This is Naked Capitalism fundraising week. 722 donors have already invested in our efforts to combat corruption and predatory conduct, particularly in the financial realm. Please join us and participate via our donation page, which shows how to give via check, credit card, debit card, or PayPal. Read about why we’re doing this fundraiser, what we’ve accomplished in the last year, and our third goal, well-deserved bonuses for our guest writers.
By Lambert Strether of Corrente
As readers know, WikiLeaks has released transcripts of the three speeches to Goldman Sachs that Clinton gave in 2013, and for which she was paid the eyewatering sum of $675,000. (The link is to an email dated January 23, 2016, from Cllinton staffer Tony Carrk, Clinton’s research director, which pulls out “noteworthy quotes” from the speeches. The speeches themselves are attachments to that email.)
Readers, I read them. All three of them. What surprises — and when I tell you I had to take a little nap about halfway through, I’m not making it up! — is the utter mediocrity of Clinton’s thought and mode of expression. Perhaps that explains Clinton’s otherwise inexplicable refusal to release them. And perhaps my sang froid is preternatural, but I don’t see a “smoking gun,” unless forking over $675,000 for interminable volumes of shopworn conventional wisdom be, in itself, such a gun. What can Goldman Sachs possibly have thought they were paying for?
WikiLeaks has, however, done voters a favor — in these speeches, and in the DNC and Podesta email releases generally — by giving us a foretaste of what a Clinton administration will be like, once in power, not merely on policy (the “first 100 days”), but on how they will make decisions. I call the speeches a “munitions dump,” because the views she expresses in these speeches are bombs that can be expected to explode as the Clinton administration progresses.
With that, let’s contextualize and comment upon some quotes from the speeches
The Democrats Are the Party of Wall Street
Of course, you knew that, but it’s nice to have the matter confirmed. This material was flagged by Carrk (as none of the following material will have been). It’s enormously prolix, but I decided to cut only a few paragraphs. From Clinton’s second Goldman speech at the AIMS Alternative Investments Symposium:
MR. O’NEILL: Let’s come back to the US. Since 2008, there’s been an awful lot of seismic activity around Wall Street and the big banks and regulators and politicians.
Now, , what would be your advice to the Wall Street community and the big banks as to the way forward with those two important decisions?
SECRETARY CLINTON: Well, I represented all of you for eight years. I had great relations and worked so close together after 9/11 to rebuild downtown, and a lot of respect for the work you do and the people who do it, but I do — I think that when we talk about the regulators and the politicians, the economic consequences of bad decisions back in ’08, you know, were devastating, and they had repercussions throughout the world.
That was one of the reasons that I started traveling in February of ’09, so people could, you know, literally yell at me for the United States and our banking system causing this everywhere. Now, that’s an oversimplification we know, but it was the conventional wisdom [really?!].
And I think that there’s a lot that could have been avoided in terms of both misunderstanding and really politicizing [!] what happened with greater transparency, with greater openness on all sides, you know, what happened, how did it happen, how do we prevent it from happening? .
And I think that everybody was desperately trying to fend off the worst effects institutionally, governmentally, and .
I mean, it’s still happening, as you know. People are looking back and trying to, you know, get compensation for bad mortgages and all the rest of it in some of the agreements that are being reached.
There’s nothing magic about regulations, too much is bad, too little is bad. How do you get to the golden key, how do we figure out what works? And .
And we need banking. I mean, right now,, they’re scared of the other shoe dropping, they’re just plain scared, so credit is not flowing the way it needs to to restart economic growth.
So people are, you know, a little — they’re still uncertain, and they’re uncertain both because they don’t know what might come next in terms of regulations, but they’re also uncertain because of changes in a global economy that we’re only beginning to take hold of.
So first and foremost, more transparency, more openness, you know, trying to figure out, , how we keep this incredible economic engine in this country going. And [finance]
And with political people, again, I would say the same thing, you know, , if you were an elected member of Congress and people in your constituency were losing jobs and shutting businesses and everybody in the press is saying it’s all the fault of Wall Street, you can’t sit idly by and do nothing, but what you do is really important.
