SENSE AND NONSENSE—THE NEW AGE OF AQUARIUS From the editor: The 11th sign of the Zodiac Table is Aquarius—“The Water Bearer.” I am not a big believer in the astrological calendar, but on the other hand, I cannot rule out its significance. Although Obama was born Aug. 4, 1961, under the sign of Leo, his demeanor and confidence almost turns me into a believer in all things unexplainable. I do not intend to elevate Obama to the level of a messiah, but I do admit he is able to give me hope that America can solve problems created by almost 30 years of mindless, self-centered, unimaginative and greedy governance. The contrast between the intelligence of Obama and the simple-mindedness of Bush would be funny if the consequences of the Bush/Cheney years were not so serious.
Here are the reasons I think our country and our society are entering into a new Age of Aquarius in which President Obama is both willing and able to “carry the water.”
First, he is smart without an ego the size of Texas.
Second, he is apparently endowed with a sense of realism that does not deteriorate into the idealism of the far left or the magical thinking and hypocrisy of the far right.
Third, he is empathetic with people who are affected daily by the economic fallout of a three trillion dollar war of choice in Iraq and a 10 trillion dollar Wall Street binge.
Fourth, he can keep at least four “balls” in the air at one time—the economy, affordable health care for all, energy independence, and affordable and effective education policy for our kids.
Fifth, he is a good communicator. He speaks language the country can understand.
Sixth, he surrounds himself with smart advisers, listens to them, but is not intimidated by them.
Seventh, he is comfortable enough in the Office of the President to say, “Judge me by what I do and deliver, rather than what other people say I cannot do.” (Editor’s note: This is not an actual quote, but a paraphrase of many of Obama’s statements.)
Eighth, when one looks at and listens to President Obama, the color of one’s skin becomes irrelevant.
Ninth, he is as he, himself says, “persistent,” AND
Tenth, he is, at his core, a family man, however one might choose to define “family.”
There is a caveat to this assessment of the performance of President Obama through his election campaign and the first two months of his presidency. It is this. No matter how solid and honest the man, the corrupting power of money can overwhelm. If Obama does not succeed in the next four years, it will be due to the power of greedy moneyed interests.
THE REPEAL OF GLASS-STEAGALL From the editor: The primary reason our country’s economy is still in trouble is DEREGULATION. In the March issue of The Compass, we listed 13 “real villains and culprits in the economic crisis.” In doing so, we omitted perhaps the most egregious reason the financial sector imploded last September. It was the repeal of the Glass-Steagall Act and the enactment of the Gramm-Leach-Bliley Act, in 1999, signed by President Bill Clinton.
Following are excerpts, from an analysis of that disastrous event, co-authored in April, 2000 by James A. Wilcox, Chief Economist for the Office of the Comptroller of the Currency. The title of the paper is “The Repeal of Glass-Steagall and the Advent of Broad Banking.” The opening paragraph of the introduction is a “mind-blower,” especially with the benefit of hindsight. It says:
“What can banking companies do? Enactment of the Gramm-Leach-Bliley Act (GLBA) on November 12, 1999 provided a new legal answer to that question. GLBA widened the range of activities that banks and their holding companies can conduct. GLBA repealed the parts of the Banking Act of 1933 that separated commercial banking from the securities business, which have come to be known as “Glass-Steagall.” It also repealed parts of the Bank Holding Company Act of 1956 that separated commercial banking from the insurance business. Thus, GLBA permits single holding companies to offer banking, securities, and insurance, as they had before the Great Depression. (emphasis added)
“The Banking Act of 1933 and the Bank Holding Company Act of 1956 greatly restricted the ability of banks to conduct the activities associated with securities firms, insurance companies, merchant banks, and other financial companies. Banks and bank holding companies were significantly limited in their ability to enter these markets either directly or through subsidiaries of the bank.
“However, GLBA permits formation of a new category of holding company, the financial holding company, which is allowed to own banks as subsidiaries and also own subsidiaries that engage in all other financial activities--including those that the financial subsidiaries of banks cannot enter directly.
