little broken toy
    And he’s following a star,
    The same one them three men followed from the East.
    I hear that sometimes Satan comes as a man of peace.

    Infidels is the album of the year – 2009!!!

    1. velobabe

      second your nomination “Infidels” repeat in ’09. don’t forget jokerman lyrics, Freedom just around the corner for you
      But with the truth so far off, what good will it do?

  5. DownSouth

    One of the most fascinating aspects about all this is the interplay of the cultural with the economic. On the one hand is the “sphere of intimacy” or “intimacy of the heart” celebrated by Rousseau and the other romantics, and on the other is what Hannah Arendt called our “objective tangible place in the world.”

    As Taibbi points out, the Tea Baggers are pretty much taking their cues from the cultural arena:

    When it comes down to it, most of them hate the president for all the usual reasons they hate “liberals” — because he uses big words, doesn’t believe in hell and doesn’t flip out at the sight of gay people holding hands. Additionally, of course, he’s black, and wasn’t born in America, and is married to a woman who secretly hates our country.

    These are the kinds of voters whom Obama’s gang of Wall Street advisers is counting on: idiots. People whose votes depend not on whether the party in power delivers them jobs or protects them from economic villains, but on what cultural markers the candidate flashes on TV.

    But Charles M. Blow, writing in a recent column in the NY Times, points out that most blacks are also taking their cues from the cultural arena. Obama has very much turned his back on blacks, both culturally and economically, and yet a recent Gallup poll showed Obama’s approval amongst blacks still above 90 percent. “Blacks are living a tale of two Americas,” Blow explains, “one of the ascension of the first black president with the cultural capital that accrues; the other of a collapsing quality of life and amplified racial tensions, while supporting a president who is loath to even acknowledge their pain, let alone commiserate in it.”

    That this is atavistic, a throwback to another time when the cultural and economic became so inextricably intertwined so as to become inseparable, should be lost on no one. As Lee Atwater observed in a 1981 interview with NY Times columnist Bob Herbert:

    You start out in 1954 by saying, ‘Nigger, nigger, nigger.’ By 1968 you can’t say ‘nigger’—that hurts you. Backfires. So you say stuff like forced busing, states’ rights and all that stuff. You’re getting so abstract now [that] you’re talking about cutting taxes, and all these things you’re talking about are totally economic things and a byproduct of them is [that] blacks get hurt worse than whites.

    This deep wound in America’s body politic just won’t heal. James Baldwin wrote the following in 1962, and here we are in the 21st century, still fighting the same battle that he and Du Bois were fighting in the 20th:

    ”The problem of the twentieth century,” wrote W.E.B. Du Bois around sixty years ago, “is the problem of the color line.” A fearful and delicate problem, which compromises, when it does not corrupt, all the American efforts to build a better world—here, there, or anywhere. It is for this reason that everything white Americans think they believe in must now be reexamined. What one would not like to see again is the consolidation of peoples on the basis of their color. But as long as the West place on color the value that we do, we make it impossible for the great unwashed to consolidate themselves according to any other principle. Color is not a human or a personal reality; it is a political reality. But this is a distinction so extremely hard to make that the West has not been able to make it yet. And at the center of this dreadful storm, this vast confusion, stand the black people of this nation, who must now share the fate of a nation that has never accepted them…

    1. Jason Rines

      Nope, we don’t have any real issues with African Americans, homosexuals whatever. What we had a problem with was actually being told repeatedly we do.

      Now that President B.O. is President, the old arguments have been thrown out the window. That is a good thing in my opinion. Equality for the price of Liberty is not exactly the best of trade offs or what should have been major political focuses in the 2008 elections.

        1. Elephant swims

          Jason Rines link:


          Commenter: The new 21st Century GOP is rising all around the country. Bow Chica Bow Wow!!!!!!!:

          For DownSouth:

          For carcad:

    2. Dave Raithel

      If ever a man deserved death by brain cancer, it is Atwater. Pity he didn’t live long enough to suffer Alzheimer’s disease. A mind is such a terrible thing to waste.

  6. Blurtman

    Yves, you were a little late to the party with your doubts about Obama. The USG is corrupt, it sadly is that simple.

    It is a crime to knowingly misrepresent the risk of financial instruments that you sell. This is simple fraud.

    And yet Hank Paulson roams free. Imagine a country where a criminal becomes the Treasury Secretary.

    Need I point our that Maddoff was the formner head of NASDAQ?

  7. Ricksterherpa

    On the theme of Ed Harrison’s Post and Matt Tabbai’s article, Dean Baker at his “Beat the Press” makes the following comments about Obman/Geithner’s latest proposal on using TARP money to encourage bank lending to small business. The publicized intended beneficiaries are suppose to be small business and the uemployed. However, the direct beneficiaries are the banks.

    “Promoting Silliness on Job Creation to Give Money to Banks

    The Obama administration made easily refutable claims about the economy in a front page Washington Post article that describes a plan to give smaller banks money under more generous conditions. The article presents the claim that smaller banks are not making loans to small businesses because of a lack of capital. If this was true, larger banks, that do have ready access to capital, should be seeing rapid growth in the market share of small business loans (apart from the growth due to mergers).

    There is no evidence that this is actually the case. This would suggest that the limited volume of lending to small businesses is attributable to the lack of good credit risks, rather than the lack of bank capital.

    The other misleading statement in the piece is that small businesses account for most employment. While this is true, there is no evidence that larger businesses, with easier access to capital, are currently expanding relative to small businesses. If the economy’s problems were attributable to the inability of small businesses to obtain capital, then there should be evidence to support this assertion. The article presents none.

