1. ambrit

    I particularly liked the phrase used by the interviewer in the following piece, “Financial Terrorists.”
    I don’t know if there is a Saint Cassandra, but I think she would have to be our patron saint.

  2. Susan Truxes

    Taibbi was truthful and accuate; Peter Schiff was truthful and prophetic. We have to get our house in order. We gave the Chinese time and they, in turn, gave us time. And now is the time to balance the world. It can probably work beautifully if the fraudsters just get out of the way.

  3. Foppe

    Taibbi says “it will [apparently] have to get a lot worse before something will really be done” (roughly 10′).. However, I think the more important point is that when the crisis happened, there was no narrative available that could explain how and why the greatestest economy in the world could suddenly be failing. (And how it was possible later on that it hadn’t actually been doing that great for years already.) And as a result, any and every ‘explanation’ that could be given was given, while the reporting on the different aspects was also generally entirely context-free, with no overall narrative being on offer to fit the pieces into. And while that narrative is becoming more (widely) available by now, the first moment of crisis is long gone, so that politicians can simply pretend that nothing is happening that can’t be explained away with some hand-waving and mumbling about how “the US is on the road to recovery”.

    1. psychohistorian

      This is of course because there is not a REAL economist that will speak, write, study or otherwise non-externalize American Imperialism.

      It is just not done in polite company.

      1. nonclassical

        But there ARE real historians showing the “American Imperialism” aspect:






  4. Externality

    Taibbi is mistaken that there was no public opposition to TARP. There was massive public opposition, including public protests.

    Senator Sherrod Brown said he had been getting 2,000 e-mail messages and telephone calls a day, roughly 95 percent opposed.

    It was the bankers, politicians, and chattering classes who supported it, complaining of “populist” opposition.

    In 2010, TARP supporters such as Senator Bennett of Utah lost their seats or seemingly one-sided elections over their support of TARP; again it was the elites who complained that that the public was penalizing politicians for making the “responsible” choice.

    1. Yves Smith Post author

      Agreed, this is a peculiar lapse. TARP was voted down the first time. There was a huge gap between public sentiment, which was massively against it (calls to Congresscritters were 99 to 1 against, and then went to 80 to 20 when the banks started telling employees to weigh in) versus the media (which came down loudly in favor of it).

      1. Philip Pilkington

        Here’s a few extracts that a lecturer in journalism who’s a friend of mine gave me recently — they tell a lot about how the media portrayed the crisis here; I’d argue that they’re largely applicable to the US too (Don’t ask me who ‘McCullagh’ is — I have no idea):

        “McCullagh argues that in the early days of the debacle a number of alternative and critical interpretations came into the public domain, apportioning blame for the crisis to a variety of actors and proferring radical criticisms of the economic system and its management.

        This created an opportunity initially for contestation about how the crisis should be interpreted.

        At this stage in the crisis a plethora of explanations for its causes and for its solutions abounded. The notion of a golden circle of developers, bankers and politicians was one that achieved some prominence and that had considerable public resonance. (p. 44)

        In the initial phase of the crisis responsibility was laid at the doors of three groups in particular: developers for their greed, banks for their reckless lending and the government for its failure to regulate the financial sector and for its tax policies that favoured to developer-led growth. (p. 40)

        Because the crisis was ‘accidental’, the powerful had no ready-made answers: ‘the absence of appropriate news-making preparations on the part of the powerful’, Molotch and Lester argue, ‘provides ‘access to some groups who ordinarily lack it’. It gives them the opportunity to offer explanations that might not normally be heard and attempt to shape public understanding. (p. 39)

        Things, however, did not stay that way (p. 44).
        A fight back began slowly and in a range of disparate locations. This ideological retrenchment sought to sponsor and consolidate an alternative explanation for what had gone wrong, an explanation that was more congruent with the interests of the golden circle of bankers, business and government. (p. 44)

        In the long run, ‘the normal process of routine event making…come into play as the social system regains its composure’ (Molotch and Lester). In this process explanations that might threaten power holders are defused and slowly and steadily replaced by explanations that are more congruent with the interests of current power elites. (McCullagh, p. 39)

        Members of the power elite were forced to construct an explanation for the crisis that would repair the damage that the crisis had done to their interests. In the ensuing months, the power elite closed ranks and, operating largely through the media, began to fight back.

        McCullagh identifies ‘critical discourse moments’ during which sponsors intervened in public debate to make their framings of the crisis hegemonic and so shape public interpretations of the crisis. These were significant in shifting the apportionment of blame for the crisis.”

        1. Dean Sayers


          Do you have a source for this? Can you expand on this – such as, what does McCullough argue replaced the alternative narratives?


          1. Philip Pilkington


            “UCC sociologist Ciaran McCullagh has written a key paper titled ‘We Are Where We Are’: Constructing the Crisis published in Ireland of the Illusions: A sociological Chronicle 2007 – 2008, edited by Perry Share and Mary P. Corcoran (IPA 2010)

            Drawing on the work of Harvey Molotch and Marilyn Lester, McCullagh argues that the crisis was sociologically speaking an ‘accidental’ event ie. an event which had not been anticipated – or planned for – by those in powerful and authoritative positions. Indeed, there had been considerable denial about the perilous state of the banks throughout the summer of 2008.”

