I've said before, that I think Obama's approach to political economy just isn't quite populist enough, or socialist enough, or radical enough--that is, perverse as it may seem, just not humble enough (in the sense of being willing to ask the American people to humble themselves enough to profoundly rethink how we build, how we finance, and how we consume in our economy)--to do justice to the situation we find ourselves in. More often, he seemed, on the contrary, quite content to work the corprorate institutions and financial establishments that be, in the hopes to turning them towards more egalitarian ends. Which is hardly a bad thing, of course: as I've also said many times in connection with health care reform, while I'm frustrated with how Obama and the Democrats have moved their reform proposals along, I'd still like to see them turned into law, because bankruptcies could be prevented and lives saved. But that doesn't stop me from continuing to hope that the populist Obama, the class-conscious Obama, the civic republican Obama, will re-appear.
I'll have to keep waiting, I guess:
President Barack Obama said he doesn’t “begrudge” the $17 million bonus awarded to JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon or the $9 million issued to Goldman Sachs Group Inc. CEO Lloyd Blankfein, noting that some athletes take home more pay.
The president, speaking in an interview, said in response to a question that while $17 million is “an extraordinary amount of money” for Main Street, “there are some baseball players who are making more than that and don’t get to the World Series either, so I’m shocked by that as well.”
“I know both those guys; they are very savvy businessmen,” Obama said in the interview yesterday in the Oval Office with Bloomberg BusinessWeek, which will appear on newsstands Friday. “I, like most of the American people, don’t begrudge people success or wealth. That is part of the free- market system.”
Obama sought to combat perceptions that his administration is anti-business and trumpeted the influence corporate leaders have had on his economic policies.
As Paul Krugman and John Judis both essentially observe, so much for sympathy for the little guy, struggling against corporate power in the marketplace. Or, as Judis summed up, "this interview shows that, in the choice between Main Street and Wall Street, [Obama's] natural inclinations lie more toward one side--and it ain’t Main Street." Depressing. Doesn't Obama know the liberaltarian moment is over? Progressive causes and libertarian/corporate causes don't go hand-in-hand anymore. Oh well; you take what you can get. And at least Ralph Nader is still out there...
What would you have Obama say about those bonuses. Or, rather, what would you have him do?
ReplyDeleteExpress sympathy with those who are critical of these individuals, whose policies of financial speculation and gamesmanship helped bring upon our current crisis, making so much dough, for one. Actually put some force behind those actions which recognize this reality and try to distribute costs (like, for instance, the House plan to raise taxes on high incomes to pay for health care reform) accordingly, for another.
ReplyDeleteBut Obama doesn't seem to think Jamie Dimon did anything to "bring upon our current crisis." He has publicly commended Dimon several times and even considered him for the position of Secretary of the Treasury. If Obama doesn't think Dimon was one of the bad actors, is there something about Dimon that you're aware of that Obama isn't?
ReplyDeleteMr. Anonymous, RAF is a well educated academic who (like most of his colleagues) cannot understand why some people make a ton of money while he and his very intelligent colleagues make nothing when, in fact, they all have better ideas for running things than anyone else.
ReplyDeleteBut that's not how Russell framed his advice to Obama, Aloysius. He didn't urge Obama to criticize the compensation packages simply because they were large, but because these individuals supposedly brought about the current economic crisis.
ReplyDeleteObama doesn't think Dimon did anything wrong. Russell seems to think Dimon does have some specific culpability. I don't recall reading anything in the newspaper about any fraud or irresponsibility on the part of Jamie Dimon. If he's such a bad actor, in Russell's view, that he should be pressured (or compelled) to forfeit some or all of his bonus, I would like to know why.
You are quite right Mr. Anonymous. That is not how RAF framed up his argument. I think an answer to your question is a justifiable request. I don't think you will get one because I believe that his motivations are closer to what I suspect and something he is loathe to admit.
ReplyDeleteIf you're right, Aloysius, and Russell's concern is really just basic egalitarianism, would he also urge Obama to publicly condemn professional athletes, actors, or musicians who are handsomely paid? From an egalitarian perspective, is $16 million in compensation to Jaime Dimon more objectionable than $78 million to Johnny Depp for appearing in a Pirates of the Caribbean sequel?