    In fact, the most obvious explanation of the economy’s problems is the loss of demand associated with the collapse of the $8 trillion housing bubble. The falloff in investment and consumption spending is totally consistent with what would be predicted from this massive loss of wealth. The administration is apparently unwilling to either press Congress for the stimulus needed to replace this demand or adopt a strategy of pushing down the dollar to improve the trade balance. Instead it is making unsupported arguments about credit markets that imply that we should be giving more taxpayer dollars to bankers.

    –Dean Baker”

    This is similiar to the mortgage relief program, where the ostensible beneficiaries, the homeowners, are actually being burdened with paying more than they would for rent for homes that they have little hope of seeing any equity value, but the banks, either directly with the Government modification subsidy, and indirectly for the fees they charge as servicers (fees charged to both the homeowners and the actual investors who hold MBS on the defaulted mortgages) are making money hand over fist.

    Again, I think like Ed Harrison this is more result of regulatory capture and group think, than actual corruption. And they take it for granted that they will walking into a seven figure salary for part-time work at a bank or hedge fund when they leave government service for their “expertise and counsel.”

    1. Dave Raithel

      “If the economy’s problems were attributable to the inability of small businesses to obtain capital, then there should be evidence to support this assertion. The article presents none.

      In fact, the most obvious explanation of the economy’s problems is the loss of demand associated with the collapse of the $8 trillion housing bubble.”

      Mmmm, Meredith Whitney might have something to say about this? Perhaps not – she and Baker concur that small business’s inability to get capital is evidence of a problem, not the cause of the problem …?

  8. Froggy

    I found the article to be very informative if hyperbolic and conspiratorial. He has a clear talent for finding good sources for his stories and a flair for the dramatic when writing them, but if you are going to write an opinion piece/expose, you ought to try to offer some solutions. He utterly fails in this area and essentially promotes Bernie Sanders-like full socialism as the solution to the problem. Nobody in the business world can possibly abide that.

    His derisive comments regarding the Tea Partiers demonstrates vividly his failure to recognize whose interests were being negatively impacted by the boogeymen he just spend 1000 words excoriating. The tea party movement nearly perfectly crystallizes the bipartisan sentiment in this country against the corruption and looting that is currently destroying the utter fabric of what this nation was founded on. The limo liberals who he loathes and holds responsible for this mess are the same snotty, NY lefties who embrace his caricature of the tea partiers as racist/homophobes/hicks. They are ordinary Americans with a broad range of cultural backgrounds who demand that their country live up to the values that our Founding Fathers enumerated for us.

    1. nowhereman

      “They are ordinary Americans with a broad range of cultural backgrounds who demand that their country live up to the values that our Founding Fathers enumerated for us.”
      I’m going with Froggy on this because it shows that there is hope. Americans need to demand their country back, and no amount of MSM derogatory labeling and misdirection should be allowed to discredit these patriotic principles.

    2. Peripheral Visionary

      Well spoken. The activists on the left call for the people to rise up and challenge government, and when they do just that, those self-same activists go into an apoplectic fit and call the protesters every name they can think of, from “racist” to “homophobic” to “brownshirts”.

      It is amazingly hypocritical, and is an effective exposure of the biases of the left, particularly a deep-seated contempt for the working class. Activists position themselves as advocates for the working man, but when the working man has the audacity to speak up and say what he feels is in his own best interest, he is met with a storm of derision. The picture is of a self-appointed activist class whose interest in working people is limited to the extent to which they can be used to further political means.

      If real change is going to happen in this country, it will have to be with the support of the “tea party” movement and other discontents, not in spite of them. They are not always the most well-spoken or photogenic crowd (whoever coined the term “Brooks Brothers Brigade” has apparently never been to one of these protests; “Wal-Mart Warriors” is more like it), but they have the enthusiasm and willpower to make a difference, and as such should have their energies be directed toward productive ends, not looked down upon with contempt.

      1. DownSouth

        While Taibbi may indeed paint with too broad of a brush, giving an inaccurate caricature of the Tea Partiers, you don’t appear to be above doing the same thing yourself. Many of the Tea Partiers wounds are self-inflicted, and the image of being racist, as well as being a grassroots arm of the GOP, are at least partly deserved.

        While things may not be quite as cut and dry as Taibbi would lead us to believe, they are certainly not as cut and dry as you would lead us to believe either.

        Want evidence? Then take this letter from Tea Party Patriots, Inc. published on the internet:

        The Vice Chairman of OCDB and spokesman for the Tea Party Express, Mark Williams, has described President Obama as an “Indonesian Muslim turned welfare thug,” and the “Racist in Chief“, phrases he defended recently in an interview on CNN. Tea Party Patriots disagrees strongly with President Obama on many issues, but we believe such statements are inappropriate and harmful to the healthy debate our country demands on challenging issues. Furthermore, Williams’ antics play into the hands of mainstream media attempts to paint the Tea Party movement as a racist, radical fringe as opposed to the genuine grassroots movement representing all walks of American life that it truly is.

        This is a much more honest appraisal of the Tea Party movement and some of the internal, as well as image, problems it is facing than the whitewash job you attempt. And, I might also point out, is much more likely to garner sympathy for the movement than your characterization. You’re saying things don’t happen that people can tune into the evening news and see happening with their very own eyes.

        The fact that you’re standing there ready with gold leaf and tar brush doesn’t help matters either. It’s not enough that you whitewash the Tea Partiers, but then you deride “activists on the left” and accuse them of “a deep-seated contempt for the working class.” So almost in the same breath in which you’re tearing down Taibbi’s caricature, you’re building a caricature of your own, every bit as false and misleading as Taibbi’s.

        1. dave

          Does the movement have stupid people or racists? I’m sure. So do the Democratic and Republican parties. What percentage of people that pulled the lever for Obama fall into the naked capitalism crowd? Not many. Most probably didn’t have a clue what Obama’s policies were. Most are probably regular jack offs. Many probably have wacky ideas. Any large movement is going to have plenty of dolts in it, otherwise it wouldn’t be a large movement.

