Citizen G'kar: Musings on Earth

Showing posts with label Politics. Show all posts
Showing posts with label Politics. Show all posts

August 04, 2011

We are on the Cusp of Losing our Democracy; Demonstrate the True Will of the People

Now is the time to come to the aid of your country! Our democracy is being bought by the highest bidder. Only an American Spring can take it back!
With Al Gore and Keith Olbermann calling for the same thing that we are calling for, the time is upon us.
We are recruiting volunteers to help organize a march in Washington and local satellite rallies all across America. Please use the online form below to sign up. We are going to have a conference call for our local volunteers on Saturday at 3pm ET. We'll send you details by email.

We plan to announce the date on Sunday.
CALL TO ACTION: If you do not consent to being governed by corporations or billionaires...If you want to be heard by your government..If you're ready to stand up for America's democracy and your dignity as citizens...Join us. Let's build America's Tahrir Square.
We are calling for is a peaceful and decisive demonstration to restore  democracy in America. We want to see a million Americans turn up for a march in Washington with satellite rallies in every town and city.
As many acknowledge, we are on the cusp of losing our democracy.  As everyday Americans, we just don't feel heard by our government or mainstream media. Representation has broken down.




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February 13, 2010

TED Blog: Jonathan Haidt on how our moral roots skew our reasoning

It doesn't happen often that I am stunned by a new insight. This one dinged me goo. Well worth watching the 20 minute video.

TED Blog:Jonathan Haidt on how our moral roots skew our reasoning

Our Righteous Minds were designed to unite us into teams, divide us against others, & blind us to the truth -Jon Haidt http://bit.ly/9N7TyU




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February 12, 2010

Republican Medicare Cuts

Even without Dubya, the Republicans are still into Doublethink. It is, even when it isn't, no means yes, and "No to Medicare Cuts!" means bigger Medicare cuts.

Republican Medicare Cuts - Paul Krugman Blog - NYTimes.com:

"So, Newt Gingrich and John Goodman say,

Clipped version of Gingrich and Lott.jpg, a fi...Image via Wikipedia

Don’t cut Medicare. The reform bills passed by the House and Senate cut Medicare by approximately $500 billion. This is wrong.


Leave aside the mind-killing irony of Newt Gingrich — New Gingrich! — denouncing Medicare cuts. What are Republicans themselves proposing?

Well, Rep. Paul Ryan’s Roadmap for America’s Future calls for the eventual elimination of Medicare as we know it, replacing it with a system of vouchers that would, eventually, account for a steadily declining share of GDP. But what about the next decade? Mr. Ryan’s release says that it

Strengthens the current program with changes such as income-relating drug benefit premiums to ensure long-term sustainability.


What does that mean? The CBO, helpfully, translates (pdf):

People who are age 65 or older in 2020 and other existing enrollees at that time would continue to be covered by the current program, although some higher income enrollees would pay higher premiums, and some program payments would be reduced.


In other words, Medicare would face cuts. And the CBO’s detailed analysis provides an estimate of those cuts. I’ve taken the table comparing projected spending with baseline as a share of GDP (xls), and scaled it up using the CBO’s projections of GDP. What I get is an estimated cut in Medicare spending over the next decade of about … $650 billion.

So, cutting Medicare by $500 billion is wrong — support Republicans, who want to cut it by $650 billion!"

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August 30, 2009

The Return of the Welfare Queen and Open Class Warfare

Michael Steele invoked class warfare in his fear mongering attempt to turn seniors against the working poor who can't afford health care by claiming the seniors will lose Medicare benefits if health care goes to the uninsured. This guy is as dishonest as anyone in the Republican Party.

Michael Steele
Image by ajagendorf25 via Flickr


The healthcare reform debate took a rather remarkable turn last week when the Washington Post published an Op-Ed piece by Republican National Committee chairman Michael Steele telling retirees that his party would fight any effort to modify the benefits they derived from the government-run Medicare program in order to offer similar benefits to others. The Op-Ed was immediately supplemented by an item on the RNC Web page trumpeting a "Seniors' Health Care Bill of Rights," similarly pledging the GOP to a to-the-death defense of Medicare benefits and procedures, allegedly under dire threat from universal health coverage.Steele's gambit mainly got attention because it was laughably in conflict with nearly a half century of Republican attacks on Medicare, and because he adopted every ludicrous made-up claim about the impact of this or that health reform bill on Medicare. In a disastrous NPR interview later in the week, the GOP chieftain had a predictably difficult time explaining why the GOP wanted to "protect" Medicare because it was so bad a program that it couldn't withstand any "raids."

[..]This should be familiar to any political observer over the age of 30 as a new version of the old "welfare wedge": the emotionally powerful conservative argument that Democrats want to use Big Government to take away the good things of life from people who have earned them and give them to people who haven't.

[..]What's most interesting, and dangerous, about the new "welfare wedge" is that it's not about poor people who don't work for a living. After all, most very poor families often already have health insurance (depending on where they live) via Medicaid, and those who don't work these days generally don't have the option of working. The target of "welfare" shouters seems to be the working poor, or middle-class minority families who are struggling to stay in the middle class.

via The return of the welfare queen | Salon.


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August 18, 2009

7 Ways We Can Fight Back Against the Rising Fascist Threat

AlterNet

First: The teabaggers must not win this one....

Second: Think nationally, fight locally....

Third: Brush up on our nonviolent resistance -- but leave the heavy lifting and rough enforcement to the cops....

Fourth: We need to make absolutely sure that the media get the story right....

Fifth: Support legislators who don't show fear....

Sixth: Shut down the hate talkers....

Finally: Eternal vigilance is the price of liberty....

More here.

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August 14, 2009

Fascist America: Are We There Yet?


emblem of the :en:Ku Klux Klan
Image via Wikipedia


Few people want to believe the direction politics have moved in the US. Perhaps it's the basic good of people that prevents them from easily accepting that some that they know do not serve their interests, in fact seek to take away their civil liberties. The lesson of history is difficult to follow. But we must understand. Fritz Stern pointed out the drift of the Bush administration in 2004. Sara Robinson continues the warning here. She also prescribes what we can do here.

Fascist America: Are We There Yet? | OurFuture.org.
What is fascism?
The word has been bandied about by so many people so wrongly for so long that, as Paxton points out, "Everybody is somebody else's fascist." Given that, I always like to start these conversations by revisiting Paxton's essential definition of the term:

"Fascism is a system of political authority and social order intended to reinforce the unity, energy, and purity of communities in which liberal democracy stands accused of producing division and decline."

Elsewhere, he refines this further as

"a form of political behavior marked by obsessive preoccupation with community decline, humiliation or victimhood and by compensatory cults of unity, energy and purity, in which a mass-based party of committed nationalist militants, working in uneasy but effective collaboration with traditional elites, abandons democratic liberties and pursues with redemptive violence and without ethical or legal restraints goals of internal cleansing and external expansion."

