Posts Tagged ‘Party of Washington’

The impending death of Conservative Socialism

October 23, 2008 Leave a comment

Brad DeLong wrote a piece that just begs to be read. In it, he examines the reason why, as he so elegantly states:

The Bush administration, having entered office as social conservatives, leaves office as conservative socialists, proprietors of the most sudden large expansion of the state’s role in the US economy since mobilisation for the second world war.

For Brad, the question is why this happened:

Why did they decide to partially and quasi-nationalise America’s banks – to invest $250bn in preferred stock plus warrants and tell the banks that it wanted them to use the capital to expand their loan base rather than contract it via deleveraging? It is certainly not what Henry Paulson signed up as Treasury secretary to do.

The question for us, however, as election day approaches and the Party of Wall Street plummets to earth, like John McCain’s fighter jet over the rice paddies of Vietnam, Moron in the cockpit (Mission Accomplished!) for an extended stay at the Obama Hilton, we wonder of the fate of his successor.

That tortured metaphor in place, we can proceed.

The rush of the Party of Wall Street into the safe embrace of its chief rival, the Party of Washington – so completely and handsomely expressed in the endorsement of Barack Obama by that lapdog of the House of Bush, Colin Powell, this past Sunday – the conversion of social conservatives to the conservative socialism of the Democratic Party, no doubt, causes you to consider the possibility that this event heralds not simply the collapse of the former, but also the timely demise of the latter.

In this, you are indeed one step ahead of us, knowing, full well, that without Wall Street, Washington can not function in the old way.

Conservative or not, the faint socialism of Washington’s variety – itself the faintest reflection of the no less faint European reflection of 19th Century Socialism – rests on the most vibrant practice of full blooded Wall Street ponzi schemes erected from a stable base of dollar reserves, easy credit, and an ever lengthening social work day.

Until now, the Party of Washington‘s most convincing argument on behalf of its conservative socialism – read: Social-Fascism (Yes, we did use the “F” word, now clap your hands over your eyes!) – consisted almost entirely of its alleged role in protecting the rest of us from the predatory practices of Wall Street.

One of the intellectual apologists for this “function” of Washington is the economist Jared Bernstein, who wrote some time ago:

… we live in a complex world, where markets can provide only partial solutions to the challenges we face. Market failures abound, and government will unquestionably be called upon to repair these failures. For years, we’ve elected politicians who’ve railed against this reality, pretending that they can refund that fifth of the economy that we spend on government –”it’s your money!”– and still provide the services we want and need. To put it mildly, it hasn’t worked. We’re spending the same share as ever, yet we’ve squandered years when we could have been making progress against the challenges of globalization, of environmental degradation, of deteriorating infrastructure, of economic inequality, of costly inefficiencies in health care.

The only problem with this delusion of Mr. Bernstein: precisely at the time the Party of Wall Street has finally and completely conceded its bankruptcy – both ideological and actual – and turned to the Party of Washington for Bolsheviki Salvation, Washington is itself insolvent, and, under the grinding crush of an unprecedented post-War economic downturn.

Washington may not only be unable to help its retainers on Wall Street, but itself as well.

It is clear industry is faltering, state and local government are facing defaults, unemployment is rising, housing mortgage, and consumer debt defaults continue to increase, pension and retirement funds teeter ominously.

In January, the victorious Party of Washington will face this daunting environment, armed only with the treasury’s printing press, a somewhat fearful community of central banks seeking the safest possible investment instruments in a rapidly deflating economic bubble, and an extremely attenuated ideology to repair what are now being called the “excesses of Wall Street,” but really is a watershed moment for humanity.

Good luck, guys!

The world is changing, fast…

September 14, 2008 Leave a comment

“After Argentina was — after a long, drawn out process — denied financial support from the IMF and left with no choice other than default and devaluation, the US Treasury encouraged the IMF to provide a large backstop to both Brazil and Uruguay. That strikes me as the right metaphor for tonight. But rather than worrying about the rest of the world, the US authorities now are worried about the health of the United States’ own financial system.”

Brad Setser

So tell us how you really feel…

September 10, 2008 Leave a comment

“Like scores of evangelists and hypocrites and moralists who spew and praise family values and pretend to be holier than thou and are then regularly caught cheating or cross dressing or found to be perverts these Bush hypocrites who spewed for years the glory of unfettered wild west laissez faire jungle capitalism (and never believed in any sensible and appropriate regulation and supervision of financial markets) allowed the biggest debt bubble ever to fester without any control, have caused the biggest financial crisis since the Great Depression and are now forced to perform the biggest government intervention and nationalizations in the recent history of humanity, all for the benefit of the rich and the well connected. So Comrades Bush and Paulson and Bernanke will rightly pass to the history books as a troika of Bolsheviks who turned the USA into the USSRA. Fanatic zealots of any religion are always pests that cause havoc and destruction with their inflexible fanaticism; but they usually don’t run the biggest economy in the world. But these laissez faire voodoo-economics zealots in charge of the USA have now caused the biggest financial crisis since the Great Depression and the nastiest economic crisis in decades. So let them be shamed in public for their hypocrisy and zealotry that has caused so much financial and economic damage.”