            Here’s the author’s profile:


            The author argues that the narrative was replaced by the ‘austerity narrative’ that, by and large, sought to convince people that their ‘profligacy’ was to blame for the crisis.

            For more details, here’s the .doc my lecturer friend put together — all the details are in it:


            There’s been some good work done in Ireland about how the media feed into bubble and crisis discourse. Here’s another .doc the same person put together on how the media fed into the bubble while it expanded. Ireland is a great case-study on all this — and it’s also a place where some good work has been done:



          2. Philip Pilkington

            Oh, and I should give some major props to the person who put them together.

            His name is Rob Browne. He’s a Scottish bloke and senior lecturer in Independent Colleges, Dublin. He’s also a working journalist — and ran a good piece in the New Statesman recently. He references some of his own work in the latter piece.

      2. nonclassical

        Not only protests against TARP, but THREATS of “martial law”
        by Bushit administration, against Congressmen if they didn’t vote for TARP…

    2. Philip Pilkington

      I think his point was that the media didn’t allow this anger expression — or, at the very least, if it did, it didn’t hammer the point home quite as much as it could have.

      We saw the same thing in Ireland. People went crazy — in the quiet, Irish way that people in this country ‘go crazy’ — over the bank bailouts. The media was sent off balance for a few months and ran some pretty admirable stuff on the banks (one of the tabloids ran a headline ‘Wanker Bankers’, presumably after the angry YouTube man). This could run because the elites simply had no talking-points to counteract it.

      But then, the elite collected themselves and started pushing the austerity agenda. This allowed them to distract what had actually caused the huge public debt and lead people to — let’s call a spade a spade — blame themselves for living beyond their means.

  5. Keating Willcox

    First, Mike does superb work, and writes superbly. Second, the model we seek is the central bank of India, where M Reddy, the head of the bank limited derivatives and land speculation, and insisted on 20% down for home loans. That alone was sufficient to prevent the bubble that we experienced. Third, no one in the business cares if one bank screws another, it is sharks eating sharks, and the hell with them all. What made the disaster was politicians bailing out companies and banks rather than letting them fail, where the taxpayers become the payers of last resort.

    I disagree with Mike on Afghanistan. The most important part of US foreign policy is counter terrorism, and the war in Afghanistan is certainly part of that.

    1. DownSouth

      Keating Wilcox said: “The most important part of US foreign policy is counter terrorism, and the war in Afghanistan is certainly part of that.”

      Since Noam Chompsky did such a wonderful job of rebutting the sentiment conveyed in your comment in an article that rick linked, I’ll just cite Chomsky:

      The existence of flat earthers does not change the fact that, uncontroversially, the earth is not flat. Similarly, it is uncontroversial that Stalin and Hitler were responsible for horrendous crimes, though loyalists deny it. All of this should, again, be too obvious for comment, and would be, except in an atmosphere of hysteria so extreme that it blocks rational thought.

      Similarly, it is uncontroversial that Bush and associates did commit the “supreme international crime,” the crime of aggression, at least if we take the Nuremberg Tribunal seriously. The crime of aggression was defined clearly enough by Justice Robert Jackson, Chief of Counsel for the United States at Nuremberg, reiterated in an authoritative General Assembly resolution. An “aggressor,” Jackson proposed to the Tribunal in his opening statement, is a state that is the first to commit such actions as “Invasion of its armed forces, with or without a declaration of war, of the territory of another State….” No one, even the most extreme supporter of the aggression, denies that Bush and associates did just that.

      We might also do well to recall Jackson’s eloquent words at Nuremberg on the principle of universality: “If certain acts of violation of treaties are crimes, they are crimes whether the United States does them or whether Germany does them, and we are not prepared to lay down a rule of criminal conduct against others which we would not be willing to have invoked against us.” And elsewhere: “We must never forget that the record on which we judge these defendants is the record on which history will judge us tomorrow. To pass these defendants a poisoned chalice is to put it to our own lips as well.”

      It is also clear that alleged intentions are irrelevant. Japanese fascists apparently did believe that by ravaging China they were laboring to turn it into an “earthly paradise.” We don’t know whether Hitler believed that he was defending Germany from the “wild terror” of the Poles, or was taking over Czechoslovakia to protect its population from ethnic conflict and provide them with the benefits of a superior culture, or was saving the glories of the civilization of the Greeks from barbarians of East and West, as his acolytes claimed (Martin Heidegger). And it’s even conceivable that Bush and company believed that they were protecting the world from destruction by Saddam’s nuclear weapons. All irrelevant, though ardent loyalists on all sides may try to convince themselves otherwise.

      We are left with two choices: either Bush and associates are guilty of the “supreme international crime” including all the evils that follow, crimes that go vastly beyond anything attributed to bin Laden; or else we declare that the Nuremberg proceedings were a farce and that the allies were guilty of judicial murder. Again, that is entirely independent of the question of the guilt of those charged: established by the Nuremberg Tribunal in the case of the Nazi criminals, plausibly surmised from the outset in the case of bin Laden.