          The big difference though is that while people here talk about how they don’t like Obama’s policies, their action is limited to bitching on the internet. At the end of the day most people on this site will end up voting for Obama in 2012 no matter what he does, so why should he give a damn what you have to say?

          The Tea Party movement is disorganized. Most aren’t policy wonks like us. But they have one thing in common, they know we live in a corporatist state where the government screws citizens for the benefit of insiders. And unlike you people bitching on the internet and hoping Obama will suddenly change his tune, they are actually out in the street demonstrating.

          The only tea party member I actually know is Mish from:

          I’ve participated in his various petitions and call in campaigns. We actually got the TARP voted down once, while most people on the left just went along with anything Obama supported. The Tea Party movement is the only one trying to stop the obvious looting going on in our government.

          Here’s what I think all the hate for “teabaggers” (how immature btw) is about. We are all enraged over the governments response to the crisis. However, the left didn’t mount a movement to force Obama to make the good decisions. The right did. Now the populist movement, which people hoped would originate on the left, instead originated on the right. If you believe that populist backlash will eventually drive policy then your upset that the solutions that will be implemented will be center right ideas rather then center left ideas. Well, tough. Maybe if you had the balls to do more then pull a lever in November then you’d be somewhere.

          1. Dave Raithel

            The ones I saw on the Daily Show Thursday night were eating Pizza at Pizza Hut, and the chairwoman who wanted more praying and singing of patriotic songs was trying to determine if people wanted to keep meeting at Pizza Hut, or meet someplace else ….

            You’ll have to go to the Daily Show site if you don’t believe me, I cannot make this stuff up…

            The ones I’ve read quoted in the local paper here in Columbia, Mo, and once in a while hear on local Hate Radio (though truthfully, I rarely tune right of 91.3 fm) don’t really know whom to blame, they just believe somebody has made their life worse than it used to be, and they think they’ve been doing all the things they were supposed to … Ergo, somebody needs to pay, or be punished, or overturned.

            Except they still want their Social Security and Medicare.

          2. dave

            As I said, in any big group there will be wackos. I’ve seen videos where they go to the beach and find people who say they are voting for Obama. Most couldn’t tell you any of his policies, many thought he believed the exact opposite of what he thought, some where total kooks with crazy ideas. The subset who voted for Obama is much bigger, and if I went looking I would find plenty of embarrassing footage of supporters.

      2. Dave Raithel

        “..but when the working man has the audacity to speak up and say what he feels is in his own best interest, he is met with a storm of derision.”

        Because neither Matt Kibbe nor Glenn Beck nor Pretty Boy Hannity are working men. They are stooges and bagmen. You mean Joe the Plummer? Did you hear him speak at the conservative bloggers convention some months back? I caught it on C-SPAN. He MIGHT actually be a decent guy who doesn’t know what to think, especially since he’s got stooges and bagmen like Kibbe and Beck and Hannity filling his head with garbage…

        Teabagger Consciousness: Two of my favorite YouTube clips re the Stupid Milf From Alaska: The first – What they want her to do; the second – What they want her to do …

        1. Elephant swims

          Umm Mr. Raithel could you attach a content warning next time please, like *under garment destroyer*. That first one induced an involuntary intestinal response, gotta run now.

        2. JasonRines

          I will say one thing. At one time I used to like watching Hannity. I lost all respect when he had Michael Moore on the program and Hannity would only deride the left. That is not useful in reaching a consensus on how we all move forward.

    3. Dave Raithel

      Where’s my slave?

      I’ve pissed on Teabaggers at this place before, so I won’t repeat myself.

      I’ll chew on this instead:” ..promotes Bernie Sanders-like full socialism as the solution to the problem. Nobody in the business world can possibly abide that.”

      Too bad for them. The beef, if you will, that “socialists” have with capitalism is that we take bourgeois economic theory seriously. If you have markets that have negligible barriers to entry and do not generate negative externalities and where people are price takers, etc., we really don’t give a fuck. We can go find another job. But that isn’t reality.

      On the other hand, and this is a point I will repeat, some of us in Flyover Country know exactly how we have benefited from the heavy hand of the state (or is the jackboots on our knecks, I never get it right): Went to a public HS built by the WPA; get my electricity from a COOP started with the REA; water from a non-profit water district; sewer from a non-profit sewer district. College on the GI Bill. Don’t have any complaints about the publicly supported farmer’s market where private producers can sell their produce, either. I like public art – the world is better for Thomas Hart Benton. If I could walk onto a showroom and choose between a Gasguzzler 5000 Humi or a CleanAirWaterFarter 20 as readily as I can choose between cell phones, I wouldn’t care that you wanted the Gasguzzler – because you’d be paying for the garbage you spew.

      All Bernie does is make explicit in legislation what Volcker does in critique: You play with your money, fine, you lose it. You play with money backed by the Fed and Treasury – we get to see what you’re doing, and stop it if we (democratically) don’t like it …

      So now we get to campaign reform ….

      It’s a fucking nightmare…

  9. Douglas Watts

    Taibbi’s prose style is off-putting to some, but is consonant with the publication and audience he writes for. Some people like barn-burning prose, others don’t. For me it’s very easy to set aside the style and look at the facts and analysis as laid out. I like Mr. Harrison’s overview.

    In some ways, Taibbi’s piece is about the science of who you appoint and how you delegate. As a very broad example, you don’t appoint some who is skeptical of climate change to be your point-person for creating policy to address climate change. The circles in which you travel has a great influence on how you assess and judge issues. None of us can be “totally objective.” At this most basic level, the appointment of Geithner et al. was a red flag. It’s just hard to believe that people from Geithner’s realm could suddenly separate themselves from the clothes they have been wearing for so long. It’s possible, but very risky, and now we are seeing the downside.