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Jonah Goldberg aside, that's a basic definition most legitimate scholars in the field can agree on, and the one I'll be referring to here.

From proto-fascism to the tipping point
According to Paxton, fascism unfolds in five stages. The first two are pretty solidly behind us -- and the third should be of particular interest to progressives right now.

In the first stage, a rural movement emerges to effect some kind of nationalist renewal (what Roger Griffin calls "palingenesis" -- a phoenix-like rebirth from the ashes). They come together to restore a broken social order, always drawing on themes of unity, order, and purity. Reason is rejected in favor of passionate emotion. The way the organizing story is told varies from country to country; but it's always rooted in the promise of restoring lost national pride by resurrecting the culture's traditional myths and values, and purging society of the toxic influence of the outsiders and intellectuals who are blamed for their current misery.

Fascism only grows in the disturbed soil of a mature democracy in crisis. Paxton suggests that the Ku Klux Klan, which formed in reaction to post-Civil War Reconstruction, may in fact be the first authentically fascist movement in modern times. Almost every major country in Europe sprouted a proto-fascist movement in the wretched years following WWI (when the Klan enjoyed a major resurgence here as well) -- but most of them stalled either at this first stage, or the next one.

As Rick Perlstein documented in his two books on Barry Goldwater and Richard Nixon, modern American conservatism was built on these same themes. From "Morning in America" to the Rapture-ready religious right to the white nationalism promoted by the GOP through various gradients of racist groups, it's easy to trace how American proto-fascism offered redemption from the upheavals of the 1960s by promising to restore the innocence of a traditional, white, Christian, male-dominated America. This vision has been so thoroughly embraced that the entire Republican party now openly defines itself along these lines. At this late stage, it's blatantly racist, sexist, repressed, exclusionary, and permanently addicted to the politics of fear and rage. Worse: it doesn't have a moment's shame about any of it. No apologies, to anyone. These same narrative threads have woven their way through every fascist movement in history.

In the second stage, fascist movements take root, turn into real political parties, and seize their seat at the table of power. Interestingly, in every case Paxton cites, the political base came from the rural, less-educated parts of the country; and almost all of them came to power very specifically by offering themselves as informal goon squads organized to intimidate farmworkers on behalf of the large landowners. The KKK disenfranchised black sharecroppers and set itself up as the enforcement wing of Jim Crow. The Italian Squadristi and the German Brownshirts made their bones breaking up farmers' strikes. And these days, GOP-sanctioned anti-immigrant groups make life hell for Hispanic agricultural workers in the US. As violence against random Hispanics (citizens and otherwise) increases, the right-wing goon squads are getting basic training that, if the pattern holds, they may eventually use to intimidate the rest of us.

Paxton wrote that succeeding at the second stage "depends on certain relatively precise conditions: the weakness of a liberal state, whose inadequacies condemn the nation to disorder, decline, or humiliation; and political deadlock because the Right, the heir to power but unable to continue to wield it alone, refuses to accept a growing Left as a legitimate governing partner." He further noted that Hitler and Mussolini both took power under these same circumstances: "deadlock of constitutional government (produced in part by the polarization that the fascists abetted); conservative leaders who felt threatened by the loss of their capacity to keep the population under control at a moment of massive popular mobilization; an advancing Left; and conservative leaders who refused to work with that Left and who felt unable to continue to govern against the Left without further reinforcement."

And more ominously: "The most important variables...are the conservative elites' willingness to work with the fascists (along with a reciprocal flexibility on the part of the fascist leaders) and the depth of the crisis that induces them to cooperate."

That description sounds eerily like the dire straits our Congressional Republicans find themselves in right now. Though the GOP has been humiliated, rejected, and reduced to rump status by a series of epic national catastrophes mostly of its own making, its leadership can't even imagine governing cooperatively with the newly mobilized and ascendant Democrats. Lacking legitimate routes back to power, their last hope is to invest the hardcore remainder of their base with an undeserved legitimacy, recruit them as shock troops, and overthrow American democracy by force. If they can't win elections or policy fights, they're more than willing to take it to the streets, and seize power by bullying Americans into silence and complicity.

When that unholy alliance is made, the third stage -- the transition to full-fledged government fascism -- begins.

The third stage: being there
All through the Bush years, progressive right-wing watchers refused to call it "fascism" because, though we kept looking, we never saw clear signs of a deliberate, committed institutional partnership forming between America's conservative elites and its emerging homegrown brownshirt horde. We caught tantalizing signs of brief flirtations -- passing political alliances, money passing hands, far-right moonbat talking points flying out of the mouths of "mainstream" conservative leaders. But it was all circumstantial, and fairly transitory. The two sides kept a discreet distance from each other, at least in public. What went on behind closed doors, we could only guess. They certainly didn't act like a married couple.

Now, the guessing game is over. We know beyond doubt that the Teabag movement was created out of whole cloth by astroturf groups like Dick Armey's FreedomWorks and Tim Phillips' Americans for Prosperity, with massive media help from FOX News. We see the Birther fracas -- the kind of urban myth-making that should have never made it out of the pages of the National Enquirer -- being openly ratified by Congressional Republicans. We've seen Armey's own professionally-produced field manual that carefully instructs conservative goon squads in the fine art of disrupting the democratic governing process -- and the film of public officials being terrorized and threatened to the point where some of them required armed escorts to leave the building. We've seen Republican House Minority Leader John Boehner applauding and promoting a video of the disruptions and looking forward to "a long, hot August for Democrats in Congress."

This is the sign we were waiting for -- the one that tells us that yes, kids: we are there now. America's conservative elites have openly thrown in with the country's legions of discontented far right thugs. They have explicitly deputized them and empowered them to act as their enforcement arm on America's streets, sanctioning the physical harassment and intimidation of workers, liberals, and public officials who won't do their political or economic bidding.

This is the catalyzing moment at which honest-to-Hitler fascism begins. It's also our very last chance to stop it.

The fail-safe point
According to Paxton, the forging of this third-stage alliance is the make-or-break moment -- and the worst part of it is that by the time you've arrived at that point, it's probably too late to stop it. From here, it escalates, as minor thuggery turns into beatings, killings, and systematic tagging of certain groups for elimination, all directed by people at the very top of the power structure. After Labor Day, when Democratic senators and representatives go back to Washington, the mobs now being created to harass them will remain to run the same tactics -- escalated and perfected with each new use -- against anyone in town whose color, religion, or politics they don't like. In some places, they're already making notes and taking names.

Where's the danger line? Paxton offers three quick questions that point us straight at it:

1. Are [neo- or protofascisms] becoming rooted as parties that represent major interests and feelings and wield major influence on the political scene?

2. Is the economic or constitutional system in a state of blockage apparently insoluble by existing authorities?

3. Is a rapid political mobilization threatening to escape the control of traditional elites, to the point where they would be tempted to look for tough helpers in order to stay in charge?