      1. Doug Terpstra

        It’s hard to fathom ten years on that one not directly invested in war can still (honestly) believe that our war in Afghanistan, “the graveyard of empires”, which grinds on interminably without any measurable progress…and spreads into Pakistan, Yemen, Libya, etc. is really an effective counter-terrorism strategy.

        US counter-terrorism policy is in fact manifestly counterproductive and counterintuitive, as is the global drug war. Post Cold War, both are continually expanding—as designed, in Orwellian fashion—in order to perpetuate permanent warfare, profiteering, impose Shock Doctrine austerity, and defacto suspension of the US constitution. Far from achieving peace and stability, our decades-long Middle East wars, combined with the great commodity plays by the Criminal Reserve Bank are arguably the proximate cause of serious instability and unrest in the region. It’s as if we’re doing our damndest to initiate Armageddon.

        1. DownSouth

          “In order to perpetuate permanent warfare, profiteering, impose Shock Doctrine austerity, and defacto suspension of the US constitution.”

          It reads like the preamble to the New United States Constitution that the neocons and neoliberals have written to supercede the old Constitution.

          How anyone, at this late date, could miss the fact that the only objective of the “War on Terror” and the “War on Drugs” is the imposition of neoimperialism, with the American people being the last subject race, is beyond me.

          1. Doug Terpstra

            The war on terror is the perfect breeder reactor, creating more fissile fuel than it consumes. This should be obvious now to anyone who’s salary does not depend on her or his not knowing it.

        2. psychohistorian

          You don’t hear the bastards in the background that are bragging about how good war is for job creation.

          We need the draft back again to get the public to pay attention.

    2. DownSouth

      Also, I don’t think the neoliberal revolution in India has been nearly as absolute as it has in the United States and Europe. Its imposition has met with tremendous resistance. For an update on the India situation there’s The Global Financial Crisis, Developing Countries and India, where Jayati Ghosh’s observes:

      Domestic banking [in India] is still generally secure, especially because nationalised banking remains the core of the system, largely thanks to resistance from the Left parties to government attempts to privatise it.

    3. zadoofkaflorida

      The most important part of US foreign policy is to give no bid contracts to the shadow world of military contractors. Foreign policy is totally controlled by the military industrial complex. Think about it…… we are building highways, bridges and schools in Afganistan. Schools are being closed and the properties auctioned here. Governors dont want a federal money mess of a high speed rail project in their state. Americans don’t matter to Lockeed, Boeing, MdDonald Douglas. They use a million dollar drone to blow up
      tin shacks on a hillside in Afganastan. As long as they keep borrowing money from China to keep the game going they win.

      We are the losers.

  6. Paul Tioxon

    The public, certainly not the higher income highly educated, is more than aware that they are getting screwed. I know I can see the UAW saved GM, not for the sake of shareholders or bondholders, but the organized trade union did it for their membership. This monumental point gets no attention because it would point out the over all fallacy in the depressing picture of futility in the face of seeming powerlessness that Taibbi seems to smirk all the way to the world weary gold medal stand. Without muck Matt would have nothing to rake. But onto more important points than his cameo in false consciousness huckerstering.

    The naked power of Wall St is not exactly news to the millions of people who grew up with parents and grand parents from the depression. My father survived Corregidor, but he is not upset with the Japanese, and when he was alive bought plenty of the products. But he absolutely despised the world where as he told me over and over again, be a doctor or a lawyer so you don’t have to be a slave. The word slave was used over and over again, in relation to working 40 or 50 without sleep in the hold of a ship repairing broken down boilers under orders to get it fixed. All of my older relatives and all of the people I know do not worry about fascist takeovers in America, they too lived through the depression and WWII, it’s not the NAZIs or some idea of a bogeyman that got them angry, it was being caught short of money and being in debt. And by that they simply meant having an unpaid utility bill or repair to the roof of the house.

    Unless there is some point to analysis other than to complain that there is corruption, and no agitation to get people into power to prosecute, I am not really sure what the point is. I know there are a lot of divergent people here on NC, maybe if there was some coverage of actual organizations, such as ACORN, and what happen to it, there might be some point. This and other blogs could have widgets installed to call directly or email directly politicians from the site. I notice the INET event had some real fire power in terms of info. And getting this into the hands of people who are already organized, Green Party, Unions etc may not have as a good as an effect as these people already have a fact based analysis and a political strategy.

    So my question, not to bash Matt, it is a depressing picture even if he was not the messenger, but what is a strategy for power to get something to change? How do we get want we want politically starting from NC and moving outward? How can this info be distributed meaningfully to affect politicians locally, regionally etc?

    1. jonboinAR

      I’d like to organize somehow, but I’m too callow, apparantly. No one pays any attention when I call out in a comments section. They just continue with the gloom ‘n doom. I haven’t any idea what to do, anyhow. That’s probably apparant.

    2. DownSouth


      Excellent questions.

      I highly recommend reading Reinhold Niebuhr’s essay “Optimism, Pessimism and Religious Faith.”

      Also germane is All Watched Over by Machines of Loving Grace – video: An exclusive taster of Adam Curtis’s new series about how computers have not liberated us but distorted and simplified our view of the world around us. (This is a preview and interview with Curtis, but Curtis’ program starts airing tomorrow night on BBC.)