    1. alex

      “Taibbi’s prose style is off-putting to some, but is consonant with the publication … For me it’s very easy to set aside the style and look at the facts and analysis as laid out.”

      Ditto, though I wish Taibbi wrote in a more staid style, and perhaps for a more “mainstream” publication so that his writing would get more exposure.

  10. Jesse

    My concern, perhaps expectation, is that by this time next year Taibbi’s article will appear to be the ‘voice of reason.’

    There is a winner’s curse, and the winners are going to find it a tough go next year, because they do not know when to quit, or just cannot.

  11. Jesse


    There are indeed two Jamie Rubins associated with the Obama Administration.

    There is the Jamie Rubin who is associated with Hilary Clinton, is a professor, is a former assistant secretary of state,and is married to Christine Amanpour. He is not related to Robert Rubin.

    Then there is Jamie Rubin who had been a private equity manager who worked with Froman, and is the son of Robert Rubin.

    I think Taibbi has his Rubin’s sorted correctly, but it really doesn’t matter all that much to me so I have not checked further.

    The problem is that Jamie Rubin the son of Bob had not been confirmed so bios are thin. The other Jamie Rubin is quite well known and is not a financial person.

    I hope this is correct and it helps.

  12. Seal

    This was hard a difficult for me to fully wrap my mind around but America is NOW under the dictatorship of a financial/Congressional/military complex and WILL NEVER revert back to the supposedly revered and, surprisingly, still thought active, democratic principles of its founding. 0Bama is just the poor boob whose watchword Hope is bringing it all into starker relief.

    The end of the American Empire as we know it is directly in front of us. Guantanamo is a slightly private version of the Roman Coliseum, our SpecOps/CIA cowboys are our gladiators, and we are doing the electronic equivalent of clipping the edges of our coins to pay for our military forays.

    Oh yeah, one more thing – the Potomac is Petreus’s Rubicon.

    1. Vinny G.

      Good observations. I think America is now the Roman Empire in the third century. But it’s fall will happen much, much faster.


  13. Doc Holiday

    Good thoughts on this issue of Obamian decay and the changes which occur as one sells out their comrades. Obama like Bush and all the puppets that have marched before us as presidents have an agendas to cash in at the cashflow trough. I think most voters will welcome the stupidity of Palin and the fresh change of pace which she will offer. Between Bush and Obama, how could things be worse? I never bought into the Obama bullshit and the democratic party is nothing but the same joke that the republican party is. The change America needs is a strong independent party that has zero connection to the political system in place; is that a revolution?

  14. Jim

    American do need to demand their country back. One possible source of inspiration could be the Populist revolt of late 19th century America.

    Unfortunately, populism American style has been shaped to a large degree by Richard Hofstadter’s “The Age of Reform (1955) In this celebrated work populists are portrayed as a generally ill-tempered, nativistic and anti-Semitic expression of popular boobery. Hofstadter used as evidence of American agrarian populism in the U.S. whole slices of Western culture from the English poets (Oliver Goldsmith), to the French physiocrats (Crevecoeur)to the American founding fathers (Pain and even Alexander Hamilton.)

    The only problem with his narrative was that it failed to look at the internal structure of the actual American agrarian movement in late 19th century America. From Hofstadter’s perspective the Agrarian populist revolt seemed to happen as a telepathic burst or romantic yearning.

    This type of analysis is really a view from afar–launched from a perspective located securally outside the social formation that is being characterized.

    The type of analysis also helps to obscure the role of human agency in history. In reality this agrarian movement was unusally well organized within a farflung base of production and marketing cooperatives that eventually extended to over 40 states and connected over 2 million recruits.

    Hofstadter’s narrative simply served to conceal historical causality by concealing that actual historical actors.

    These American populists actually moved from private insurgency (bitching around the kitchen table to one another–which is absolutely necessary and valuable) to popular mobilization. What an accomplishment.

  15. Ina Pickle

    EEEEEK!!! Please do not ever associate me with anything said or done by Sarah Palin. She’s the spokesperson for “anti-elitism” in a way that none of us would even remotely agree with. I think her brand has to do with championing lack of critical thought, and perhaps its replacement with religious fervor. God save us. Irony intended.

    And my original point was crudely stated, for which I apologize. First, several of the most subversive and/or free-thinking people I know went to Dartmouth. So something must be going right there. And my educational pedigree is non-Ivy, but first tier, so I suppose I could be accused of sour grapes. Geez. You made me say “educational pedigree.”

    But what I am really saying is that there is a group of people running things who have everything in common, regardless of which side of the revolving door they find themselves on. Their history is the same, they went to the same schools, were taught by the same professors, led to believe that they were the pinnacle in the same assemblies and by the same experiences as the world cooed appropriately over their resumes. When they encounter their counterparts across the table, with whom they sit on the same boards, same PTAs, same neighborhood groups, etc. etc. etc. and engage in small talk about how rough Professor So-and-so was on freshmen, do we really expect them to keep each other at arms-length? Do we expect regulators to consider these folks the enemy, or the “mouth breathers” they imagine to inhabit the “here there be dragons” part of the US map where the population density drops off to somewhat less than the population of livestock?

    The problem, as I see it, is two-fold. The first issue is that people (regardless of political leanings – right or left) from a specific group of schools is considered and promoted to high position above all others. Are we surprised if their thinking is not dissimilar, despite other indicators? Education and the environment of that formative time shape us profoundly, I don’t think that anyone would disagree with that statement. Second, the environment at the top is very cozy within the professional sphere and outside it in the social and community spheres. It is difficult to think ill of the people that you know and socialize with, who attend your same church and attended your same university. Quite aside from the “revolving door,” this creates an issue, in my mind.

