Saturday, September 20, 2008

Learn To Play Ball

The drawing by Luis Quintanilla in Barcelona, 1938
Today's headline: Bush asks Congress for $700 billion for bailout
Butterfly listens
at the flowerpot:
true teaching.
And do not change. Do not divert your love from visible things. But go on loving what is good, simple and ordinary; animals and things and flowers, and keep the balance true.
---Rainer Maria Rilke
Old gnarled trees
darken the trail:
Where is the temple bell?
---Li Po
Growing up from boy to man: play some kind of ball and watch cowboys. Those were the keys to American success in my childhood. Eventually become fulfilled in business was what a guy was supposed to do, to be. I took one course in economics at Bates. The prof was young, bald and interesting, but I don't remember any of it. Not a word. It was a foreign language...without translation. There was a girl in the front row, beside his desk, I found fascinating...and so I spent the semester staring at her, until finally she noticed. I do remember Kay, from Springfield.
Baseball I liked and still do...sorta. I have to say when the Dodgers left Brooklyn, the very heart of the game cracked somehow. Now, I don't know how all the leagues work even, and I never liked pinch hitters to say nothing of these designated hitter dudes. The sound of an aluminum bat makes me sick. I never was very good at playing it, but I had some cherished moments doing so. I connect baseball more with jazz than selling cars, I guess because of the notion of teamwork...which seems to be for the support of the individual rather than the other way around---on top of which sits the owner. Or at least it used to SEEM to be like that, before football became America's preferred sport. Jazz players remain on the economic edge, but baseball stars make millions.
I went to the movies most Saturday afternoons, and usually one of the double features was a Western. Cowboys I got to know---oh, not the ones that actually herd cows: I mean the cleancut nice guys with a beautiful horse and powerful punch, who had to leave Melody Ranch (or whatever) to clean up the town and toss the rich saloonkeeper and his gang into the hoosegow. Or as we moved into the "adult Western," Shane alone and haunted keeping the open range safe from the greedy cattleman and available to the average guy like you and me and Brandon de Wilde. And Jean Arthur.
But Joe Biden said yesterday No more cowboys on Wall Street! Ronnie Reagan made Westerns and he was a favorite actor for me. I had his autographed photo on my wall. But he and his boy companion, George Bush, have ruined economics for cowboys I guess. McCain's got his maverick uniform on, six-shooter ready...and his pretty granddaughter back at the ranch...but Joe wants to send these cowboys off to the big roundup. And I believe he's probably right. We should have known it wouldn't work out, letting them ride roughshod.
Bill Moyers went after the new-time baseball zillion dollar contract guys last night, and he doesn't think Wall Street greed has trickled anything on us but waste product. Moyers looks at the facts and of course sees moral failing at the center, a betrayal of American values. Playing ball with the big boys means something entirely different on Wall Street than it did in the sandlot. So now what? Boys have it tough these days looking for a hero. It may be even more complicated for girls and their role models.
I was glad to receive an email from Bob Sheak yesterday, containing a new essay he's written and is offering up. Bob probably is the best-read fellow I know, besides being a highly decorated officer on the academic front. Professor Emeritus in both sociology and anthropology, he's got to understand statistics better than ever I could. I realize economics is another field, but here he doesn't attempt to analyze all the factors of this crisis. He's looking at what the 2 major candidates have to say and their plans thus far. Bob is good at that~~~
Different Approaches to the financial crisis:
Obama versus McCain
Bob Sheak
September 19, 2008
Through the last twenty years or so, McCain has continued in the Republican tradition of giving strong preference to powerful special interests in the corporate-dominated American economy on the assumption that profit and wealth will in time generate investments that create opportunities for other Americans. Small government, except when it comes to the interests of large corporations, Wall Street, and an increasingly privatized military, is the goal. It turns out that one recent consequence of this tradition is that there is a massive trickle-down debt that taxpayers and the next generations will have to live with for far into the future or as long as the economic system doesn't collapse.
McCain is enmeshed in this tradition. He has referred to himself as a "foot soldier in the Reagan Revolution," when during the 1970s the national debt began soaring. Far from being a "maverick," FactCheck found that, when voting in 2007, "McCain voted with his party 90% of the time," and "voted in support of President Bush's position on legislation 95% of the time."
As presidential candidate, McCain favors further tax cuts for the wealthiest and for corporations, and a continuation of the Bush administration's anti-labor stance. He also has consistently supported at least the partial privatization of Social Security, which would be a financial boon to Wall Street, cuts in spending on domestic programs, shifts in the sky-rocketing health care costs to individuals, and support for more corporate trade deals.
Along the way, Senator McCain has voted, as Robert Scheer reminds us, for the abolition of all "of the significant rules put in place at the time of the Great Depression." And, absurdly, until September 16 of this year, McCain was declaring that the "fundamentals of our economy are strong."