      Also germane is what is happening in Spain as we speak, because it appears the Spanish are one step ahead of the Americans, having moved past the discussion stage to the action stage. In complex social systems, the move from speech to action can happen very suddenly, catching the status quo, and perhaps even the participating activists, by surprise. These things are like a storm, seemingly coming out of nowhere.

      A live feed of what is happening at ground zero in the “Spanish Spring” can be found here. The organizers have also put together a video that sets out the philosophy of the movement—-“True Democracy Now”—-which can be seen here. These are the bullet points from the video, and I think you’ll see they are some of the same points that are frequently discussed here on NC:

      • The day has come, we have taken to the streets for a True Democracy Now (as opposed to polyarchy, or what bmeisen below calls the “2-party oligopy”)

      • We are not safe in politicians and bankers hands

      • The day when the citizens have decided to meet and join their voices, and the message took the streets across the whole country

      • And streets celebrated that day as the first of many others which will take to a true change

      • A change depends on you, on me, on all of us

      • The media won’t silence our voices any more because we have seen we are true people, just as the democracy we are demanding

      • There is no excuse, history is looking at us and it is our turn to make a movement

      • Let the world know we are ready. We are ready to change injustice into coherence, change corruption into responsibility, change outrage into action

      • They don’t represent us! They don’t represent us!

      • Today the citizens of this country—-free, conscious and outraged. We have taken to the streets in the whole country from Oviedo to Cadiz, from Vigo to Barcelona, demanding that the politicians and financial leaders to change the course and stop stealing our democracy.

      • The politicians and economic power have perverted the democratic ideal, plundering the welfare state, cutting back the rights of all people, students, workers, unemployed, citizens all

      • Today has been the beginning of something unstoppable: the true democracy of people who consciously choose their path for a fair, free and egalitarian society; for a decent, solid and sustainable future; and above all, for common sense.

      • Still thinking you cannot do anything? Accept your responsibility. Take on the challenge. Be a part of the necessary change for a world which will be as you want it to be

      • Democracy is your choice. Use it.

      • Mass media won’t show you the truth.

      I think all that is absolutely fabulous. We can certainly do better than we have of late. But I also think it has to be taken in light of Niebuhr and Curtis’ critiques. There is no paradise on earth: no coercion-free and non-hierarchical society. That is nothing but a utopian dream—-the same earthly paradise first promised by liberalism, then by Marxism, and most recently by libertarianism. As Curtis puts it, in this earthly promised land “the power doesn’t go away.” “It never does.”

      1. DownSouth


        I’d just add that libertarianism and Marxism are considerably more dangerous doctrines than liberalism, because with them dictatorship is the declared goal. This dictatorship is predicated on the libertarian and Marxist concept of truth, with its emphasis on the explicit, complete, final and authoritarian. With liberalism, even though dictatorship happened, certainly to a far greater degree in the French Revolution than in the American Revolution, it is nevertheless not the stated goal, neither does it embrace the fundamentalist position of truth.

        Marxism and libertarianism are both heavily reliant on the thinking of the German philosopher Johann Gottlieb Fichte (1762-1814). The text to read here is Michael Allen Gillespie’s Nihilism Before Nietzsche and the chapter entitled “Fichte and the Dark Night of the Noumenal I”. Here are some excerpts:

        Nihilism, as we will see, grows out of the notion of the infinite will that Fichte discovers in the thought of Descartes and Kant…


        Hobbes spoke for nearly every empiricist when he argued that Descartes had established his system upon a faulty foundation by positing the I as fundamental… Empiricists such as Hume could thus argue that what seemed to Descartes to be causal connections were only regularities of experience. For empiricism, science can only describe such regularities. Its results are thus not certain or a priori but probable and posteriori…

        In order to establish a true ground for science and to open a space for freedom, morality, and religion in the face of skepticism, Kant believed that a thorough critique of reason was necessary….

        Kant, however, did not believe that Hume’s argument proved that certain knowledge was impossible. It pointed rather to the crucial failure of rationalism to restrain reason to a sphere commensurate with itself, into what Kant called antimonies…

        Science for Kant and his contemporaries consisted in a system of synthetic truths. Everyone, including Hume, recognized the existence of certain analytic truths, that is, truths in which the predicate can be derived from an analysis of the subject. Such truths are a priori, because they do not require recourse to experience. Everyone also recognized the existence of empirical truths, or truths in which the predicate can be known through perception. These are a posteriori truths. Science, however, depends on the possibility of synthetic truths a priori, that is, truths in which the predicate cannot be logically deduced from the subject but which also do not depend upon the testimony of the senses. Hume believed that there were no such truths. Kant attempted to demonstrate that he was wrong…


        Fichte wrote the ‘Science of Knowledge’ as a text for his students after he was appointed professor at Jena in 1794… [I]t had a tremendous impact upon German intellectual life and played a decisive role in setting the course of speculative idealism and German Romanticism as well as exercising an important if less direct influence upon Left Hegelianism and a number of other intellectual movements of the nineteenth century.