    I am a very firm believer in meritocracy, but I do not agree that is what we have. I think that we operate on a series of proxies that purportedly indicate merit, but in reality, perhaps indicate more belonging to a specific caste. I still fervently hope that raw talent comes to the top: I am not so sure.

    I think if we want different approaches in government, we need to start looking at people with different backgrounds who are not so tied in. Having the great unwashed elect the President should produce a lot more variety than it has in practice: self-selection of those with the chutzpah to give the job a try appears to be powerful, among other things. Indeed, I would be the first to worry that the electoral process in this country produces a perfect negative correlation between those who seek and win office and those who would best serve the public good. Perhaps we need a new group of untouchables.

    No disrespect to any very, very fine institution of higher learning was intended. And yes, it is infinitely worse in the UK. With negative consequences for their society that we probably would agree about.

    1. Vinny G.

      “Please do not ever associate me with anything said or done by Sarah Palin. She’s the spokesperson for “anti-elitism” in a way that none of us would even remotely agree with. I think her brand has to do with championing lack of critical thought, and perhaps its replacement with religious fervor. God save us. Irony intended.”

      Sounds like a female version of George W. Was she a drunk too?..


    2. jake chase

      Sorry to keep hammering the same point, but the elite colleges turn out only two types: those who understand the conventional wisdom is entirely bullshit but understand how deploying it can work for them; those who understand it is entirely bullshit and build their own little air raid shelters as far from Washington and Wall Street as possible.

      Nobody who ever had the intelligence to gain entry to one of these schools believes anything taught there in the social sciences.

      What has happened in the past twelve months is simply the collapse of a mountain of Orwellian Truth called economics, and in particular the branch called monetary policy. What we now face is a National Bankruptcy which will be deferred only so long as the dollar remains a reserve currency. We live at the suffrance of China which of course has its own agenda.

      Meanwhile, the only business strategy which makes sense is day trading between the hours of 10:15 and 1:45. Make sure you go to bed flat. Wish I could offer something more helpful.

  16. Doc Hoiliday

    I had to go back and read that again: “Wall Street loved the Citi bailout and the Geithner nomination so much that the Dow immediately posted its biggest two-day jump since 1987, rising 11.8 percent. Citi shares jumped 58 percent in a single day”

    I lost track as to what is happening lately, but I assume Citi is up at least a few thousand percent at this point and then obviously happy as pigs in shit that they will now have no accountability with derivative manipulation (on a global basis) — again! Does anyone have any doubt to the corruption in the Obama camp at this point?

  17. Vinny G.

    Good article.

    This 0Bama guy is rapidly turning out to be the disappointment of the century… this despite his winning the NoBull Prize after a week in office…


  18. S Brennan

    When I first read “Matt Taibbi, Obama’s Big Sellout” I thought it was referring Matt’s work for the Obama campaign during the primaries.

    Well…I’m glad to see he finally wised up, but honestly it’s a little late…a little checking of who was donating to the Obama campaign could have told you what you needed to know. Perhaps Matt’s a dumb guy who writes well, or perhaps he is SHOCKED…SHOCKED to find Gambling going on!

    Don’t know…and it doesn’t matter, because being right after the fact is a useless talent.

    1. Hugh

      You know you don’t have to be the first to the dance or the best dancer to get a dance. Taibbi fulfills an important function writing in a clever and accessible way for an audience that isn’t following closely the economy and finance. The real question is why haven’t the people at the Financial Times writing articles like Taibbi’s minus the expletives on a regular basis, and since their expertise is higher, considerably before him. The answer is that they probably wrote some, but not nearly enough, and that they didn’t because capture doesn’t happen just with politicians and regulators.

      We should be applauding the fact that Taibbi is writing on these subjects, even if he wasn’t the first to see what was going on. Same with his support for Obama. A lot of people, not me, supported Obama. A lot of them have dropped that support. Everyone makes mistakes, not everyone learns from them. At least, Taibbi shows a capacity to learn.

    2. charcad

      Taibbi was pretty open about the source of his disillusionment. These people stayed in the deep shadows until after Obama was safely elected. I can well imagine his feelings watching them suddenly emerge and stride forward to take command of the economic side of Obama’s administration.

      Even for me it was like watching vampires rise from the grave to again suck the blood of the living.

      1. Dave Raithel

        “Even for me it was like watching vampires rise from the grave to again suck the blood of the living.”

        “And I very gutlessly had not bought any Vimpelcomm puts, although my little listed options technical trading program started screaming “BUY Vimpelcomm PUTS” in early July 1998. It was a Russian cell phone startup. The ADR was already NYSE listed and there were AMEX listed option series. That was easily a 30x by four week trade. I spent several weeks kicking myself up and down Kutuzovsky Prospekt over that one.”

        Because why?

        1. charcad

          Because why?

          Vampires? Because their activities in Russia in the early 1990s fostered an immense wave of retail violence. Knowingly in my view. By “their” I mean the entire neocon/neoliberal complex focused on Rubin, GS, Perle, Cheney et al. They didn’t start it but they definitely poured gasoline on the embers.

          Contract killings became part of normal business practices. The potential for this was present in the immense growth of criminal gangs in the late Soviet period.

          I still don’t know what anyone else could have expected by “privatizing” hundreds of billions of dollars of value into an environment characterized by extreme personal privation and the absence of a functional commercial legal system. Yet this is what Harvard’s best and brightest gladly advised, and on pricey USG contracts to boot.

          In another thread Yves commented on the Jeffrey Tidus hit in L.A. Whether Tidus was hit over New Century or not is unknown. But to me the Rubinesque people and events like that are a package deal.

          I think these events are going to get a lot more common here and for the same reason: a generalized breakdown of the Rule of Law.

          Because why?

