Thank you, Joan. It's always a pleasure talking with you.
There are a number of ways to do this and I will give you my best thinking on the subject in a minute. But let me back up from that question and comment on why it's important to judge the intentions. We just finished a presidential election featuring the disappointing (to just about everybody) president against an extremist Republican, Mitt Romney. The horror of an extremist Republican and House of Representatives running the country was averted. But that is no reason to be relieved. In my opinion and, based on the best evidence I have reviewed, quite a few Obama votes were really "No" votes on Romney. President Obama ended his first term a failure by any number of measures. The election was a choice between The Money Party light and the hard-core version of those who rule us.
The tell for his second term was his desire to nominate United Nations Ambassador Susan Rice for Secretary of State. She favored the 2003 invasion of Iraq, she pushed the NATO assault and destruction of both Libya and Syria, and, she's a shareholder in the highly toxic tar sands oil project-Keystone XL pipeline effort, a matter that she would have to handle as Secretary of State. More war, death and destruction and conflicts of interest. More outlandish expenditures on the national security state, even though we spend more on defense than the rest of the world combined. Those are the messages of the Rice nomination and the continuation of aggressive policies overseas
Calling Obama's first term a failure is a pretty strong statement. What do you mean exactly? A failure in what way/s?
The president's 2008 campaign had two implied promises. He was going to fix the financial mess created by the unrestrained greed of Wall Street and a total absence of regulation by the federal government. Also, Obama said we would wind down Iraq and adopt a foreign policy based on a respect for other nations. People assumed that the "most liberal" member of the Senate would restrain runaway defense spending and tone down the empire project.
Neither of those implied promises materialized. Early on, Senator Dick Durbin (D-IL) introduced a Senate bill to curb the 100,000 a month foreclosure rate. The bill failed when Obama refused to provide even cursory support. Worse yet, Obama's first big cabinet appointment was Tim Geithner, head of the New York Fed and the failed regulator who helped enable the 2008 crash. Unemployment remained high, the people suffered, and the perpetrators got huge bailouts. Obama stalled on withdrawing troops from Iraq and ordered thousands more into Afghanistan.
This is not what any objective observer would call a triumphal march through the history of a great crisis.
If the president gave up so readily on regulating and curbing excesses in the financial sector, then, why didn't the folks on Wall St. throw themselves behind his run for re-election? Doesn't the fact that they didn't prove that he stood up to them as much as he was able?
They got everything they wanted from President Obama and they wanted more. Romney is a made man in their fake money scams, domestic and foreign. Why not take a shot at getting him elected and creating the Nirvana of crony capitalism?
Obama began his 2012 campaign with a rousing populist speech in Columbus, Ohio. He warned the cheering crowd that the Republicans wanted to give Wall Street and the big banks "even more power to do as they please." After the election, the first major act by the administration's justice department saw DoJ prosecutor Lanny Breuer announce that there would be no criminal charges against HSBC for enabling money laundering by drug cartels. Why? It might cost jobs. The alternative was a couple billion in fines but no arrests, no felony changes, no conspiracy to commit murder (given the drug killings in Mexico and drug-related deaths in the United States). This is pretty much what the administration did in 2010 when Goldman Sachs was facing fraud charges by the SEC. The big banks are not only too big to fail, they are too big to be indicted in a criminal court.
As far as Obama doing "as much as he was able," two quick points. First, the president could have exposed the utter insanity of the $1.4 quadrillion derivatives market, the "financial weapons of mass destruction" (Warren Buffett), that brought us low and keeps us there. Second, he could have appointed an Attorney General with a zeal for investigation and prosecution and instructed the appointee to hire William K. Black in a critical position to see that justice was done.
Okay, back up a minute, please. For those of us who are not as savvy about economics as we should be, talk a little more about the derivatives market. Why is it so bad? It's certainly profitable, making some people a heck of a lot of money. Also, who's to say that even though he hasn't done anything about it yet, that the president doesn't fully intend to, at a later date? And who's Black and what's he got to do with it?
Derivatives make the financial elite a lot of money. They create a huge drag on the economy and suck productive capital out of real investments for the Wall Street casino. The president had four years to do somehing about it. He chose to ignore the problem.
