I’m not certain what to make of an article at the New York Times this evening, “Senate Liberals Move to Toughen Bill Regulating Wall Street.”
Liberals? That is a word that has almost disappeared from polite conversation. “Liberal” is a term used by those of the conservative persuasion to discredit anyone to the left of them. Yes, I know Paul Krugman branded himself one in his last book, but that sort of proves the point. He’s a East Coast egghead, now Nobel Prize winner who teaches at an elite university, and even worse, writes for that pinko paper, The New York Times. So he fits one of the stereotypes, that of being too smart to be trustworthy.
But in all seriousness, the term “liberal” which like “conservative” was once descriptive and also worn as a badge of honor by adherents, has become badly discredited in the US. For instance, even though the abject failure of George Bush’s presidency took the wind out of the sails of the neocons, the left in the US is so badly cowed that its positions are more or less in line with Eisenhower Republicans, and it bolder element called itself progressive so as not to taint itself with “liberal” baggage.
So what gives with this New York Times piece? Here is the first paragraph:
Liberal Democrats in the Senate, emboldened by a wave of populism, are trying to make financial regulatory legislation far tougher on Wall Street, potentially restricting or breaking up the biggest banks and financial companies.
Yves here. “Populism” has been one of the new ways to discredit those who question the divine right of the banking classes to take as much of the economic pie as they possibly can for themselves. It has the convenient effect of suggesting that those who want to restrain financiers have a bad case of class jealousy, when in fact they might have been awake when the money mavens nearly destroyed the global economy and are therefore eager to prevent a repeat.
So what is this piece saying? Is it besmirching the bona fides of the Senate reformer wanna bes? (these efforts add up to a lot less than the PR would have you believe) Is it a sign that the left has gotten a teeny bit more bolder and has now decided to wrap itself in the heretofore dreaded “L” mantle? The article uses “liberal” ten times and is awfully fond of talking about that dreadful populism (by implication, voters driven by blood lust for their betters):
The liberal amendment that could be hardest to defeat — and is among the most deeply dreaded by Wall Street — also has some of the purest populist appeal: a proposal by Senator Sherrod Brown of Ohio and Senator Ted Kaufman of Delaware to break up the nation’s biggest banks by imposing caps on the deposits they can hold and limits on other liabilities.
Yves here. Boy, these liberals sure are vengeful and hold grudges for a long time:
Some of the liberals view the financial regulatory legislation as a once-in-a-lifetime opportunity to slap handcuffs on big banks that they have long viewed as greedy.
Some may hope that this change is indeed progress, an illustration of Ganhdi’s remark, “First they ignore you, then they ridicule you, then they fight you, then you win.”
But that view assumes these newly emboldened liberals use the wind in their sails to maximum advantage. As much as I’m keenly in favor of reining in the banks, both the headfake reforms initially proposed and the various amendments are slapdash, lacking in a clear understanding of what went wrong and what are the best leverage points (pun intended) to intervene. The FDIC’s proposed securitization reforms are way ahead of anything in current legislation. The public and the solons are only now getting to the nitty gritty of what happened during the crisis, and the proposed reforms don’t address root causes (including pay structures, governance, and liability).
If any bill passes now, the financial services industry wins. There will not be any additional major reforms until we have another big crisis. Rushing the reforms through before meaningful forensics are completed assures change will be superficial and will leave the old architecture largely intact. The banksters will have to endure being called more bad names in public, but that is a small price to pay for having looted the taxpayer on such a massive scale and being allowed to carry on more or less as before.
Update: In a bit of synchronicity, reader John D sent a link to a Raw Story summary of a new Pew Institute poll. The press is out of touch with America, it seems…it may not be liberal enough, if the story from the supposedly left-leaning New York Times above is any indicator. Even Republicans like the concept “progressive”. What is the world coming to? From Raw Story:
The poll, conducted Apr. 21-26 attempted to gauge Americans’ honest responses to various concepts. Strikingly — perhaps due to the recent financial crisis, repeated bank bailouts and ire at Wall Street firms like Goldman Sachs — more Americans have positive views of liberals than they do
“There is a substantial partisan divide in views of the word ‘progressive,'” Pew researchers note. “However, majorities of Democrats (81%), independents (64%) and Republicans (56%) have a positive reaction to ‘progressive.'”…
Capitalism scored highest among white college graduates with family incomes above $75,000. Socialism did best among those between the ages of 18-29 who approve of President Barack Obama and have incomes below $30,000.
“More than twice as many blacks as whites react positively to “socialism” (53% vs. 24%),” Pew’s pollsters note. “Yet there are no racial differences in views of “capitalism” – 50% of African Americans and 53% of whites have a positive reaction.
“Those with a high school education or less are evenly divided over “capitalism” (44% positive vs. 42% negative),” they continue. “Among those with some college experience, 49% react positively to “capitalism” as do 68% of college graduates. Those with a high school education or less are more likely to express a positive view of “socialism” than do those with more education.
“People with family incomes of $75,000 or more are the only income group in which a clear majority (66%) reacts positively to the word ‘capitalism,'” Pew adds. “Views of ‘socialism’ also are much more negative among those in this income category (71% negative) – and those with incomes of $30,000 to
$75,000 (64% negative) – than those with incomes of less than $30,000 (46% negative).”