          Vimpelcomm options? Because I wrote that little program to watch the underlying stocks for early signs of increasing volume and intraday price volatility.

          And I had long learned to distrust all numbers emanating from “Russia”. This includes the extensions of “Russia” in Brighton Beach and lower Manhattan. I thought about it for several weeks.

          I still wish I’d done the trade though.

          1. DownSouth

            ► “By ‘their’ I mean the entire neocon/neoliberal complex…”

            What you describe happening in Russia: How many times have we in Latin America seen this same movie?

            Greg Grandin gives a blow by blow description of the Chicago Boys in action in Chile:


            And for the same movie, only with a change in country and actors, see Carlos Fuentes’ A New Time for Mexico.

            But it was Argentine president Nestor Kirchner who has proved most clairvoyant. Speaking at the Summit of the Americas in Mar de Plata, Argentina in 2005, he said:

            Not only is neoliberalism a lie, but it is also a deathtrap. It is a trap that at first ensnares and affects the weak, but later, in one form or another, it will also arrive to the powerful.

  19. Vangel

    “As you probably know, I have been quite disappointed with this Administration’s leadership on financial reform.”

    Why would you be upset when Obama has done exactly what has been expected of him? He was always an empty suit who thought that he knew far more than he actually did.

    “While I think they ‘get it,’ it is plain they lack either the courage or conviction to put forward a set of ideas that gets at the heart of what caused this crisis.”

    What evidence do we have that “they ‘get it?'” It seems to me that the Obama administration is full of the same type of clueless individuals as the Bush and Clinton administrations, except that Obaman has more of them.

    “It was clear to many by this time last year that the President may not have been serious about reform when he picked Tim Geithner and Larry Summers as the leaders of his economic team. As smart and qualified as these two are, they are rightfully seen as allied with Wall Street and the anti-regulatory movement.”

    Qualified? They never saw the problem coming and have no clue about real world economics. Like most economists they still take Keynes seriously and are totally clueless. Very intelligent people are very dangerous when their assumptions are wrong or their motivation is suspect.

    1. Hugh

      I always find it odd that so many people have it in for Keynes. I am one of those who takes Keynes seriously, and I am not unintelligent. I have also been a critic of Summers and Geithner and their connections to Obama from the time these first became known, Rubin too. I have to say I have seen nothing of Keynes in what they have done. The bailout of the banks had nothing to do with increasing aggregate demand. An unfocused, pissant $787 billion stimulus full of ineffective tax cuts and stretching over two years in the face of a multi-trillion dollar loss in wealth is a laughable spoof of Keynes. Nor is Bernanke’s QE policy Keynesian, though it too went into the trillions. Again it had nothing to do and no effect on aggregate demand.

      I do think Keynes needs to be rethought in the sense that increasing aggregate demand is insufficient to our needs. We also need a direction attached to it, to where we want to take the country. I also think that we are not going to get out of this until there is substantial debt repudiation as well. The math of our economy makes sense no other way.

      1. Siggy

        I think keynes got it wrong. I think that about the time you are passing out of this world it will be determined that he had it wrong and that his accolites have imposed a great fallacy upon us.

        It’s really pretty simple, you cannot borrow your way to prosperity. Moreover, I think its about time that someone begins to look at the source of the misallocations of resources that flows out of a wanton fractional reserve banking system.

        As to president Obama’s sell out, what did you expect apart from snazzy rhetoric? Selling out never happened. President Obama is a product of the Chicago Democratic Party. It’s not quite Boss Tweed, but awfully close. It’s an environment of clout. While I want President Obama to be successful, I also want him to be a one term President.

        1. Hugh

          I think there is a fundamental misunderstanding about how the nature of a fiat money system and the amount of borrowing that needs to occur. I would point out that borrowing arguments seldom come up when tax cuts for the wealthy, lowering corporate tax rates, massive bailouts for banks, or funding wars are involved. The reason they don’t is partly political and partly economic. For the economic side, it is really how much the government wishes to borrow and how much it wishes to print.

          1. selise

            I think there is a fundamental misunderstanding about how the nature of a fiat money system and the amount of borrowing that needs to occur

            no borrowing needs to occur to fund fed spending.

            borrowing does not fund fed spending. taxes do not fund fed spending. borrowing and taxes are important but not for funding fed spending. marshall and rob came here to NC to explain.

            recommend reading warren mosler, randall wray, and/or bill mitchell.

  20. koshem bos

    I find most of the chronology totally pointless. It really doesn’t matter why Obama sold his soul to Wall Street; it may be important historically but not politically and, after all, Taibbi writes about politics.

    Nominating Geithner, whether by advice of a crocked Froman or not, was nominating a WS guy to run the government finances. Obama knew it and didn’t care; it was fine with him. That is the important issue.

    We all should realize by now that Obama is a center-right, valueless and opportunistic politician, and a not very good one at that (see his handling the Health care debacle). The chronology almost misses that altogether.

    Taibbi’s crusade against Robert Rubin is personal; he may or may not have a point. Rubin has been a private citizen for about 10 years now and issue is personal and not political.

    1. alex

      “I find most of the chronology totally pointless.”

      I disagree, as it show just how much of a bait-and-switch Obama pulled. That’s important politically. And while I agree that “it really doesn’t matter why Obama sold his soul to Wall Street”, I don’t think that’s what Taibbi is getting at, but rather than he did sell it.

      “Rubin has been a private citizen for about 10 years now and issue is personal and not political.”

      The fact that he’s a technically a private citizen doesn’t mean he doesn’t have enormous political influence. And the fact that so many of Obama’s picks are Rubin proteges makes it entirely legitimate to investigate the mentor.

  21. TC

    “At a minimum, the picks of Geithner and Summers were a signal to Wall Street that the Obama Administration would be friendly to their interests. It is sort of like Ronald Reagan going to Philadelphia, Mississippi as a first stop in the 1980 election campaign to let southerners know that he was friendly to their interests….”