Derivatives are to the economy as carbon dioxide is to the atmosphere. They are financial investment instruments that allow investors to bet on the underlying value (including likelihood of default) of companies and nations, future interest rates, and other factors. Unlike a stock, you do not need to own shares in the company to bet on its viability. Essentially, derivatives are gambling on outcomes, just like a casino in Las Vegas. They were illega l for most of the 20th century (except in agriculture). Congress and President Clinton changed that in 2000 during the lame duck session. They are unregulated and unwatched. The Bank for International Settlements estimates the OTC derivative market as $639 trillion. The world gross economic product is about $65 trillion. JP Morgan, CitiGroup, and Bank of America have $53, $51, and $43 trillion worth of holdings in derivatives. The US gross domestic product is only $14 trillion. This is total insanity. It makes no sense. The risk on these is basis for much of our economic instability. And we don't make any money on it. The 1% of the top 1% are the beneficiaries.
William K. Black was a key investigator in the savings and loan scandal clean-up. He is fully qualified to assess the current scandals and response. He is the voice of reason and truth in the desert of our current troubles.
Those numbers are absolutely mind-boggling, Michael. Is the derivatives market, like HSBC, also "too big to fail"? And if not, wouldn't any kind of regulation have to be implemented very, very gingerly so as not to topple the whole thing and send our economy, and the world's economy along with it, into a tailspin?
I don't have the answer to that question. I do know that there is no serious discussion about the major risks that we face. Climate change - we are rapidly approaching the point of no return on reducing the devastating impact of climate change. There is no debate that man-made causes - fossil fuels - are the source of the problem and there is little debate on the impact of the consequent warming. Hundreds of millions will be displaced from coastal reasons, to start. What have we heard about that? What efforts has the president outlined?
The economy is still anemic, despite claims of a recovery. The real unemployment rate - all those seeking a job who don't have one - is 22% or so. Is anyone telling the truth on that? Is anyone doing anything about it? What does the president have to say? Nothing to speak of.
The list goes on and on. Before we end, I should mention one more concern. The assault on the Constitution begun during the Bush Administration has not been addressed and it has not been reversed. In fact, the president has added his own special touches - including shooting U.S. citizens overseas who happen to be tagged as terrorists Where are the reaffirmations of habeas corpus, due process, etc. that we wanted from the president? Nowhere to be found.
If citizens have a fair description of our problems, they will unite and seek solutions that work. It's time for truth not self-serving politics and time is running out.
Pretty comprehensive list, Michael. And damning. On a more prosaic note, now that Susan Rice has withdrawn her nomination, the latest scuttlebutt is that Sen. John Kerry is her replacement for Secretary of State. What's your take on that? Is this an inspired move or a foolish and unnecessary gamble: removing an experienced senator with seniority and throwing a Democratic seat into question, with Scott Brown waiting in the wings? Isn't there another good choice that leaves the Senate the way it is?
Kerry is better than Rice, without any doubt. And Chuck Hagel at Defense (if that plays out) will be much better than Gates or Panetta at Defense. It's a matter of degree. We need to stop subverting and invading other nations. We must reduce defense spending and promote peaceful and productive exports. If those two can bring Obama out of his narcissistic delusion that he needs to be some sort of global warrier, I'm all for it. Right now, Obama is the problem (and yes, Romney would have been worse).
Scott Brown is one of the most offensive political personalities I've ever seen. His ugliness about Elizabeth Brown's native American heritage during the Massachusetts Senate campaign was beyond the pale. The people of Massachusetts will retire him for good if he runs again.
The old political system stopped working some time ago, maybe decades. The financial elite and their minions are running on fumes. There's no learning curve to stop the violence and save the habitat for human use.
What do you mean "the financial elite and their minions are running on fumes"? They all seem to be doing quite well, thank you, with no sign of loosening their grip.
The financial and power elite, which I call The Money Party, have no solutions for the problems we face. Popular respect fo the system is vanishing quicker than ever. Their greed is making the nation and planet figuratively and quite literally unlivable. Their grip on reality is limited. However, their grip on power will necessarily tighten in response to their fear of huge public dissatisfaction leading to civil unrest and the guilt they bear leading to a fear of being punished for their failures and frauds.
So, where does that leave us, Mike? Do we all move to Canada or prepare ourselves for the end of the world? Seriously, are there other alternatives?
Joan, you're out of luck. It's a global problem. Wherever you go, there we are.
The alternatives include leave the big banks, buy locally, support local, regional and national union ations, and be extremely direct with your various representatives. Raise awareness with your friends and family and demand change from those in charge as quickly as possible. Don't debate climate change deniers. Don't tolerate those who say that we are in a recovery. Focus on the obvious truth about this crisis and demand action from the system.
The general attitude toward those in power is contempt. Just look at the ratings for Congress. Time to convert that to very loud demands on the environment and economy. We don't have much time left for action that might mitigate the disasters coming our way.
Well, Mike, once again, you've pulled no punches. Thanks for talking with me. I can't say it's been fun but it has been eye-opening.
Thank you, Joan. See you on the other side.