Nouriel Roubini

Less than meets the eye…

August 30, 2008 Leave a comment
Huffington Post
Picture from the Huffington Post

We would note that Senator Obama’s speech accepting the nomination of the the Party of Washington – the Democrats – was of remarkable quality, and justly impressive to the throng of Washington sycophants, would-be inheritors of the machinery of State, and even representatives of the Party of Wall Street – the Republicans.

You too were probably well entertained by the pageantry and stagecraft of the event.

We would simply ask, if you are inclined to be overwhelmed by the emotional power of seeing this triumphant moment of American racial progress, that you download the text of the Senator Obama’s speech and read the substantive parts aloud in the voice, not of the first African American candidate of a major American party, but the less impressive voice of your congressperson, or town selectman.

You will immediately note, as David Broder has observed, far from the promise of, “fundamental systemic change,” this speech was little more than, “a checklist of traditional Democratic programs.”

Two promises, in particular, are of note:

Now is the time to finally meet our moral obligation to provide every child a world-class education, because it will take nothing less to compete in the global economy. Michelle and I are only here tonight because we were given a chance at an education. And I will not settle for an America where some kids don’t have that chance. I’ll invest in early childhood education. I’ll recruit an army of new teachers, and pay them higher salaries and give them more support. And in exchange, I’ll ask for higher standards and more accountability. And we will keep our promise to every young American – if you commit to serving your community or your country, we will make sure you can afford a college education.

Now is the time to finally keep the promise of affordable, accessible health care for every single American. If you have health care, my plan will lower your premiums. If you don’t, you’ll be able to get the same kind of coverage that members of Congress give themselves. And as someone who watched my mother argue with insurance companies while she lay in bed dying of cancer, I will make certain those companies stop discriminating against those who are sick and need care the most.

In these two paragraphs are the heart of the program of the Party of Washington – that children will be educated, and the sick will be provided medical care.

We are reminded of Chris Rock’s joke about black men who brag self-righteously, “I take care of my kids.”

You know the worst thing about niggas? Niggas always want credit for some shit they supposed to do. A nigga will brag about some shit a normal man just does. A nigga will say some shit like, ‘I take care of my kids.’You’re supposed to, you dumb motherfucker! What kind of ignorant shit is that? ‘I ain’t never been to jail!’ What do you want, a cookie?! You’re not supposed to go to jail, you low-expectation-having motherfucker!”

In the same sense we might judge the promises of Senator Obama, that children will be educated and the sick provided medical care, against the common practice of all civilized nations on this planet, to arrive at how little he actually offers in his platform of change.

Educating children and taking care of the sick is what modern civilized nations do, yet Senator Obama delivers this promise to the nation as if he were delivering the Emancipation Proclamation, not merely hoping to preside over its final realization.

How little he offers in the way of change is graphically framed by this small notice:

In the last two months, Bank of China cut its portfolio of the debt 29 percent, or about $3.14 billion, to $7.5 billion as of Monday, the Beijing-based bank said in an earnings report. Holdings of mortgage-backed bonds guaranteed by Fannie and Freddie were cut 22 percent, to $5.17 billion, the bank said.

Asian investors are retreating despite U.S. Treasury Secretary Henry Paulson’s pledge July 13 to provide government support to Fannie and Freddie should their financial conditions deteriorate further. The government-sponsored enterprises, which own or guarantee at least 42 percent of the $12 trillion in U.S. home loans, have posted $14.9 billion in net losses the last four quarters amid rising foreclosures rise and falling home prices.

From this notice we see that the People’s Republic of China has begun the long process of withdrawing its capital from American markets.  Perhaps, six decades ago this notice might not have been of the least importance to the average American. But, now, in the midst of collapsing credit and housing markets, this small withdrawal signals the most deadly of threats to your living standards, and that of your children.

We cannot emphasize this enough: You are on the edge of the most dire economic catastrophe humanity has ever witnessed – and, the leader of the Party of Washington delivers, as a promise, what is the minimal requirement for modern civilized society: that children should be educated and sick provided medical care!

Perhaps, the most significant line is his speech was this:

Tonight, I say to the American people, to Democrats and Republicans and Independents across this great land – enough! This moment – this election – is our chance to keep, in the 21st century, the American promise alive. Because next week, in Minnesota, the same party that brought you two terms of George Bush and Dick Cheney will ask this country for a third. And we are here because we love this country too much to let the next four years look like the last eight. On November 4th, we must stand up and say: “Eight is enough.”

It was with these words, Senator Obama revealed his willingness to ignore of the depth of the problems he and the nation faces. We love this country too much to let the next four years look like the last eight?

No B, not the last eight, the last sixty!

The insignificant report of the Bank of China makes clear that the rest of the human family is gradually becoming nervous about underwriting the American Empire, and this, above everything else this election might involve, signals its end.

The litany of marginal policy proposals at this time, in that place, by that man, before a rapt nation – the largest ever to witness such an event – underscores the complete failure, complete incompetence, complete paralysis and lack of vision of both the Party of Washington and the Party of Wall Street.

Make no mistake, if you will not reach for your own survival against these two parties, and the empire they have spawned and managed these sixty years, the consequence for you and your family is unimaginable.