By my reckoning, we're three for three. That's too close. Way too close.

The Road Ahead
History tells us that once this alliance catalyzes and makes a successful bid for power, there's no way off this ride. As Dave Neiwert wrote in his recent book, The Eliminationists, "if we can only identify fascism in its mature form—the goose-stepping brownshirts, the full-fledged use of violence and intimidation tactics, the mass rallies—then it will be far too late to stop it." Paxton (who presciently warned that "An authentic popular fascism in the United States would be pious and anti-Black") agrees that if a corporate/brownshirt alliance gets a toehold -- as ours is now scrambling to do -- it can very quickly rise to power and destroy the last vestiges of democratic government. Once they start racking up wins, the country will be doomed to take the whole ugly trip through the last two stages, with no turnoffs or pit stops between now and the end.

What awaits us? In stage four, as the duo assumes full control of the country, power struggles emerge between the brownshirt-bred party faithful and the institutions of the conservative elites -- church, military, professions, and business. The character of the regime is determined by who gets the upper hand. If the party members (who gained power through street thuggery) win, an authoritarian police state may well follow. If the conservatives can get them back under control, a more traditional theocracy, corporatocracy, or military regime can re-emerge over time. But in neither case will the results resemble the democracy that this alliance overthrew.

Paxton characterizes stage five as "radicalization or entropy." Radicalization is likely if the new regime scores a big military victory, which consolidates its power and whets its appetite for expansion and large-scale social engineering. (See: Germany) In the absence of a radicalizing event, entropy may set in, as the state gets lost in its own purposes and degenerates into incoherence. (See: Italy)

It's so easy right now to look at the melee on the right and discount it as pure political theater of the most absurdly ridiculous kind. It's a freaking puppet show. These people can't be serious. Sure, they're angry -- but they're also a minority, out of power and reduced to throwing tantrums. Grown-ups need to worry about them about as much as you'd worry about a furious five-year-old threatening to hold her breath until she turned blue.

Unfortunately, all the noise and bluster actually obscures the danger. These people are as serious as a lynch mob, and have already taken the first steps toward becoming one. And they're going to walk taller and louder and prouder now that their bumbling efforts at civil disobedience are being committed with the full sanction and support of the country's most powerful people, who are cynically using them in a last-ditch effort to save their own places of profit and prestige.

We've arrived. We are now parked on the exact spot where our best experts tell us full-blown fascism is born. Every day that the conservatives in Congress, the right-wing talking heads, and their noisy minions are allowed to hold up our ability to govern the country is another day we're slowly creeping across the final line beyond which, history tells us, no country has ever been able to return.

How do we pull back? That's my next post.



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January 19, 2009

Progressive Revolution: We Can't Afford to Play Small-Ball and Tip-Toe Around Right-Wingers Anymore