    Is it possible that it is Obama’s strategy to be closed to his foes so he could deal with them more effectively and leverage on the foes’s strengths?

  22. Michael

    It’s a good article, read it a couple of days ago. I for one like his writing style as a fresh change from the usual weasel words.

    But even for those who don’t agree with what he says or the way he says it, it seems to be a good starting point for discussion. Which is another reason I think it’s a good article.

    And given that pretty much all of the MSM in every democracy has failed it’s duty to the public, it’s nice to see someone other than `another blogger’ (no offense intended to Yves) attempting to hold the incumbent to account.

  23. J L

    Reagan kicked off his election campaign in Philadelphia, Miss. to let “southerners” know he would support their interests?

    Um, no.

    He began his campaign in Philadelphia, Miss., site of the notorious murder of three civil rights activists, with a speech on “states’ rights”, to let RACISTS know he would support their interests.

    Why in the world would you soft-pedal this? Everyone knew what he did and why; let’s not lie about it just because the man is dead.

  24. Jim in SC

    I don’t agree with Ed’s initial analogy: “It is sort of like Ronald Reagan going to Philadelphia, Mississippi as a first stop in the 1980 election campaign to let southerners know that he was friendly to their interests….” It paints Southerners with a broad brush, and somehow ties issues of state’s rights to racism, though the question of the balance of state and federal power is considered at every turn in the The Federalist Papers and other documents which demonstrate the Founder’s thinking. This irks me in the same way that I am irked when I notice that in so many Hollywood movies the villain has a Southern accent, even if there are no other Southern characters or Southern context.

    1. bobh

      “…It paints Southerners with a broad brush, and somehow ties issues of state’s rights to racism, though the question of the balance of state and federal power is considered at every turn in the The Federalist Papers and other documents which demonstrate the Founder’s thinking…”

      Gee, Jim in SC, maybe the tie is that generations of southern politicians, starting with Madison and Jefferson and carrying through to Strom Thurmond and George Wallace and their present day heirs, used “states’ rights” arguments as code for their right to preserve a system that enslaved human beings and, after an end to slavery was imposed on them by a federal government, that kept former slaves from voting and granted legal immunity to lynch mobs. And white southerners kept voting for them. I guess they were all just anti-federalist political philosophers.

      1. JTFaraday

        Except there is a strong case to be made that Madison joined up with Hamilton to form a federal government–in part– in order to get military protection in the event of slave uprising, as was common in the Carribbean. Madison deployed military against the Daniel Shays et al debtor revolt under the articles of confederation, which powers the articles did not grant, thereby establishing a nice little social contract between northern banking “Federalist” and southern agrarian elites.

        So, you can see some antifederalist claims on local autonomy as a means of keeping yourself free from that sort of collusion. There were plenty of anti-federalists in the northern colonies. Frankly, I’ve never been “antigoverment,” but I can get there.

        The fact that Hofstadter even had a populist movement to belittle is more or less the product of constitutional failure. There should be no reason to have to raise a pitchfork army. Maybe some new civil rights movement is required.

        1. bobh

          Okay, local versus centralized power is a real issue outside of its racist context. But… There was a difference between Madison before 1787, when he and Hamilton were jointly arguing for a strong federal government, and Madison (and his mentor Jefferson) during the Washington and Adams administrations and later, when it was becoming clear that a strong federal government might try to limit the expansion of slavery in newly admitted states and undermine the ability of pro-slavery senators to defend their constituents’ right to own slaves. Both of these slave-owning Virginians became increasingly obsessed by this threat and, since both generally avoided the word “slavery” in their writings and letters, both usually made their arguments in terms of states’ rights. This genteel political correctness has continued to the current day, but it is fair to say that almost everyone on both sides of political and military battles fought before and after 1860 over “states rights” knew which “rights” they were talking about. Yes, there can be other reasons to be wary of centralized power. I would like to see state regulation of banking and insurance preserved as antidotes to current tendencies in our own national government. But southerners who embraced states’ rights in the 1860’s (and in 1948, and in the 1960’s), were not, despite their rhetoric, motivated by political science abstractions, or by tax or commerce issues. They wanted to continue institutionalized, state-sanctioned denial of freedom and civil rights to black people. The slogan of the States Rights Party of 1948 was “Segregation Forever.” Jim in SC objects that Ed “ties states rights to racism.” That tie has been there for a long time.

    2. Edward Harrison Post author

      Jim in SC,

      I think you’re reading a lot more into my comment about Ronald Reagan than is necessary. I said “It is sort of like Ronald Reagan going to Philadelphia, Mississippi as a first stop in the 1980 election campaign to let southerners know that he was friendly to their interests.”

      In doing so, I am making a parallel between Obama’s desire to demonstrate a Wall Street-friendly face as his first act and Ronald Reagan’s desire to present a Southern-friendly face as his first act. Nothing more.

      The obvious point here is that politicians do things that make a statement about where their priorities lie. In Obama’s case his priority after being elected was in mollifying big business and Wall Street which was anxious that he really could be their enemy. He is clearly not.


  25. number2son

    I supported Obama and have always voted Democrat. But I won’t vote for him again. I’ll either vote for a real agent of change (even if the candidate has no chance to win) or just sit it out.

  26. JasonRines

    I don’t speak for anybody, I give a website to anybody interesting with something to say. Your research guy is a moron. I represent evolution because resisting the process is futile and only creates non-sustainable situations.

    My feeling is that evolution is an inclusive process. Quinn gets some good marks for content at times but what he represents is a portion of the global citizen’s viewpoints. If the globe is now having a raging debate about representation or a lack thereof; it is not beneficial to represent any group. I consider myself a social scientist. Getting hung up in too many emotions based on divisional idealogies does not lend itself well to the scientific method. Let the world decide how it wants to evolve, I just build spare technical parts.