And I think the jury is still out on that because it was very difficult to sort of sort through it all.
And, of course, I don’t, you know, [oh, really?] and other problems down the road, so it would be better if we could have had a more open exchange about what we needed to do to fix what had broken and then try to make sure it didn’t happen again, but we will keep working on it.
MR. O’NEILL: By the way, we really did appreciate when you were the senator from New York and your continued involvement in the issues (inaudible) to be courageous in some respects to associated with Wall Street and this environment. Thank you very much.
SECRETARY CLINTON: Well, I don’t feel particularly courageous. I mean, if we’re going to be an effective, efficient economy, we need to have all part of that engine running well, and that includes Wall Street and Main Street.
And there’s a big disconnect and a lot of confusion right now. So , but I am interested in trying to figure out how we come together to chart a better way forward and one that will restore confidence in, you know, small and medium-size businesses and consumers and begin to chip away at the unemployment rate [five years into the recession!].
So it’s something that I, you know, if you’re a realist, you know that people have different roles to play in politics, economics, and this is an important role, but I do think that there has to be an understanding of how what happens here on Wall Street has such broad consequences not just for the domestic but the global economy, so more thought has to be given to the process and transactions and regulations so that we don’t kill or maim what works, but with the brainpower and the financial power that exists here.
“Moving forward.” And not looking back. (It would be nice to know what “continued liability” the banks were worried about; accounting control fraud? Maybe somebody could ask Clinton.) Again, I call your attention to the weird combination of certainty and mediocrity of it; readers, I am sure, can demolish the detail. What this extended quotation does show is that Clinton and Obama are as one with respect to the role of the finance sector. Politico describes Obama’s famous meeting with the bankster CEOs:
Arrayed around a long mahogany table in the White House state dining room last week, the CEOs of the most powerful financial institutions in the world offered several explanations for paying high salaries to their employees — and, by extension, to themselves.
“These are complicated companies,” one CEO said. Offered another: “We’re competing for talent on an international market.”.
But President Barack Obama wasn’t in a mood to hear them out. He stopped the conversation and offered a blunt reminder of the public’s reaction to such explanations. “Be careful how you make those statements, gentlemen. The public isn’t buying that.”.
And he did! He did! Clinton, however, by calling the finance sector the “the nerves, the spinal column” of the country, goes farther than Obama ever did.
So, from the governance perspective, we can expect the FIRE sector to dominate a Clinton administration, and the Clinton administration to service it. The Democrats are the Party of Wall Street. The bomb that could explode there is corrupt dealings with cronies (for which the Wikileaks material provides plenty of leads).
Clinton Advocates a “Night Watchman” State
The next quotes are shorter, I swear! Here’s a quote from Clinton’s third Goldman speech (not flagged by Carrk, no doubt because hearing drivel like this is perfectly normal in HillaryLand):
SECRETARY CLINTON: And I tell you, I see any society like a three-legged stool. You have to have an active free market that gives people the chance to live out their dreams by their own hard work and skills. . And you have to have an active civil society. Because there’s so much about America that is volunteerism and religious faith and family and community activities. So you take one of those legs away, it’s pretty hard to balance it. So you’ve got to get back to getting the right balance.
Apparently, the provision of public services is not within government’s remit! What are Social Security and Medicare? “All the rest of it”? Not only that, who said the free market was the only way to “live out their dreams”? Madison, Franklin, even Hamilton would have something to say about that! Finally, which one of those legs is out of balance? Civil society? Some would advocate less religion in politics rather than more, including many Democrats. The markets? Not at Goldman? Government? Too much militarization, way too little concrete material benefits, so far as I’m concerned, but Clinton doesn’t say, making the “stool” metaphor vacuous.