        The goal of the work, Fichte tells us in the first introduction, is the propagation of Kant’s great discovery. The work in fact is a one-sided development of Kantianism… Following Jacobi, he insists that Kant’s critical idealism is not the thing-in-itself but the transcendental I…


        The I is radically free and absolute in the most literal sense, that is, it absolves itself from all relationships other than those that it itself establishes…


        Freedom and subjectivity cannot be explained simply in terms of the laws that govern the objective world. The ‘Science of Knowledge’ thus demonstrates that we cannot understand the I and our subjective experience in the same way we understand the objective world.

        This conclusion, in Fichte’s opinion, indicates that the Enlightenment notion of reason is inadequate to grasp the infinite essence of the self…


        He concludes that all determinate reality is the product of the imagination…


        He redefined reason in terms of the imagination as an infinite creative willing that paints finite pictures of its own infinity…

        For Kant, this problem does not arise, because he partitions reason in a way that allows space for both science and morality, for both the finite I and an objective world on one hand and the infinite I and subjective freedom on the other. Fichte, however, believes that he has discovered that Kant’s island of truth is itself only an illusion, that there are no fixed and immutable forms, and that everything is merely the projection of the imagination upon the banks of fog where one image gives way to another. This confusion, of course, was exactly what Kant predicted would engulf those who left the shelter of his island. To find his way through these mists, Fichte is driven to desperate and dangerous measures. Since this wavering and frustration would go on forever, the know of the finite and infinite “must be cut rather than loosened, by an absolute decree of reason, which the philosopher does not pronounce, but merely proclaims: Since there is no way of reconciling the not-I and the I, let there be no not-I at all!”…

        In the thought of Fichte, we witness the turn away from coexistence toward the assertion of freedom as absolute and the consequent demand that objective nature be annihilated. Freedom and freedom alone must rule, a pure will or activity that shapes only itself and abides by no laws, that knows in its heart of hearts that it is the source of all laws, of all logic, and of all ontology. The elimination of the not-I, that is, of the objective world and all objective reason, however, entails the elimination of the empirical I, for the empirical I arises only in conjunction with the not-I. The proclamation that the not-I must be eliminated is thus also the proclamation that the empirical I must become the absolute, that man must become an absolutely unconstrained and thus radically free being, must become, in other words, God…


        For Fichte…the human will can change the world, and moral satisfaction thus comes only from the constant use of one’s freedom to effect such a transformation. The end of this transformation is the completion of freedom, that is, the liberation of the empirical I from all constraints…

        He little suspected the danger, which became all too clear to Nietzsche, that man would shipwreck on this infinite…


        Not all men, however, are capable of freedom, for many remain determined by the not-I in the form of natural desire. Already in the first introduction to the ‘Science of Knowledge’, Fichte argue that there were two types of human beings, those who had raised themselves to the consciousness of freedom and those who had not. Only the former act uniformly according to their moral will. The others must be constrained to act morally. Kant argues that we are morally obligated to treat all men as ends in themselves. Fichte qualifies this position. He believes that we are morally obligated to treat all men as ends in themselves who are indeed ends in themselves, that is, who are free beings, and that we are also obligated to help others become free by liberating them from the tyranny of the not-I. Thus, coercion may be employed to modify the behavior of individuals who are driven by caprice rather than by moral will.

        Morality for Fichte, however, is not politics. Indeed, he widens the gulf that Kant had opened up between them. He adopts Kant’s notion that morality is the realm of freedom, and politics the realm of desire, but rejects Kant’s conclusion that freedom is powerless to change the world. Freedom in fact can transform man and the world to make politics superfluous… [P]olitics itself could play a significant role in helping to bring about such a transformation. Political authority, however, could be legitimately established only as a system of right, and such a system must be based on freedom.


        On the surface, this extensive reliance on coercion seems to undermine Fichte’s goal of universal human emancipation, but from Fichte’s point of view this conclusion is mistaken, for coercion is employed against only the not-I, not the I, against only unfreedom, not freedom. Primarily, this is the coercion of brute nature by technology. Secondarily, it is the use of coercion against nature as it manifests itself as caprice or desire within the individual human being. Our humanity is thereby not constrained, but set free. In Rousseauian fashion we are forced to be free.

        Even if such coercion is compatible with freedom, one might legitimately wonder if Fichte is not overly optimistic about the morality of the leaders who will guide men to freedom. How can we be certain that they themselves will not act capriciously? What is to prevent them from becoming tyrants who will use the enormous, totalistic powers of the state to satisfy their own desires under the pretext of securing human freedom? … Fichte is ultimately convinced that…the ruling class will be a noble cadre of scholars virtuously devoted to the cause of freedom.

        The foundation of Fichte’s political theory is his argument for the rule of scholars. Indeed, this class makes his state possible. The goal of universal human emancipation requires the comprehensive administration of things and total education of human beings. The latter is the key to overcoming the contradiction between absolute freedom and universal coercion. The scholarly class is crucial to this system of education not only because they possess the necessary technical knowledge to bring it about but because they alone have the required moral character to put the general good ahead of their own individual interests. The scholar embodies the goal of universal freedom that he seeks to establish for all human beings. “In the Divine Idea [the scholar] carries in himself the form of the future age which one day must clothe itself with reality… It is the business of the scholar so to interpose in this strife as to reconcile the activity with the purity of the idea”. He sees further into the future and therefore better understands what needs to be done to promote the goal of universal freedom. The moral superiority of this class is a product of their activities. They have a more general perspective because they are not subject to the social division of labor that produces one-sided human beings. They thus constitute what Hegel was later to characterize as a general or universal class.