ReplyDeleteAnonymous, sorry I'm late in responding. I spent the first part of the week in preparation for a student conference in St. Louis, which I'm now attending.
ReplyDeleteIn your response to Aloysius, you said that I urged Obama to criticize Dimon and Blankfein because "these individuals supposedly brought about the current economic crisis"; that I think, and that presumably I think Obama should also think, that "Dimon does have some specific culpability." But I don't see any accusations of specific culpability in my post; perhaps they are there, but if so I don't see them stated so plainly. On the contrary, my post speaks of general orientations: of my wish that Obama would express a message in regards to our political economy that was more populist, or more socialist, or more civic republican, or more radical...as opposed to, as I said, "work[ing with] the corporate institutions and financial establishments that be, in the hopes to turning them towards more egalitarian ends."
Now that's not to say that I don't believe there is culpability here, or that I don't think Obama ought to believe such culpability exists here also. I most certainly do. But my frustration with the interview, a frustration shared by the individuals I linked to, is that his rhetoric generally elides the whole issue of culpability; he treats what I and other egalitarians would label as highly excessive CEO pay as a simple matter of the free market, completely disconnected from the ethos of financial speculation which men like Dimon and Blankfein have clearly benefited from. And I do hold that ethos--an ethos which, to be sure, Timothy Geithner and many others close to Obama, as well as apparently Obama himself, accept as a legitimate product of the free market--to be culpable (along with other global socio-economic transformations since the end of the Cold War, to be sure) for the near-collapse of banking institutions around the world, not to mention many other economic ills.
In other words, my complaints were more general and conceptual than you read them to be, which is why my suggested responses where systemic and rhetorical, rather than pointedly punitive. Hope that clarifies things.
Aloysius, as always, my thanks for your continued readership and your thoughtful critique. Don't go changing!
As to "specific culpability," you urged Obama to "express sympathy with those who are critical of these individuals, whose policies of financial speculation and gamesmanship helped bring upon our current crisis...." You urged Obama to "actually put some force behind those actions...and try to distribute costs...accordingly," suggesting these individuals should have their bonuses heavily taxed.
ReplyDeleteIf you only meant that the individuals are part of organizations that profit (or lose) from risk-taking, then I don't suppose wrongdoing is even the issue.
But the generality of your response really doesn't tell me what you think is wrong with JPMorgan Chase or Goldman Sachs. I don't really know what you mean by the "ethos of financial speculation." If you put away money in a 401(k) or interest-bearing checking account, are you participating in that ethos? If a bank lends you money to buy a home or finance your education, is it participating in that ethos? If a contractor buys land and builds a home on it to sell, is he? "Financial speculation" is universal in our society. Is that all bad, from top to bottom? Or do you have something more specific in mind?
[Y]ou urged Obama to "express sympathy with those who are critical of these individuals, whose policies of financial speculation and gamesmanship helped bring upon our current crisis...."
ReplyDeleteHmmm. I still think you are attributing a greater specificity to my comments than what the plain meaning of the words (or at least what seems to me to be the plain meaning of the words) warrants, but perhaps I'm wrong; the phrase these individuals certainly be taken to be a specific referent to Dimon and Blankfein. So, allowing for that, than what I wrote is an inaccurate expression of my opinion: the target I would like to see Obama join with others in condemning is the category of persons of which Dimon and Blankfein are members of, not necessary those two themselves. I have no particular knowledge of specific actions taken by either man, and I don't suppose Obama does either. My apologies for not being sufficiently careful with my words.
You urged Obama to "actually put some force behind those actions...and try to distribute costs...accordingly," suggesting these individuals should have their bonuses heavily taxed.
Absolutely. Because I believe a large majority of CEO bonuses should be taxed, aggressively. When malcontents of various ideological stripes attack the rich for extravagant pay and bonuses and stock options and all the rest, and talk about appropriating that money to finance various public works and programs, I may think any particular one of their criticisms may be counter-productive or simple-minded, but I basically have no problem with the original sentiment.
I don't really know what you mean by the "ethos of financial speculation"...."Financial speculation" is universal in our society. Is that all bad, from top to bottom? Or do you have something more specific in mind?