Cover of sheet music for

Image via Wikipedia

Alternet.org
The following is an excerpt from chapter 8 of Mike Lux's new book, "The Progressive Revolution: How the Best in America Came to Be" (Wiley, 2009). In this text, Lux argues that a "culture of caution" dominates Democratic politics in the modern era: "When you try something big and fail, even if the failure is due in great part to your own timidity, you only become more cautious. The failure of health-care reform made President Clinton more cautious, and he started playing small ball." As Obama's inauguration approaches, progressives and Democrats in Washington need to overcome their fears of proposing bold policies and stand up for the kind of America they believe in.
When Barack Obama based much of his 2008 Presidential campaign on the theme of hope, he certainly wasn't the first candidate to make that pitch. And when John McCain, George W. Bush, and Dick Cheney, during the years since 9/11, preached fear and more fear and nothing but fear, they weren't the first to do that, either. The entire history of American political debate can, in some sense, be described as the argument between the hope of progressives for a better future vs. the fear of conservatives who want to protect the way things are now.
In recent decades, neither party has been able to get a toehold as an enduring political majority. The Republicans' problem has been that they aggressively overreach, and then their rather extreme policy prescriptions just don't work. We get wars with no exit plans, side tax cuts that result in gigantic deficits, and voluntary goals for industry that never result in anything tangible happening.
For Democrats, the problem has been the opposite. They have been so beaten down by the conservative attack machine that they have allowed themselves to get into the habit of being cautious. When in power, they have had decent policy ideas that have produced pretty good results, but the results aren't substantial enough to make permanent changes or get voters excited about what Democrats are trying to accomplish. Since the tumultuous change decade of the 1960s and the ugly backlash that followed it, Democrats have often been too scared to think big about progressive change, and it has hurt them. ...
Fear and Conservatism
Fear has been a staple of every generation of conservatives .... Fear of the democratic mob. Fear of the freed slave. Fear of the liberated woman destroying the traditional family. Fear of freethinkers destroying religion. Fear of communism. Fear of gays and lesbians. Fear of hippies, "free love," and the drug culture. Fear of the immigrant. In a bizarre twist, Social Darwinism gave us fear of the weak, and in the modern version of Social Darwinism, Reagan gave us fear of the poor on welfare. Post-9/11, you can now add in the ever-potent fear of terrorism. Sadly, while some of those fears have faded with the passage of history, many remain with us, still powerful.
Many conservatives still fear feminism, sometimes to a hilarious degree. Here is one of my all-time favorite quotes, from the inimitable Pat Robertson: "[Feminism] is about a socialist, anti-family political movement that encourages women to leave their husbands, kill their children, practice witchcraft, destroy capitalism and become lesbians."
I had no idea feminism was so comprehensive, but there you have it. Of course, many men who are threatened by strong women aren't quite so hysterical, but like threatened people everywhere, they love to mock. Rush Limbaugh, who coined the feminazi, has this definition of feminism: "Feminism was established so as to allow unattractive women easier access to the mainstream of society."
The prospect of empowered women isn't the only fear that conservatives have carried throughout the years of our nation's existence. They have always feared free thinking, which opens the door to a range of ideas and beliefs. The notion that their children might be exposed to any ideas or scientific theories that are different from what is being taught at home, as exemplified by the battles that are fought daily about public education, still scares conservatives a great deal. Read articles from any local newspaper about the nature of their resistance-to the teaching of evolution, the discussion of global warming, the assignment of certain books by English teachers, and so on-and you will see parents who are terrified that their own children might learn a way of thinking contrary to their own.
Fears of communism and welfare have faded somewhat in the last twenty years because of the fall of the Soviet Union and the passage of welfare reform, but they have been quickly replaced by conservatives' finding new things to scare voters with. Terrorism and immigrants have become the new hot-button excuses for pushing the political fear button. Or maybe I should amend that: terrorism, at least, is relatively new as a major fear for voters because until 9/11, people knew it could be a problem but didn't worry about it much. After 9/11, it became the biggest thing Americans were scared of. Immigration, on the other hand, is a very old fear that conservatives have been exploiting with renewed vigor in recent years.
In the early days of the United States, immigrants were generally quite welcome because the country had an ever expanding need for new workers, farmers, and pioneers to go out west. But by the 1850s, as more poor and working-class Irish journeyed across the Atlantic to settle here, the combination of anti-poor and anti-Catholic bigotry stirred up the vicious anti-immigrant movement called, appropriately enough, the Know-Nothings (the name came from the fact that their leaders swore an oath of secrecy about being involved in the movement, so that if asked about it, they said they knew nothing).
To join the organization of the original Know-Nothing movement, the Order of the Star-Spangled Banner, you had to be white and male, be born in the United States, and not only be Protestant but have no family connection whatsoever to Catholicism. The Know-Nothing political party, called the American Party, won nine gubernatorial seats and controlled at least one branch of the legislature in six states during the mid-1850s. It ran former president Millard Fillmore as its presidential candidate in the 1856 election, and he received about a quarter of the votes. But the movement quickly faded because the slavery issue soon overwhelmed everything else.
Throughout the late 1800s, another conservative period in U.S. history, immigration was regularly featured in the American political debate. Concerns about Chinese immigrants in California and Irish immigrants in the east were a constant refrain in the arguments against voting rights and civil rights. Sadly, even the populist movement was tainted by anti-immigrant rhetoric, as well as by its alliance with southern segregationists.
The Chinese Exclusion Act was the first major restriction on immigration. Passed in 1882, it prohibited most immigration from Asia and took away the right of Chinese immigrants to become citizens. However, it was after World War I that anti-immigrant zeal truly reached its peak. Fearing a wave of postwar refugees and gripped by the conservative frenzy of the times, Congress passed legislation, in 1921 and 1924, that restricted immigration. The Emergency Quota Act of 1921 limited European immigration to 3 percent of the total population of each European nationality living in the United States as of 1910. The Immigration Act of 1924 went much further, limiting European immigration to 2 percent of each nationality living in the United States as of 1890.
Just as conservatives do today, back then they also used people's fear of immigrants to attack other progressive ideas and legislation. Congressional opponents of the 14th and 15th amendments, for example, worried that immigrants would take advantage of these new voting rights. In the 1920s and earlier, immigrant bashers were anxious about what kinds of communists, socialists, and anarchists might be coming over to contaminate our population.
For example, a San Francisco newspaper, the Daily American printed the following editorial in April 1881:
Steamships are vomiting forth rotten cargoes of a thousand Chinese fortnightly, smitten and cursed with the plague of small-pox, and with other deadly plagues. The one-hundred thousand Chinese on this coast today, without family ties, with no elements of a prosperous immigration, the bronze locusts from Asia, plague-bearing[,] are eating out the substance which rightly belongs to the patrimony of the people.The single Chinese immigrant does, in this sense, usurp the place of a family. Trades and industries languish. The evils of Chinese immigration are upon us full force, aggregated by obstructions which originated with politicians who care more for some petty interest of party (the democratic party) than for the great and vital interests of the country.
If you think that was then and things have progressed, here are a couple of quotes from the current leadership of the anti immigration movement. The first comes from Congressman Virgil Goode of Virginia, who gained notoriety when he criticized Keith Ellison's choice to be sworn in using a copy of the Koran, rather than the Bible. Good warned his constituents, "If American citizens don't wake up and adopt the Virgil Goode position on immigration, there will likely be many more Muslims elected to office." He also had this to say about Hispanic immigration: "My message to them is, not in two weeks, not in two months, not in two years, never! We must be clear that we will not surrender America and we will not turn the United States over to the invaders from south of the border."