From a governance perspective, we can expect Clinton’s blind spot on government’s role in provisioning servies to continue. Watch for continued privatization efforts (perhaps aided by Silicon Valley). On any infrastructure projects, watch for “public-private partnerships.” The bomb that could explode there is corrupt dealings with a different set of cronies (even if the FIRE sector does have a finger in every pie).
Clinton’s Views on Health Care Reflect Market Fundamentalism
From Clinton’s second Goldman Speech:
MR. O’NEILL: [O]bviously the Affordable Care Act has been upheld by the supreme court. It’s clearly having limitation problems [I don’t know what that means]. It’s unsettling, people still — the Republicans want to repeal it or defund it. So how do you get to the middle on that clash of absolutes?
SECRETARY CLINTON: Well, this is not the first time that we rolled out a big program with the limitation problems [Clinton apparently does].
I was in the Senate when President Bush asked and signed legislation expanding Medicare benefits, the Medicare Part D drug benefits. And people forget now that it was a very difficult implementation.
As a senator, my staff spent weeks working with people who were trying to sign up, because it was in some sense even harder to manage because the population over 65, not the most computer-literate group, and it was difficult. But, you know, people stuck with it, worked through it.
Now, this is on — it’s on a different scale and it is more complex because it’s trying to create a market. , you have, you know, the government is increasing funding through government programs [sic] to provide people over 65 the drugs they needed.
And there were a few variations that you could play out on it, but it was a much simpler market than what the Affordable Care Act is aiming to set up.
Now, the way I look at this, Tim, is it’s either going to work or it’s not going to work.
First, Clinton’s neoliberalism is so bone deep that she refers to Medicare as a “single market” rather than “single payer”; but then Clinton erases single payer whenever possible. Second, Clinton frames solutions exclusively in terms of markets (and not the direct provision of services by government); Obama does the same on health care in JAMA, simply erasing the possiblity of single payer. Third, rather than advocate a simple, rugged, and proven system like Canadian Medicare (single payer), Clinton prefers to run an experiment (“it’s either going to work or it’s not going to work”) on the health of millions of people (and, I would urge, without their informed consent).
From a governance perspective, assume that if the Democrats propose a “public option,” it will be miserably inadequate. The bomb that could explode here is the ObamaCare death spiral.
The Problems Are “Wicked,” but Clinton Will Be Unable to Cope With Them
Finally, this little passage from the first Clinton Goldman speech caught my eye:
MR. BLANKFEIN: The next area which I think is actually literally closer to home but where American lives have been at risk is the Middle East, I think is one topic. What seems to be the ambivalence or the lack of a clear set of goals — maybe that ambivalence comes from not knowing what outcome we want or who is our friend or what a better world is for the United States and of Syria, and then ultimately on the Iranian side if you think of the Korean bomb as far away and just the Tehran death spot, the Iranians are more calculated in a hotter area with — where does that go? And I tell you, I couldn’t — I couldn’t myself tell — you know how we would like things to work out, but it’s not discernable to me what the policy of the United States is towards an outcome either in Syria or where we get to in Iran.
MS. CLINTON: Well, part of it is it’s a , and it’s a that is very hard to unpack in part because as you just said, Lloyd, it’s not clear what the outcome is going to be and how we could influence either that outcome or a different outcome.
(I say “cope with” rather than “solve” for reasons that will become apparent.) Yes, Syria’s bad, as vividly shown by Blankfein’s fumbling question, but I want to focus on the term “wicked problem,” which comes from the the field of strategic planning, though it’s also infiltrated information technology and management theory. The concept originated in a famous paper by Horst W. J. Rittel and Melvin M. Webber entitled: “Dilemmas in a General Theory of Planning” (PDF), Policy Sciences 4 (1973), 155-169. I couldn’t summarize the literature even if I had the time, but here is Rittel and Webber’s introduction:
There are at least ten distinguishing properties of planning-type problems, i.e. wicked ones, that planners had better be alert to and which we shall comment upon in turn. As you will see, we are calling them “wicked” not because these properties are themselves ethically deplorable. We use the term “wicked” in a meaning akin to that of “malignant” (in contrast to “benign”) or “vicious” (like a circle) or “tricky” (like a leprechaun) or “aggressive” (like a lion, in contrast to the docility of a lamb). We do not mean to personify these properties of social systems by implying malicious intent. But then, you may agree that it becomes morally objectionable for the planner to treat a wicked problem as though it were a tame one, or to tame a wicked problem prematurely, or to refuse to recognize the inherent wickedness of social problems.