Modifying his free market positions on this past Tuesday, September 16, in the face of a spiraling financial crisis, McCain took the position that the government is now forced to take emergency measures, including the bail-out of large banks. He blamed the crisis on "reckless conduct, corruption, and unbridled greed on Wall Street," not on a broken financial system, and offered a plan to set up a commission to study the problem and to make recommendations about it when he is president.
Then, on September 19, under pressures stemming from the turmoil in the financial sector, McCain offered a new plan to deal with the financial crisis. Departing from his previous positions, it is a plan that calls for more government regulation and a new government entity to identify "institutions that are weak and fix them before they become insolvent" (sounds close to a bailout). His plan also calls for new laws to ensure the transparency of financial firms, clarification of regulatory standards, protection for consumers and investors against "individuals who engage in fraud, break contracts, or lie to customers," consistent policies for guaranteeing loans, and the end to government bailouts. This amounts to some increased scrutiny by the federal government of the financial institutions
The problem is there is no systemic reform. There is nothing here to separate commercial banks from the myriad types of investment (often speculative, increasingly unregulated) banks. There is nothing in McCain's plan to deal with the anticipated four million foreclosures yet to come or the related economic calamities that will affect local governments. There is nothing on how the government will recover the taxpayers' money from hundreds of billions of dollars in bad debt it has assumed from the bailouts. There is nothing to prevent appointments of people from the financial sector (special interests) from heading up key government agencies, like the Federal Reserve and Treasury Department.
What about Obama? He has espoused the position all along that there is a need to buttress, rather than further weaken, the government so that the public interest is not so increasingly subordinated to corporate- and wealth-interests. His position is reflected in his campaign tax proposals, which focus on eliminating tax breaks for families with incomes of $250,000 or more and additional corporate tax breaks. His concern about the fragility and recklessness of the financial sector is reflected in his recent efforts in the Senate. Two years ago, he introduced legislation to "stop mortgage transactions that promoted fraud, risk, or abuse." In 2007, Obama asked the Federal Reserve Chairman "to bring every stakeholder together and find a solution to the subprime mortgage meltdowns before it got worse." Then in March of this year, he advocated a "new, 21st century regulatory framework to restore accountability, transparency, and trust in our financial markets." He stated, further, "It's time to get serious about regulatory oversight, and that's what I'll do as President." On September 19, he said that there should be a bipartisan effort to "find a systematic solution to our deepening crisis" based on four principles, and said that it should be based on the following four principles.
(1) "…we cannot lose sight that we are in the midst of a broad economic crisis that also requires immediate action to create jobs and help support distressed homeowners and communities….
(2) "any taxpayer-funded support must have as its focus protecting our nation's long-term interest in a stable financial market and a growing economy rather than rewarding particular companies or the imprudent decisions of borrowers or lenders…."
(3) "this plan must be temporary and coupled with tough new oversight and regulations of our financial institutions. There must be a clear process to wind down this plan and restore private sector assets into private sector hand after restoring the stability to the system. Taxpayers must share in any upside benefit that such stability brings."
(4) "this plan should be part of a globally coordinated effort with our partners in the G-20. We are facing a global financial crisis and the United States can take a leadership role in coordinating a global response to the present crisis, as well as greater regulatory cooperation and alignment to prevent future crises."
With respect to the first principle, Obama has already advanced proposals to assist people who are harmed by the reckless and unregulated pursuit of profit in the financial sector, but he has not specified how those facing foreclosures may be assisted. Nonetheless, in a speech given on September 17th, Obama proposed "a $50 billion Emergency Economic Plan that would save 1 million jobs by rebuilding infrastructure, repairing our schools, and helping our states and localities avoid damaging budget cuts." In the same speech, he made three proposals to help people stay in their homes. He proposes to change bankruptcy laws and "offer a tax credit to struggling families that will take 10% off your mortgage interest rate. He will "crack down on predatory lenders with tough new penalties that will treat mortgage fraud like the crime that it is."
The second of Obama's principles is unclear as to how the "national interest" would be defined. The third principle implies that corporations that caused the problem may in time be rewarded. The fourth principle, that goes beyond McCain's vision, goes in the right direction and calls for attempts to build a system of international cooperation in financial institutions. At the same time, however, US foreign policy may undermine the basis for such cooperation.
Overall, Obama's plan appears to be better than McCain's plan, but it doesn't go far enough to deal with the systemic problems of the financial sector and the people negatively affected by them. My fear is that, as long as profits are the overriding goal of financial corporations, the public interest will be at best secondary.
In the meantime, the principal solution offered so far by the Bush administration is to socialize the bad investments of Wall Street. Both McCain and Obama feel constrained to go along with the process. The upshot is taxpayers and future generations will be burdened with an enormous increase in the national debt, a debt that was already approaching $10 trillion and now is adding trillions.
As Michael Hudson said on the radio/TV program Democracy Now on Thursday (September 18), there are no "free markets" in the conventional sense of the term. Rather, what we have is a "guaranteed gamble for Wall Street against industry and against labor."