Good questions, for which I don't have nearly as good answers. I would like to believe that one could articulate an understand of market behavior that could distinguish certain sort of more conventional risk-taking (financing homes, for example) from other, more arcane ones (for instance, betting of financial derivatives on international currency markets). Such a distinction might have something to do with tying the speculation to specific, material realities and projects (homes as opposed to floating interest rates), or maybe have something to do with distance (Michael Crawford, in his book Shop Class as Soulcraft, talks about "absentee capitalism," and I think that's a useful term). But I have to recognize that perhaps I wrong, and you just can't so distinguish things. If so, that would suggest that my criticisms ultimately need to lead in a distributist direction, looking askance as all forms financial accumulation equally and insisting, instead, on home economies of self-sufficiency. But I also know I'm not quite willing to embrace that, because, for example, I like too much the technology which corporations, which were built-up through financial concentration and risk-taking provide us with.
Sorry for going on so long. As is apparent (and if you read me long enough it always is), I have strong feelings on this point, but the foundation upon which I build arguments in support of those feelings is perhaps ultimately wishy-washy.
Mr. Anonymous RAF calls it wishy washy but I think that I called it more correctly. Is it becoming any more evident that there is a deeper and perhaps baser motivation?
ReplyDeleteI haven't given up hope either. But that's because I'm excepting a mass outpouring of populist rage at some point or another. As near as I can tell, the Fed and the Treasury have combined to create an environment where any bank that wasn't fatally damaged by 2008 can make a profit. Plus, the whole "if you make a profit, you can keep it/if you take too big of a loss, you'll get a bailout" means that the banking system has long since stopped operating by any reasonable standard of merit or profit. It is socialism for the rich.
ReplyDeleteI am a supporter of free markets and was a Republican up until Bush did the bailout. (Technically, I still am, as there is no point in filling out paperwork as an independent.) However, if I am forced to choose between a situation where I have to take my losses but the big players don't on the one hand and whatever it is you’d get after the Obama people and the tea parties fight for control, I’m more than happy to pick the latter. It probably won’t be better in terms of GPD, but it just might provide a plausible structure for the future.
MH,
ReplyDeletethe banking system has long since stopped operating by any reasonable standard of merit or profit
I would date the beginning of this change long before 2008, but you'll get no disagreement from me here.
As for massive outpourings of populist rage--well, we can only hope. The last truly broad outpouring of such was over a century ago; since then, the powers that be have usually been able to give it one kind of partisan spin or another, and co-opt it. For decades, it was the Democrats, but since the 70s, it's been the Republicans. They're trying to do so right now with the tea partiers. If they fail, and if we really do get a broad populist backlash, 2010 could very interesting indeed. However, I'm not confident that the tea partiers, thus far anyway, have shown the sort of intellectual foundation which would enable to stay organized and stay coherent in the face of a Republican establishment determined to absorb and discipline them.
However, I'm not confident that the tea partiers, thus far anyway, have shown the sort of intellectual foundation which would enable to stay organized and stay coherent in the face of a Republican establishment determined to absorb and discipline them.
ReplyDeleteWho knows? I'm certainly not joining the tea party yet. However, I'm fairly certain that the old Republican coalition will never win a national election again. Or, that if it does, it will be far more internally split the Democrats are now and unable to govern.
The tension between social conservatives and economic liberals (by the original usage of the word) was always there. You could slide by that because the key interests of each group didn’t directly conflict with each other. But now the economic-interest side is split between actual small-government conservatives and the big corporate interests side. They spent decades assuming they both wanted more or less the same policies and it is very clear that is gone. I don’t see how you explain the bailout to a small business owner or a professional-whatever in a sector that wasn’t bailed out. The Republicans may be able to persuade those people to vote against some Democrat in 2010, but I don’t think they’ll be able to get those people to support whatever the Republicans as a whole party could pass if they ever get power again.
RAF I think that you have your head stuck in the cloaca that we call academia. The tea party isn't a political party. It isn't socially conservative. It isn't Republican and for sure its not Democrat. The tea partiers are going to throw out a few Republicans and a lot of Democrats. Everyone is going to get the message of fiscal and monetary discipline.
ReplyDeleteI'd be careful making pronouncements about the location of other peoples' heads. Especially if you expect the Republicans to learn fiscal discipline if only a few of them get thrown-out.
ReplyDelete