Another anti-immigration leader, Joseph Turner -- a staff member of the most powerful anti-immigration lobbying group, Federation for American Immigration Reform (FAIR) -- recently said this in a letter to anti-immigration contributors: "Our enemies are bloodied and beaten. We cannot relent. Our boot is on their throat and we must have the willingness to crush their "throat" so that we can put our enemy down for good. The sovereignty of our nation and the future of our culture and civilization are at stake. The United States culture is man's salvation. If we perish, man perishes."
These statements were made in 2006 and 2007, not in some long-ago debate when social conventions and attitudes were different. And they were not the ravings of marginal crazies or rabid talk-show hosts; they were made by a senior member of the Republican caucus in Congress and by a leader of one of the biggest organizations working on the anti-immigration side of the aisle.
These are legitimate issues to debate in terms of immigration policy. Having better border security is a good thing, and we should be worried about corporations that try to exploit immigrant labor. But we can work those issues through and create a legitimate path to citizenship for immigrants without resorting to the fearmongering of the right wing.
Just as stopping the spread of totalitarian communism and keeping us safe from Soviet aggression during the Cold War were important objectives, today we need to deal with the real threat of terrorism. Many thoughtful suggestions, such as those generated by the Hart-Rudman commission and the 9/11 Commission, have been put forward. Important issues like securing the uranium from old Soviet weapons sites and keeping it away from the hands of terrorists, as well as safeguarding our own country's nuclear and chemical facilities to a greater degree, ought to be priorities for the U.S. government. What is fundamentally wrong, though, is turning the fear of terrorism into a political football, as Bush, Cheney, and other right-wingers have done.
Here's George W. Bush in 2004: "The Democrat approach in Iraq comes down to this: The terrorists win and America loses. That's what's at stake in this election."
And Dick Cheney: "If we make the wrong choice, then the danger is that we'll get hit again-that we'll be hit in a way that will be devastating from the standpoint of the United States."
Comparing a politician to Joe McCarthy is pretty strong stuff, but I find it hard to avoid the comparison when we live in a time when government officials spout the rhetoric I've just quoted. Using fear to justify virtually everything you want to do-from torture to absurd levels of government secrecy, to a war with no exit plan, to no-bid contracts for your biggest contributors, to violating the law and the constitution with warrantless wiretapping-is fundamentally wrong. Just as John Dean said that the Bush administration scandals have been the worst since Watergate, I'd be inclined to argue that Bush's and the Republicans' fearmongering over terrorism has been worse than McCarthy's fearmongering over Communism. ...
On my blog, OpenLeft.com, I have written about the timidity of Democrats in terms of both policy and politics. I call it the "culture of caution," a name I thought of in 2005 when my Democratic friends on Capitol Hill began to talk about the Republicans' culture of corruption. I liked that phrase and used it a lot myself in attacking the Republicans in 2005 and 2006, but I also thought, well, that is their problem, while ours is a culture of caution. ...
The Culture of Caution
In the culture of caution that dominates Democratic politics in the modern era, when you try something big and fail, even if the failure is due in great part to your own timidity, you only become more cautious. The failure of health-care reform made President Clinton more cautious, and he started playing small ball. President Clinton famously advocated support for things like school uniforms and agreed to support bad Republican bills on welfare reform and telecommunications reform. Clinton deserves credit for standing up to Republicans in the 1995 budget showdown, a decision that was the most important factor in his winning re-election, and for the other achievements I mentioned previously. For the most part, however, his last six years in office were a time of very modest policy ideas.
The culture of caution hurt the Democrats' political strategy as well. When the Lewinsky scandal and the impeachment fight with the Republicans reared their ugly heads in 1998, I was working for the progressive group People for the American Way. We got heavily involved in opposing the impeachment and worked alongside the activists who eventually started MoveOn.org. We ran ads saying that it was time for the country to stop worrying about a sex scandal and "move on." Many Democratic politicians were horrified at those ads, convinced that by mentioning the issue we would just remind voters of what they didn't like about Clinton. We were asked by the party committees and the top members of Congress to pull them, but our focus groups had convinced us that we were right and should stand out ground. The message worked so well that candidates running in competitive races started to use the message in the ads, and, eventually, even the party committees did as well. Democrats picked up five seats in the 1998 elections and thereby stunned the pundits of conventional wisdom, who had widely predicted Democratic losses of thirty seats or more in Congress. It was the best showing for the party of a president in his sixth year in office in history since 1822, when James Monroe essentially had no opposition party. But Democrats would likely have won control of Congress if the Democratic establishment had not been so cautious for so long about facing the impeachment issue.
When Bush took over and exhibited an aggressive form of ideological partisanship never before seen in modern history, Democrats sometimes stood up to him, but all too frequently, they rolled over. This was especially true on national security and civil liberties issues after 9/11.
In 2002, when the authorization vote on the Iraq War came up, I was told in confidence by a top aide to Dick Gephardt that if Democrats would cut a deal with Bush on the war, the issue would go away and Democrats would win the 2002 election on domestic issues. That same cycle, I was told by a top pollster for the party committees that Democrats should just avoid talking about national security altogether because it wasn't our strongest issue.
Of course, this strategy didn't work out so well, as Democrats went down to an ugly defeat in the 2002 election, where security issues dominated. In fact, Gephardt's strategy of cutting a deal with Bush was a political disaster. Progressive antiwar Democrats were divided and discouraged, and the Republicans attacked the Democrats just as hard as they would have otherwise on national security. The deal also played out poorly in the 2004 elections because John Kerry could never quite explain why he had voted for the war, even though he later said that he opposed it.
The most aggravating thing about the Democratic culture of caution is how strong it is, even when the aggressive approaches are working. Too many Democrats remained cautious despite their win in 2006 using heavily populist and antiwar campaigns, and even when Bush's approval ratings and credibility had gone down the tubes. In 2007 and 2008, Democrats caved multiple times on war-related votes and on civil liberties; they lived in fear that a president with a 30 percent approval rating would call them soft on terrorism.
Although I regret that the Democrats haven't stood up to Bush more on security and civil liberties issues, and I think they could have easily survived politically if they had, there is at least a stronger argument for being politically careful on those issues -- voters are really scared of terrorism, and the message for Democrats on security issues is complicated. On domestic policy, though, Democrats have also failed to be strong advocates of dramatic new initiatives. The minimum wage and ethics initiatives they passed were solid achievements; forcing Bush to veto S-CHIP has been a worthy political fight to engage in, as was compelling him to veto legislation to withdraw troops from Iraq. The compromise energy bill that the Democrats passed and got Bush to sign had some respectable policy initiatives in it although it also had some poor ideas. But Democrats have failed to provoke major battles with Bush and the Republicans to illustrate how important their policy differences are.
Mike Lux is the author of The Progressive Revolution: How the Best in America Came to Be (Wiley, 2009), and is the co-founder and President of Progressive Strategies. Since starting the company, Mike has launched a number of important projects, including American Family Voices, an issue advocacy group working on pocketbook issues for American families; and the Progressive Donor Network, which works to coordinate a network of individual donors, issue advocacy groups, and top flight political consultants and strategists.
© 2009 Wiley All rights reserved.
View this story online at: http://www.alternet.org/story/120236/
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Progressive Revolution: We Can't Afford to Play Small-Ball and Tip-Toe Around Right-Wingers Anymore