“GLBA exempts some bank activities that have a ‘securities’ component from regulation by the Securities and Exchange Commission. Examples include: third-party networking arrangements, trust activities, traditional banking transactions such as commercial paper and exempted securities, employee and shareholder benefit plans, sweep accounts, affiliate transactions, private placements, safekeeping and custody services, asset-backed securities, derivatives, and other identified banking products.” (emphasis added)
(Editor’s Note: The authors of the above analysis actually conclude that “GLBA is better seen as ratifying and extending changes that had already been made, rather than as revolutionary.” Nevertheless, the fact remains that financial products such as Credit Default Swaps (CDSs) and Collaterized Debt Obligations (CDOs) would never have appeared on the balance sheets of banks and bank holding companies if Glass-Steagall had not been repealed. In other words, there was no such thing as “toxic assets” (a peculiar oxymoron) in the financial world between 1933 and 1999. There were bad debts and foreclosures to be sure, but they were never packaged into a product so complicated that no one could possibly know their true market value. Simply put, if Glass-Steagall had not been repealed by a Republican Congress and a Democratic President, our society and the world, for that matter, would not find itself awash in debt up to our eyeballs due to a concept called “broad banking.” That fact is what politicians should be focused upon.)
THE GREATEST THREAT From the editor: The threat of terrorism hangs over the world like the toxic cloud of debris that settled over lower Manhattan on Sept. 11, 2001 as the World Trade Center collapsed. But while terrorism generates its own level of fear in reaction to its all-too vivid consequences perpetrated by nihilistic radicals, it is not the greatest threat our nation, and the world for the matter, faces as we proceed cautiously into the “bowels” of the 21st Century. The greatest threat remains the growing gap between the rich and the poor in this country and worldwide.
Political analyst and former adviser to President Nixon, Kevin Phillips has been writing about this threat since 1990 when he published his book The Politics of Rich and Poor. Two subsequent volumes, Wealth and Democracy in 2002 and American Dynasty in 2004 expanded on the theme and documented the role of the Bush political dynasty in nurturing this threat.
New York Times writer, David Cay Johnston wrote Perfectly Legal in 2003. The subtitle of the book is “The Covert Campaign to Rig Our Tax System to Benefit the Super Rich -- And Cheat Everybody Else.” In the third chapter entitled, “The Rich Get Fabulously Richer,” Johnston writes:
“Here is the most important news in these pages--just 28,000 men, women and children had as much income in 2000 as the poorest 96 million Americans. Each group had about 5 percent of all reported income that year. To visualize the enormity of this chasm imagine these two groups in geographic terms. The super rich would occupy just one-third of the seats at Yankee stadium, while those at the bottom are the equivalent of every American who lives west of Iowa--plus every one in Iowa.”
More recently, the richest of super rich—Warren Buffett—famously declared in the face of Republican charges of “class warfare,” when Democrats threaten to repeal tax cuts: “If this is class warfare, our class has won.”
The Pew Research Center published its report entitled, “A Nation of ‘Haves’ and ‘Have-Nots’?” on Sept. 13, 2007. Among its findings:
“Over the past two decades (1988-2007), a growing share of the public has come to the view that American society is divided into two groups, the ‘haves’ and the ‘have-nots.’ Today, Americans are split evenly on the two-class question with as many saying the country is divided along economic lines as say this is not the case (48% each). In sharp contrast, in 1988, 71% rejected this notion, while just 26% saw a divided nation.
“Of equal importance, the number of Americans who see themselves among the ‘have-nots’ of society has doubled over the past two decades, from 17% in 1988 to 34% in 2007.
“Meanwhile, Congressional Budget Office data show that despite the increase in the number of families with two or more earners and widespread income gains in the latter half of the 1990s, families in the middle fifth of the income distribution realized only a modest $6,600 increase in annual income between 1988 and 2007, while the top 1% of families saw their incomes rise from $839,100 to an average $1,259,700.
“Recently released Census Bureau data show that in 2006, medium household income adjusted for inflation was still 2.1% below its 1990 level. More sensationally, Bloomberg.com recently reported on a study showing that ‘top private-equity and hedge fund managers made more in 10 minutes than average-paid U.S. workers earned all of last year.’ (2006)”
When Republicans try to sabotage labor unions in the name of “Right to Work” legislation and try to preserve tax cuts for the super rich while shouting “class warfare,” they are literally participating in a greater threat to this nation’s security than any terrorist. Terrorists are nihilistic murderers of innocent victims, while Republican-supported economic policy has produced a much more subtle, yet more dangerous threat to our survival as a nation.
Copyright © 2009, The Compass Society
Comments