        Fichte’s political philosophy reflects the moralistic utopianism of the ‘Science of Knowledge.” Fichte recognizes the apparent contradiction of this utopian element with the practical goals of his thought, but he believes that it is ameliorated by the possibility of coming infinitely nearer the ideal… Fichte assumes that nature or the not-I is infinitely malleable by the human will. However, if nature and especially human nature should prove more resistant to change than Fichte believes, then greater coercion and tyranny may be necessary. Moreover, such tyranny can be justified, with torture interpreted as the means to emancipation.

        Grounded in this philosophical tradition, it is thus possible to understand how the Grand Wizards of libertarianism, Friedrich von Hayek and Milton Friedman, could traipse down to Chile in 1975 and throw their unbridled support behind the military coup and murdering dictatorship of Augusto Pinochet. As Greg Grandin explains in The Road from Serfdom:

        Like Friedman, Hayek glimpsed in Pinochet the avatar of true freedom, who would rule as a dictator only for a “transitional period,” only as long as needed to reverse decades of state regulation. “My personal preference,” he told a Chilean interviewer, “leans toward a liberal dictatorship rather than toward a democratic government devoid of liberalism.”

        It is of course likely that Hayek and Friedman, as well as most other libertarians, are completely ignorant of the philosophical tradition in which they operate. They are also probably ignorant that this is the same philosophical tradition that informs Marxism, Bolshevism and Stalinism.

        1. Foppe

          I am sorry, DS, but I really don’t understand what you are trying to imply about Marxism. I have to admit that I’m not very familiar with Marx’s writings on what the state should look like in the perfect society, but it seems to me extremely unlikely that these absolutist or dictatorial readings are correct.
          So 1. could you please clarify what it is you’re currently hinting at, and 2. how certain are you of these interpretations of marx (do they not confound Marx’s work and later Marxist writings?)

          1. DownSouth


            For the plain English version, a good source is Hannah Arendt’s Karl Marx and the tradition of Western political thought:

            Marx’s idea of right government, outlined first as the dictatorship of the proletariat, which was to be followed by a classless and stateless society, had become the official aim…of political movements throughout the world.


            Marx’s self-contradiction is most striking in the few paragraphs that outline the ideal future society and that are frequently dismissed as utopian… In Marx’s future society the state has withered away; there is no longer any distinction between rulers and ruled and rulership no longer exists… Along with the state, violence in all its forms is gone…

            For the long version, there’s Gillespie’s Nihilism Before Nietzsche:

            While Hegel was more successful than Goethe in his attempts to combat nihilism during his lifetime, in the period after his death it was his students and followers who were principally responsible for nihilism becoming a world-historical political force. Hegel attempted to provide a bulwark against nihilism by reconciling freedom and natural necessity. Neither the Left nor the Right Hegelians, however, were interested in maintain the speculative synthesis that was crucial to Hegel’s thought. The Right Hegelians favored a conservative, theological interpretation of his thought that fastened upon the unity of God and the state within the absolute. They originally hoped to see this unity realized in a liberal Germany but, after the failure of the Revolution of 1848, they turned increasingly to Romantic nationalism. The Left Hegelians rejected Hegel’s speculative solution out of hand and turned his dialectical methodology against the existing political order in an attempt to bring about social justice.


            The development of Left Hegelian thought represents a continuing radicalization of [the] notion of human autonomy and omnipotence that fastens upon and ultimately universalizes the Hegelian principle of negativity.

            Left Hegelianism is thus essentially un-Hegelian. In fact it is a concealed reversion to Fichteanism. This Fichteanism, however, was transformed by the historical and political philosophy of Hegel. Hegel had attempted to turn the Fichtean principle of negation back upon itself by reconciling the dialectical antithesis in a higher speculative synthesis. The Left Hegelian rejection of the speculative moment in Hegel’s thought was a return to a notion of unreconciled dialectical development. It was thus a return to Fichte, but a return that took place within a fundamentally Hegelian view of history and politics. For Hegel, history is the dialectical unfolding of human social life. The agents who bring about this change are the world-historical individuals. At the end of history, these individuals are superseded in the rational state by the universal class of civil servants.

            The Left Hegelians argued that this state is imperfectly rational and that the so-called universal class is universal only in name, since each of the individuals has a particular class interest that is at odds with the universal. In their view, a further transformation is thus necessary to bring a class to power that is substantively and not merely formally universal. The agent of such transformation, however, is no longer understood to be a single world-historical individual, but is seen as a world-historical party or class. In the case of Marx, this is the Communist party that will overthrow the capitalist system and establish the rule of the proletariat… The Ficteanism that Hegel had sought to overcome thus ironically becomes the essence of latter-day Helgelianism. It is through this Left Hegelian misappropriation of Hegel’s principle of negation that nihilism becomes a world-historical political program.