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Alternet.org
The following is an excerpt from chapter 8 of Mike Lux's new book, "The Progressive Revolution: How the Best in America Came to Be" (Wiley, 2009). In this text, Lux argues that a "culture of caution" dominates Democratic politics in the modern era: "When you try something big and fail, even if the failure is due in great part to your own timidity, you only become more cautious. The failure of health-care reform made President Clinton more cautious, and he started playing small ball." As Obama's inauguration approaches, progressives and Democrats in Washington need to overcome their fears of proposing bold policies and stand up for the kind of America they believe in.
When Barack Obama based much of his 2008 Presidential campaign on the theme of hope, he certainly wasn't the first candidate to make that pitch. And when John McCain, George W. Bush, and Dick Cheney, during the years since 9/11, preached fear and more fear and nothing but fear, they weren't the first to do that, either. The entire history of American political debate can, in some sense, be described as the argument between the hope of progressives for a better future vs. the fear of conservatives who want to protect the way things are now.
In recent decades, neither party has been able to get a toehold as an enduring political majority. The Republicans' problem has been that they aggressively overreach, and then their rather extreme policy prescriptions just don't work. We get wars with no exit plans, side tax cuts that result in gigantic deficits, and voluntary goals for industry that never result in anything tangible happening.
For Democrats, the problem has been the opposite. They have been so beaten down by the conservative attack machine that they have allowed themselves to get into the habit of being cautious. When in power, they have had decent policy ideas that have produced pretty good results, but the results aren't substantial enough to make permanent changes or get voters excited about what Democrats are trying to accomplish. Since the tumultuous change decade of the 1960s and the ugly backlash that followed it, Democrats have often been too scared to think big about progressive change, and it has hurt them. ...
Fear and Conservatism
Fear has been a staple of every generation of conservatives .... Fear of the democratic mob. Fear of the freed slave. Fear of the liberated woman destroying the traditional family. Fear of freethinkers destroying religion. Fear of communism. Fear of gays and lesbians. Fear of hippies, "free love," and the drug culture. Fear of the immigrant. In a bizarre twist, Social Darwinism gave us fear of the weak, and in the modern version of Social Darwinism, Reagan gave us fear of the poor on welfare. Post-9/11, you can now add in the ever-potent fear of terrorism. Sadly, while some of those fears have faded with the passage of history, many remain with us, still powerful.
Many conservatives still fear feminism, sometimes to a hilarious degree. Here is one of my all-time favorite quotes, from the inimitable Pat Robertson: "[Feminism] is about a socialist, anti-family political movement that encourages women to leave their husbands, kill their children, practice witchcraft, destroy capitalism and become lesbians."
I had no idea feminism was so comprehensive, but there you have it. Of course, many men who are threatened by strong women aren't quite so hysterical, but like threatened people everywhere, they love to mock. Rush Limbaugh, who coined the feminazi, has this definition of feminism: "Feminism was established so as to allow unattractive women easier access to the mainstream of society."
The prospect of empowered women isn't the only fear that conservatives have carried throughout the years of our nation's existence. They have always feared free thinking, which opens the door to a range of ideas and beliefs. The notion that their children might be exposed to any ideas or scientific theories that are different from what is being taught at home, as exemplified by the battles that are fought daily about public education, still scares conservatives a great deal. Read articles from any local newspaper about the nature of their resistance-to the teaching of evolution, the discussion of global warming, the assignment of certain books by English teachers, and so on-and you will see parents who are terrified that their own children might learn a way of thinking contrary to their own.
Fears of communism and welfare have faded somewhat in the last twenty years because of the fall of the Soviet Union and the passage of welfare reform, but they have been quickly replaced by conservatives' finding new things to scare voters with. Terrorism and immigrants have become the new hot-button excuses for pushing the political fear button. Or maybe I should amend that: terrorism, at least, is relatively new as a major fear for voters because until 9/11, people knew it could be a problem but didn't worry about it much. After 9/11, it became the biggest thing Americans were scared of. Immigration, on the other hand, is a very old fear that conservatives have been exploiting with renewed vigor in recent years.
In the early days of the United States, immigrants were generally quite welcome because the country had an ever expanding need for new workers, farmers, and pioneers to go out west. But by the 1850s, as more poor and working-class Irish journeyed across the Atlantic to settle here, the combination of anti-poor and anti-Catholic bigotry stirred up the vicious anti-immigrant movement called, appropriately enough, the Know-Nothings (the name came from the fact that their leaders swore an oath of secrecy about being involved in the movement, so that if asked about it, they said they knew nothing).
To join the organization of the original Know-Nothing movement, the Order of the Star-Spangled Banner, you had to be white and male, be born in the United States, and not only be Protestant but have no family connection whatsoever to Catholicism. The Know-Nothing political party, called the American Party, won nine gubernatorial seats and controlled at least one branch of the legislature in six states during the mid-1850s. It ran former president Millard Fillmore as its presidential candidate in the 1856 election, and he received about a quarter of the votes. But the movement quickly faded because the slavery issue soon overwhelmed everything else.
Throughout the late 1800s, another conservative period in U.S. history, immigration was regularly featured in the American political debate. Concerns about Chinese immigrants in California and Irish immigrants in the east were a constant refrain in the arguments against voting rights and civil rights. Sadly, even the populist movement was tainted by anti-immigrant rhetoric, as well as by its alliance with southern segregationists.
The Chinese Exclusion Act was the first major restriction on immigration. Passed in 1882, it prohibited most immigration from Asia and took away the right of Chinese immigrants to become citizens. However, it was after World War I that anti-immigrant zeal truly reached its peak. Fearing a wave of postwar refugees and gripped by the conservative frenzy of the times, Congress passed legislation, in 1921 and 1924, that restricted immigration. The Emergency Quota Act of 1921 limited European immigration to 3 percent of the total population of each European nationality living in the United States as of 1910. The Immigration Act of 1924 went much further, limiting European immigration to 2 percent of each nationality living in the United States as of 1890.
Just as conservatives do today, back then they also used people's fear of immigrants to attack other progressive ideas and legislation. Congressional opponents of the 14th and 15th amendments, for example, worried that immigrants would take advantage of these new voting rights. In the 1920s and earlier, immigrant bashers were anxious about what kinds of communists, socialists, and anarchists might be coming over to contaminate our population.
For example, a San Francisco newspaper, the Daily American printed the following editorial in April 1881:
Steamships are vomiting forth rotten cargoes of a thousand Chinese fortnightly, smitten and cursed with the plague of small-pox, and with other deadly plagues. The one-hundred thousand Chinese on this coast today, without family ties, with no elements of a prosperous immigration, the bronze locusts from Asia, plague-bearing[,] are eating out the substance which rightly belongs to the patrimony of the people.The single Chinese immigrant does, in this sense, usurp the place of a family. Trades and industries languish. The evils of Chinese immigration are upon us full force, aggregated by obstructions which originated with politicians who care more for some petty interest of party (the democratic party) than for the great and vital interests of the country.
If you think that was then and things have progressed, here are a couple of quotes from the current leadership of the anti immigration movement. The first comes from Congressman Virgil Goode of Virginia, who gained notoriety when he criticized Keith Ellison's choice to be sworn in using a copy of the Koran, rather than the Bible. Good warned his constituents, "If American citizens don't wake up and adopt the Virgil Goode position on immigration, there will likely be many more Muslims elected to office." He also had this to say about Hispanic immigration: "My message to them is, not in two weeks, not in two months, not in two years, never! We must be clear that we will not surrender America and we will not turn the United States over to the invaders from south of the border."