    That is a bit of a rude question to ask me Down South you should know better. How about we all decide to drop the screen names so we can engage in meaninful debate about how we all move forward? Hiding shows a lack of courage or too much an abundance of fear. Of course, for the majority most think their screen names protect their privacy. The SAIC has been operational for a long time now.

    1. Elephant swimming

      Did I get a promotion, dam must have missed the memo, pay rise sweet! Honey were going to Disneyland!

      Quinn is the quintessential talk jock, no matter the color of his stripes and you used the term *WE*. Yet now you withdraw[?] such assertions only to modify such to the *I represent evolution* re-branding of your original statement. Um…Creationisam/intelligent design double speak me thinks.

      You assume a defensive position with regards to my links when nary a shot was fired, save the one you imaged, projected. You then move on to question DownSouths civility for requesting clarification, only to spray derisions of his “lack of courage/abundance of fear” lol!

      I only reported on what I saw and with out editorial. My juvenile/sophomoric attempt at humor is a defensive mechanism to distract my ancestors blood thirst at those that would enslave me or anyone else and that is all.

      This moron thinks for him self and enjoys talking with folks with in speaking distance moving forward along an azimuth and that is all.

      You have a good day now and I mean that!

  27. Georgia Girl

    Jake Chase said, “In the sixties, …. we were lucky to get laid five times in four years and pretty much had to commit rape to do that.”

    That mentality is why feminist organizations run full throttle. Men, especially frat men, had no problem getting away with rape in the sixties. The only requirement was to keep it shrouded in secrecy among the brotherhood. Right?

  28. Jim in SC


    I understand that your point was about Obama, and about politicians in general. Point taken. I don’t see how Reagan beginning his campaign in 1980 with a speech in Philadelphia, Miss., however, could be perceived as Southern friendly. I believe that racial attitudes changed dramatically in the South during the Seventies, and by nineteen eighty there wasn’t much of a constituency for segregation. It would be interesting to look at the polling from that period. The Carolinas around Charlotte, where I grew up in the ’70s, had fewer problems with de-segregation and perhaps more liberal attitudes than the deeper South, so perhaps I’m relying too much on my own experience.

    As for bobh’s idea that Madison, Jefferson, et al were racists defending their economic interests whose heirs are Strom Thurmond and George Wallace, I think there are some misconceptions at both beginning and end. I’m trying to think of any figures at the time of the Revolution more opposed to slavery than Madison and Jefferson, but I’m drawing a blank. Virginia prohibited the importation of slaves in 1778, the first community in the world to do so. Jefferson wrote a bill—the Ordinance of 1784, declaring that after 1800 slavery would not exist in the territories won by Virginia from the British between Lake Erie and Florida. It lost by one vote. Had the clause ended up in the final bill, slavery would have been excluded from Kentucky, Tennessee, Alabama, and Mississippi. Jefferson wrote of this in a letter, “The voice of a single individual of the state which was divided, or one of those which were in the negative, would have prevented this abominable crime from spreading itself over the new country. Thus we see the fate of millions unborn hanging on the tongue of one man and Heaven was silent in that awful moment”.

    Virginia stood against allowing twenty more years of slave importation during the Constitutional Convention, but an alliance between South Carolina, Georgia, and New England won out and the slave trade continued for another twenty years. Madison’s comment on this result is as follows: “Twenty years will produce all the mischief that can be apprehended from the ability to import slaves. So long a term will be more dishonorable to the American character than to say nothing about it in the Constitution.”

    Now to the more modern politicians: Strom Thurmond and George Wallace. Thurmond was considered a Progressive during his early years in statewide politics. He put an end to lynching in South Carolina with his insistence as governor that the taxi drivers who had lynched a man accused of murdering a taxi driver be prosecuted. When he was governor and he would visit his mixed race daughter at then all black South Carolina State. She complained to him about his public position on race, and he’d respond, ‘Honey, I’m just one man’. Many people don’t realize that George Wallace started his political career as a Progressive. But he found that this stance lost elections, so he vowed never to be out-segged. The moral is that politicians reflect their constituencies, regardless of their personal beliefs.

    LBJ, like Strom Thurmond, opposed every Civil Rights bill presented to the US Senate in the 1950s. Perhaps if Strom had won the Presidency instead of LBJ, he’d have been the one signing the Civil Rights Act.

    Georgia Girl, I’m with you on the rape comment. If women get treated like the Other, bad things happen.

    1. Edward Harrison Post author


      If you look at the link behind the phrase in question, it says:

      Reagan said, “I believe in states’ rights … I believe we have distorted the balance of our government today by giving powers that were never intended to be given in the Constitution to that federal establishment.” He went on to promise to “restore to states and local governments the power that properly belongs to them”.

      The use of the phrase was seen by many as a tacit appeal to Southern white voters and a continuation of Richard Nixon’s Southern Strategy, while some argued it merely reflected Reagan’s libertarian economic beliefs.

      Stop fixating on race. This has to do with States’ rights, which, while a racially-tinged subject, is not all about race. As I said in the article, Reagan was signalling his desire to put the South in play for the Republican party. The issue of States’ rights was one way to do so.

      The point is the symbolism that Reagan took the South seriously. Perception matters to voters.

  29. Jim in SC


    I agree with you that Reagan’s statements had to do with state’s rights, not with race. I’m still perplexed about Reagan choosing Philadelphia, Miss., for his first address. I suspect there is a backstory to that decision that has not yet been told.

    Please keep your commentary coming. I appreciate all you’ve been writing in recent months and am quite sympatico with your political philosophy as you’ve expressed it on these pages. I apologize for being long winded in defending the Founders.

Comments are closed.