            Hegel had argued that the age of world-historical individuals was over because history was at an end. Humanity thus required only a rational civil service to maintain the order that had been established. The Left Hegelians argued, on the contrary, that history had not yet reached its end and would do so only when the truly universal class, in Marx’s case the proletariat, came to predominance.


            Lenin’s Marxism developed within this horizon. At nineteen, he read Marx’s ‘Capital’ and Plekhanov’s ‘Our Differences’ and became a dedicated Marxist. His understanding of Marx, however, was heavily influenced by his reading of Plekhanov. Thus, he accepted the idea of dictatorship of the proletariat in its most dogmatic form.

          2. DownSouth

            Martin Luther King, Jr. provides a similar critique of Marx in “My Pilgrimage to Nonviolence”:

            In short, I read Marx as I read all of the influential historical thinkers-from a dialectical point of view, combining a partial “yes” and a partial “no.” In so far as Marx posited a metaphysical materialism, an ethical relativism, and a strangulating totalitarianism, I responded with an unambiguous “no”; but in so far as he pointed to weaknesses of traditional capitalism, contributed to the growth of a definite self-consciousness in the masses, and challenged the social conscience of the Christian churches, I responded with a definite “yes.”

          3. Anonymous Jones

            I am decidedly not a Marxist (as much as I appreciate the analysis of capital and society that Marx undertook with so much less information than is available today), and more to your point, I am avowedly a fan of MLK.

            Yet, at the same time, it is a poor excuse to imagine that MLK was the only reliable arbiter of Marx. In fact, if there is any place I find MLK wanting, it is here. To read Marx as believing that the ideas of Marx led to totalitarianism is daft (yes, I wholeheartedly believe they do, but to imagine Marx’s delusions about his own utopia led to totalitarianism is to completely and totally misunderstand Marx’s delusions about himself).

          4. Foppe

            1. Arendt is very careful to emphasize the (at times rather large) difference between Marx’s writing and Marxism.
            2. While this is a lot about the question how Left Hegelianism relates to Right Hegelianism, what’s missing is a description of the link between Left Hegelianism, Marx’s writing, and Marxism.
            Again, and using Arendt’s comments in the pages following the quote you give as support, Marxism is a very different beast from Marx’s writing, and the two should not be conflated. Moreover, because Marxism is multi-sourced, it both is not coherent and will likely contain contradictions, both internal and compared to Marx’s own writings. As such, I am not sure why you would want to emphasize the (imo rather uninteresting) ‘fact’ that Marxism is “totalitarian” or absolutist or whatever, as it serves no real purpose other than to make it seem as though you are saying something about Marx — which, imho, is unfortunate, because reading Marx is far more interesting than reading most later Marxists. (See here for a great lecture series by David Harvey, who does just that.)

        2. Ottawan

          Taibbi is provocative. A good writer, at least. He prolly shouldn’t appear on video too often, though. For one, he seems to conflate the world of media with reality. And two, his smirk is awful. Hell, Fox could use this guy to rally people against the bank critics, or at least the Rolling Stone (not that they don’t deserve it!).

          The fact that Fichte somehow appeared on this comment thread is very funny. And appreciated.

    3. Eureka Springs

      We live in systemic criminality. Whatever the answers, the path has to be similar to the Egyptian Youth. Step down Obama, step down Boehner, send both major monied parties the way of the Whigs…. etc.

      We must stop asking/expecting criminals to change their tune. There is no intent to represent the people from any corner of either major monied party.

      Ask yourself, when is the last time we the people gained a liberty… while trying to count the number of assaults on liberty posted by Glenn Greenwald and in NC link posts just this week.

      Stop negotiating with lessor errorists. Revolt!

  7. Patrice

    Jim Lehrer is quoted as saying “I’m in the reporting part of journalism”, so I’ve emailed the Taibbi interview to PBS NewsHour.

    Once Jim gets on the story, it’ll probably be all over the media within 24 to 48 hours, and they should be rounding up banksters and locking them up behind bars within a few days.

    Or should I send a copy of this interview to Ezra Klein as well, just to make sure?

    1. KnotRP

      Even the PBS NewsHour will fumble the story…they’ll get the standard two people with opposing views, and let whatever they say stand, no matter how brain dead one side of the argument is…they never wade into a story with intellect to challenge either
      side, so they end up amplifying both the signal and the noise,
      instead of filtering out the noise…

  8. bmeisen

    Disappointed that also Taibbi isn’t able to account for the 2-party oligopoly.

    The 2-party oligopoly arises from the dominance of single member district pluralities in the vast majority of federal level elections in the United States. One man/one vote and the guy who gets the most votes the first time around wins is a recipe for disaster. This in combination with phantom status for parties, i.e. they have no explicit constitutional role, produces the Dem/GOP waltz.

    An important story that got buried under the Royal Wedding tripe was the failure of the Alternative List campaign in the UK. In an attempt to dismantle the 2-party oligopoly in the UK the Liberal Dems successfully brought the issue to national referendum – and failed miserably. As they stopped short of seeking genuine proportionality I am not deeply disappointed. But their abject failure is a warning to those of us who hope to see genuine democracy in the US: transforming an entrenched electoral system at the polls is a difficult task.