Another anti-immigration leader, Joseph Turner -- a staff member of the most powerful anti-immigration lobbying group, Federation for American Immigration Reform (FAIR) -- recently said this in a letter to anti-immigration contributors: "Our enemies are bloodied and beaten. We cannot relent. Our boot is on their throat and we must have the willingness to crush their "throat" so that we can put our enemy down for good. The sovereignty of our nation and the future of our culture and civilization are at stake. The United States culture is man's salvation. If we perish, man perishes."
These statements were made in 2006 and 2007, not in some long-ago debate when social conventions and attitudes were different. And they were not the ravings of marginal crazies or rabid talk-show hosts; they were made by a senior member of the Republican caucus in Congress and by a leader of one of the biggest organizations working on the anti-immigration side of the aisle.
These are legitimate issues to debate in terms of immigration policy. Having better border security is a good thing, and we should be worried about corporations that try to exploit immigrant labor. But we can work those issues through and create a legitimate path to citizenship for immigrants without resorting to the fearmongering of the right wing.
Just as stopping the spread of totalitarian communism and keeping us safe from Soviet aggression during the Cold War were important objectives, today we need to deal with the real threat of terrorism. Many thoughtful suggestions, such as those generated by the Hart-Rudman commission and the 9/11 Commission, have been put forward. Important issues like securing the uranium from old Soviet weapons sites and keeping it away from the hands of terrorists, as well as safeguarding our own country's nuclear and chemical facilities to a greater degree, ought to be priorities for the U.S. government. What is fundamentally wrong, though, is turning the fear of terrorism into a political football, as Bush, Cheney, and other right-wingers have done.
Here's George W. Bush in 2004: "The Democrat approach in Iraq comes down to this: The terrorists win and America loses. That's what's at stake in this election."
And Dick Cheney: "If we make the wrong choice, then the danger is that we'll get hit again-that we'll be hit in a way that will be devastating from the standpoint of the United States."
Comparing a politician to Joe McCarthy is pretty strong stuff, but I find it hard to avoid the comparison when we live in a time when government officials spout the rhetoric I've just quoted. Using fear to justify virtually everything you want to do-from torture to absurd levels of government secrecy, to a war with no exit plan, to no-bid contracts for your biggest contributors, to violating the law and the constitution with warrantless wiretapping-is fundamentally wrong. Just as John Dean said that the Bush administration scandals have been the worst since Watergate, I'd be inclined to argue that Bush's and the Republicans' fearmongering over terrorism has been worse than McCarthy's fearmongering over Communism. ...
On my blog, OpenLeft.com, I have written about the timidity of Democrats in terms of both policy and politics. I call it the "culture of caution," a name I thought of in 2005 when my Democratic friends on Capitol Hill began to talk about the Republicans' culture of corruption. I liked that phrase and used it a lot myself in attacking the Republicans in 2005 and 2006, but I also thought, well, that is their problem, while ours is a culture of caution. ...
The Culture of Caution
In the culture of caution that dominates Democratic politics in the modern era, when you try something big and fail, even if the failure is due in great part to your own timidity, you only become more cautious. The failure of health-care reform made President Clinton more cautious, and he started playing small ball. President Clinton famously advocated support for things like school uniforms and agreed to support bad Republican bills on welfare reform and telecommunications reform. Clinton deserves credit for standing up to Republicans in the 1995 budget showdown, a decision that was the most important factor in his winning re-election, and for the other achievements I mentioned previously. For the most part, however, his last six years in office were a time of very modest policy ideas.
The culture of caution hurt the Democrats' political strategy as well. When the Lewinsky scandal and the impeachment fight with the Republicans reared their ugly heads in 1998, I was working for the progressive group People for the American Way. We got heavily involved in opposing the impeachment and worked alongside the activists who eventually started MoveOn.org. We ran ads saying that it was time for the country to stop worrying about a sex scandal and "move on." Many Democratic politicians were horrified at those ads, convinced that by mentioning the issue we would just remind voters of what they didn't like about Clinton. We were asked by the party committees and the top members of Congress to pull them, but our focus groups had convinced us that we were right and should stand out ground. The message worked so well that candidates running in competitive races started to use the message in the ads, and, eventually, even the party committees did as well. Democrats picked up five seats in the 1998 elections and thereby stunned the pundits of conventional wisdom, who had widely predicted Democratic losses of thirty seats or more in Congress. It was the best showing for the party of a president in his sixth year in office in history since 1822, when James Monroe essentially had no opposition party. But Democrats would likely have won control of Congress if the Democratic establishment had not been so cautious for so long about facing the impeachment issue.
When Bush took over and exhibited an aggressive form of ideological partisanship never before seen in modern history, Democrats sometimes stood up to him, but all too frequently, they rolled over. This was especially true on national security and civil liberties issues after 9/11.
In 2002, when the authorization vote on the Iraq War came up, I was told in confidence by a top aide to Dick Gephardt that if Democrats would cut a deal with Bush on the war, the issue would go away and Democrats would win the 2002 election on domestic issues. That same cycle, I was told by a top pollster for the party committees that Democrats should just avoid talking about national security altogether because it wasn't our strongest issue.
Of course, this strategy didn't work out so well, as Democrats went down to an ugly defeat in the 2002 election, where security issues dominated. In fact, Gephardt's strategy of cutting a deal with Bush was a political disaster. Progressive antiwar Democrats were divided and discouraged, and the Republicans attacked the Democrats just as hard as they would have otherwise on national security. The deal also played out poorly in the 2004 elections because John Kerry could never quite explain why he had voted for the war, even though he later said that he opposed it.
The most aggravating thing about the Democratic culture of caution is how strong it is, even when the aggressive approaches are working. Too many Democrats remained cautious despite their win in 2006 using heavily populist and antiwar campaigns, and even when Bush's approval ratings and credibility had gone down the tubes. In 2007 and 2008, Democrats caved multiple times on war-related votes and on civil liberties; they lived in fear that a president with a 30 percent approval rating would call them soft on terrorism.
Although I regret that the Democrats haven't stood up to Bush more on security and civil liberties issues, and I think they could have easily survived politically if they had, there is at least a stronger argument for being politically careful on those issues -- voters are really scared of terrorism, and the message for Democrats on security issues is complicated. On domestic policy, though, Democrats have also failed to be strong advocates of dramatic new initiatives. The minimum wage and ethics initiatives they passed were solid achievements; forcing Bush to veto S-CHIP has been a worthy political fight to engage in, as was compelling him to veto legislation to withdraw troops from Iraq. The compromise energy bill that the Democrats passed and got Bush to sign had some respectable policy initiatives in it although it also had some poor ideas. But Democrats have failed to provoke major battles with Bush and the Republicans to illustrate how important their policy differences are.
Mike Lux is the author of The Progressive Revolution: How the Best in America Came to Be (Wiley, 2009), and is the co-founder and President of Progressive Strategies. Since starting the company, Mike has launched a number of important projects, including American Family Voices, an issue advocacy group working on pocketbook issues for American families; and the Progressive Donor Network, which works to coordinate a network of individual donors, issue advocacy groups, and top flight political consultants and strategists.
© 2009 Wiley All rights reserved.
View this story online at: http://www.alternet.org/story/120236/
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December 09, 2008