And here is a list of Rittel and Webber’s ten properties of a “wicked problem” (and a critique):
- There is no definite formulation of a wicked problem
- Wicked problems have no stopping rule
- Solutions to wicked problems are not true-or-false, but good-or-bad.
- There is no immediate and no ultimate test of a solution to a wicked problem.
- Every solution to a wicked problem is a “one-shot operation”; because there is no opportunity to learn by trial-and-error, every attempt counts significantly.
- Wicked problems do not have an enumerable (or an exhaustively describable) set of potential solutions, nor is there a well-described set of permissible operations that may be incorporated into the plan.
- Every wicked problem is essentially unique.
- Every wicked problem can be considered to be a symptom of another [wicked] problem.
- The causes of a wicked problem can be explained in numerous ways. The choice of explanation determines the nature of the problem’s resolution.
- [With wicked problems,] the planner has no right to be wrong.
Of course, there’s plenty of controversy about all of this, but if you throw these properties against the Syrian clusterf*ck, I think you’ll see a good fit, and can probably come up with other examples. My particular concern, however, is with property #3:
Solutions to wicked problems are not true-or-false, but good-or-bad
There are conventionalized criteria for objectively deciding whether the offered solution to an equation or whether the proposed structural formula of a chemical compound is correct or false. They can be independently checked by other qualified persons who are familiar with the established criteria; and the answer will be normally unambiguous.
For wicked planning problems, there are no true or false answers. Normally, many parties are equally equipped, interested, and/or entitled to judge the solutions, although none has the power to set formal decision rules to determine correctness. Their judgments are likely to differ widely to accord with their group or personal interests, their special value-sets, and their ideological predilections. Their assessments of proposed solutions are expressed as “good” or “bad” or, more likely, as “better or worse” or “satisfying” or “good enough.”
(Today, we would call these “many parties” “stakeholders.”) My concern is that a Clinton administration, far from compromising — to be fair, Clinton does genuflect toward “compromise” elsewhere — will try to make wicked planning problems more tractable by reducing the number of parties to policy decisions. That is, exactly, what “irredeemables” implies, which is unfortunate, especially when the cast out amount to well over a third of the population. The same tendencies were also visible in the Clinton campaigns approach to Sanders and Sanders supporters, and the general strategy of bringing the Blame Cannons to bear on those who demonstrate insufficient fealty.
From a governance perspective, watch for many more executive orders acceptable to neither right nor left, and plenty of decisions taken in secret. The bomb that could explode here is the legitimacy of a Clinton administration, depending on the parties removed from the policy discussion, and the nature of the decision taken.
I don’t think volatility will decrease on November 8, should Clinton be elected and take office; if anything, it will increase. A ruling party in thrall to finance, intent on treating government functions as opportunities for looting by cronies, blinded by neoliberal ideology and hence incapable of providing truly universal health care, and whose approach to problems of conflict in values is to demonize and exclude the opposition is a recipe for continued crisis.
 Matt Taibbi takes the view that “Speaking to bankers and masters of the corporate universe, she came off as relaxed, self-doubting, reflective, honest, philosophical rather than political, and unafraid to admit she lacked all the answers.” I don’t buy it. It all read like the same old Clinton to me, and I’ve read a lot of Clinton (see, e.g., here, here, here, here, here, and here).
 One is irresistably reminded of Stalin’s “No man, no problem,” although some consider Stalin’s methods to be unsound.