  9. Richard Fuld, Jr

    But I didn’t know that Lehman was a giant Ponzi scheme, and was unaware we were hiding billions in bad debt and leverage off balance sheet?

    I was also unaware that Lehman was technically insolvent for a number years before it finally collapsed.

    And so?

    So I missed a few things, big deal. There was never any *intent* to mislead or deceive or defraud anyone.

    All right, so I walked away with $541 million, while many shareholders and employees lost everything. Where’s the crime? People like money.

    This has enabled my wife to collect works by a number of prominent artists, including Jasper Johns, Brice Marden, Cy Twombly, Sigmar Polke, Ed Ruscha, Bruce Nauman, Ellsworth Kelly and Roni Horn.

    And if you pay attention, you will notice that a number of MOMA exhibits are made possible by Kathleen and Richard S. Fuld, Jr.

    1. A Good Bankster

      Hah! You call that an art collection. You forgot to mention that those “works” are almost all drawings because you and your wife are too cheap to buy paintings.

      I paid $103.2 million for Warhol’s “Eight Elvises”, in a private sale via Philippe Ségalot.

      And that’s just one painting. You should see the rest of my art collection, all paid for courtesy of the Bailout and the US taxpayer.

      Sure beats the hell out of working!

  10. Gwendolyn H. Barry

    Anchored in Gonzo journalistic traditions, Matt gives it his all. His quickness and ability to sift through the massive misdirection of the banks, mortgage companies, the White House and Wall St. “revolving door of interests” says it all. The current White House is a corporate zygote. It seems that people are not ready to hear how far the “uni-party” has gone to take away their rights so they will not pursue legal remedies against these criminal politico banker festooned national leadership. Corporate Earth is evil and must be destroyed. *hoping for a smile, it’s about all we got right now*

  11. Dean Sayers

    There’s not so much we can do.

    If you want another New Deal, then you have to appeal to the rich – policies will have to expand fiduciary media in the context of a sufficiency centralized system. This is what happened in FDR’s ascension. Expanded social programs coupled with trade liberalization on an international scale were the direct result of lobbying efforts (and sensitivity to labor unrest) by highly productive firms. These firms had a low labor:capital ratio so labor compensation was a relatively small cost – expanding it to increase demand and reduce the likelihood of another general strike was worth it.

    By and large, (JP) Morgan was a major backer of Hoover and retractionary policies (such as debt forgiveness to Europe, which would reduce fiduciary media) were major aspects of his presidency. Chase, as well as other firms, were being crowded out by the monopolization of commercial and financial banking by Morgan, so they – along with other banks – supported these other poilicies, including glass-steagall.

    Today, net assets held by millionaires has increased (since 2007) but the net number of millionaires have decreased. This could possibly usher in a monopolization in the form of another money trust (if it hasn’t already) and then lead to another critical alignment like the new deal.

    But I think these are different times. Banks are simply not afraid of the American people.

    Don’t have time for proper sourcing, but the sources of most data are Tom Ferguson’s “Golden Rule” and BusinessInsider blog.

  12. serenadorris

    Mortgage rates are historically low you can easily refinance these days your mortgage to 3%. It is the best way to save money. Search online for “Mortgage Refinance 123” they did 3.54% refinance and free analysis of my current mortgage. Learnt the refi secrets there.

  13. spanish

    I am from Spain.

    What Taibbi is saying agrees perfectly to what the people was demanding in this regional elections (22 May 2011) in Spain.
    (for instance, #spanishrevolution in twitter….in my opinion a too big word for what happended. But it can be the begining of a bigger and organized reaction).

    The young people (and not so young) has now realized that what seems democracy is in fact party-cracy.(RED party, BLUE party are the same thing).

    Thus once more SP politics-realityshow sponsored by Banks, Energy Companies,( and because in Spain the law does not allow some types of financial schemes of the parties from private companies), the corruption methods to get money for the party once the party gets the power.

  14. Eaglemount

    It’s all well and good to comment about an issue that needs the attention of citizens. It’s even more important to ACTUALLY DO something significant that will allow necessary changes to be made to improve our country.

    Nothing of significance to *Real Change* will happen without effective grassroots effort.

    Here is a link that will interest many of you.

  15. ECP

    Financial Literacy: “The Crisis”
    Wall St. owns the Gov’t so that explains why there are no consequences for it. Pirates are Pirates are Pirates. Politicians are Pirates and paid by Wall St. Pirates to protect their “interests”.
    Politicians know exactly what is happenings to “middle” america, but as long as they get theirs . . .things go along. Voters can’t change the way wall street owns politicians. Media Company talking heads go along because they too are owned by Wall Street.
    Ordinary people now the score and don’t bother voting because they know their vote won’t change the intrinsic way the game is rigged.
    Wall Street Corporations chase slave labor around the world. Americans are on their knees now like slave labor at Foxconn. Why won’t Steve Jobs produce his products here? Because he chases slave labor around the world.

  16. Richard Hansen

    Matt nails the naked truth of our politics in this country.
    There is no hope for change and never will be as long as our political prostitutes have to start raising money for
    their next election the day after they are elected.

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