Why the U.S. Has a Quarter of the World's Prisoners

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AlterNet | Erikka Yancy
I can think of no greater hell on earth than spending day after day in a little box. What about non-violent offenders? The drug addicts, the bad check writers, the people that are filling up our jails and costing us money?
The number of prisoners in prisons for drugs equals the total number of prisoners in 1980! The good news: in the past 20 years spending for higher education has increased 21%. The bad news: in that same 20 years, spending for prisons increased 127%.
We're creating criminals, not citizens.
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November 10, 2008

Who's to blame for the biggest financial catastrophe of our time?

Behind the UBS Oops

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GlobalResearch.ca
Years before Phil Gramm was a McCain campaign adviser and a lobbyist for a Swiss bank at the center of the housing credit crisis, he pulled a sly maneuver in the Senate that helped create today's subprime meltdown
Who's to blame for the biggest financial catastrophe of our time? There are plenty of culprits, but one candidate for lead perp is former Sen. Phil Gramm. Eight years ago, as part of a decades-long anti-regulatory crusade, Gramm pulled a sly legislative maneuver that greased the way to the multibillion-dollar subprime meltdown. Yet has Gramm been banished from the corridors of power? Reviled as the villain who bankrupted Middle America? Hardly. Now a well-paid executive at a Swiss bank, Gramm cochairs Sen. John McCain's presidential campaign and advises the Republican candidate on economic matters. He's been mentioned as a possible Treasury secretary should McCain win. That's right: A guy who helped screw up the global financial system could end up in charge of US economic policy. Talk about a market failure.
Gramm's long been a handmaiden to Big Finance. In the 1990s, as chairman of the Senate banking committee, he routinely turned down Securities and Exchange Commission chairman Arthur Levitt's requests for more money to police Wall Street; during this period, the sec's workload shot up 80 percent, but its staff grew only 20 percent. Gramm also opposed an sec rule that would have prohibited accounting firms from getting too close to the companies they audited--at one point, according to Levitt's memoir, he warned the sec chairman that if the commission adopted the rule, its funding would be cut. And in 1999, Gramm pushed through a historic banking deregulation bill that decimated Depression-era firewalls between commercial banks, investment banks, insurance companies, and securities firms--setting off a wave of merger mania.
But Gramm's most cunning coup on behalf of his friends in the financial services industry--friends who gave him millions over his 24-year congressional career--came on December 15, 2000. It was an especially tense time in Washington. Only two days earlier, the Supreme Court had issued its decision on Bush v. Gore. President Bill Clinton and the Republican-controlled Congress were locked in a budget showdown. It was the perfect moment for a wily senator to game the system. As Congress and the White House were hurriedly hammering out a $384-billion omnibus spending bill, Gramm slipped in a 262-page measure called the Commodity Futures Modernization Act. Written with the help of financial industry lobbyists and cosponsored by Senator Richard Lugar (R-Ind.), the chairman of the agriculture committee, the measure had been considered dead--even by Gramm. Few lawmakers had either the opportunity or inclination to read the version of the bill Gramm inserted. "Nobody in either chamber had any knowledge of what was going on or what was in it," says a congressional aide familiar with the bill's history.
It's not exactly like Gramm hid his handiwork--far from it. The balding and bespectacled Texan strode onto the Senate floor to hail the act's inclusion into the must-pass budget package. But only an expert, or a lobbyist, could have followed what Gramm was saying. The act, he declared, would ensure that neither the sec nor the Commodity Futures Trading Commission (cftc) got into the business of regulating newfangled financial products called swaps--and would thus "protect financial institutions from overregulation" and "position our financial services industries to be world leaders into the new century."
It didn't quite work out that way. For starters, the legislation contained a provision--lobbied for by Enron, a generous contributor to Gramm--that exempted energy trading from regulatory oversight, allowing Enron to run rampant, wreck the California electricity market, and cost consumers billions before it collapsed. (For Gramm, Enron was a family affair. Eight years earlier, his wife, Wendy Gramm, as cftc chairwoman, had pushed through a rule excluding Enron's energy futures contracts from government oversight. Wendy later joined the Houston-based company's board, and in the following years her Enron salary and stock income brought between $915,000 and $1.8 million into the Gramm household.)
But the Enron loophole was small potatoes compared to the devastation that unregulated swaps would unleash. Credit default swaps are essentially insurance policies covering the losses on securities in the event of a default. Financial institutions buy them to protect themselves if an investment they hold goes south. It's like bookies trading bets, with banks and hedge funds gambling on whether an investment (say, a pile of subprime mortgages bundled into a security) will succeed or fail. Because of the swap-related provisions of Gramm's bill--which were supported by Fed chairman Alan Greenspan and Treasury secretary Larry Summers--a $62 trillion market (nearly four times the size of the entire US stock market) remained utterly unregulated, meaning no one made sure the banks and hedge funds had the assets to cover the losses they guaranteed.
In essence, Wall Street's biggest players (which, thanks to Gramm's earlier banking deregulation efforts, now incorporated everything from your checking account to your pension fund) ran a secret casino. "Tens of trillions of dollars of transactions were done in the dark," says University of San Diego law professor Frank Partnoy, an expert on financial markets and derivatives. "No one had a picture of where the risks were flowing." Betting on the risk of any given transaction became more important--and more lucrative--than the transactions themselves, Partnoy notes: "So there was more betting on the riskiest subprime mortgages than there were actual mortgages." Banks and hedge funds, notes Michael Greenberger, who directed the cftc's division of trading and markets in the late 1990s, "were betting the subprimes would pay off and they would not need the capital to support their bets."
These unregulated swaps have been at "the heart of the subprime meltdown," says Greenberger. "I happen to think Gramm did not know what he was doing. I don't think a member in Congress had read the 262-page bill or had thought of the cataclysm it would cause." In 1998, Greenberger's division at the cftc proposed applying regulations to the burgeoning derivatives market. But, he says, "all hell broke loose. The lobbyists for major commercial banks and investment banks and hedge funds went wild. They all wanted to be trading without the government looking over their shoulder."
Now, belatedly, the feds are swooping in--but not to regulate the industry, only to bail it out, as they did in engineering the March takeover of investment banking giant Bear Stearns by JPMorgan Chase, fearing the firm's collapse could trigger a dominoes-like crash of the entire credit derivatives market.
No one in Washington apologizes for anything, so it's no surprise that Gramm has failed to issue any mea culpa. Post-Enron, says Greenberger, the senator even called him to say, "You're going around saying this was my fault--and it's not my fault. I didn't intend this."
Whether or not Gramm had bothered to ponder the potential downsides of his commodities legislation, having helped set off an industry free-for-all, he reaped the rewards. In 2003, he left the Senate to take a highly lucrative job at ubs, Switzerland's largest bank, which had been able to acquire investment house PaineWebber due to his banking deregulation bill. He would soon be lobbying Congress, the Fed, and the Treasury Department for ubs on banking and mortgage matters. There was a moment of poetic justice when ubs became one of the subprime crisis' top losers, writing down $37 billion as of this spring--an amount equal to its previous four years of profits combined. In a report explaining how it had managed to mess up so grandly, ubs noted that two-thirds of its losses were the fault of collateralized debt obligations--securities backed largely by subprime instruments--and that credit default swaps had been "key to the growth" of its out-of-control cdo business. (Gramm declined to comment for this article.)
Gramm's record as a reckless deregulator has not affected his rating as a Republican economic expert. Sen. John McCain has relied on him for policy advice, especially, according to the campaign, on housing matters. The two have been buddies ever since they served together in the House in the 1980s; in 1996, McCain chaired Gramm's flop of a presidential campaign. (Gramm spent $21 million and earned only 10 delegates during the gop primaries.) In 2005, McCain told a Wall Street Journal columnist that Gramm was his economic guru. Two years later, Gramm wrote a piece for the Journal extolling McCain as a modern-day Abraham Lincoln, and he's hailed McCain's love of tax cuts and free trade. Media accounts have identified Gramm as a contender for the top slot at the Treasury Department if McCain reaches the White House. "If McCain gets in," frets Lynn Turner, a former chief sec accountant, "we'll have more of the same deregulatory mess. I like John McCain, but given what I know about Phil Gramm, I wouldn't vote for McCain."
As a thriving bank exec and presidential adviser, Gramm has defied a prime economic principle: Bad products are driven out of the market. In John McCain, he has gained an important customer, so his stock has gone up in value. And there's no telling when the Gramm bubble will burst.
David Corn is Mother Jones' Washington, D.C. bureau chief.
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