(Left: 1931 USA Shantytown. Right: 2008 Homeless Tent City, Reno NV.)
When Ronald Reagan was swept into office in 1980 on the popular message “Government is the problem”, the gates were opened for almost thirty years of wholesale obliteration of the regulatory apparatus of government, an apparatus that, as it turns out, was the only thing opposing the economic cataclysm we today face. Thank you so much, Republican Revolution.
The interests of business have never taken a backseat since. In the financial and economic areas of government, since Reagan the regulatory climate was scaled back, first to the dimensions of a token and then to that of a joke — a joke on us with a punchline being told today. What else but a joke would you call it when the SEC was handed with a straight face over to Harvey Pitt, attorney for the accounting industry trade association? How much gain to one’s career would a bureaucrat working in this regulatory agency expect if they turned their regulatory attention to wild book-cooking on Wall Street when the very white knight of the book-cooking industry was his boss? If you arrive at the answer “little to none”, good for you.
And what about the Treasury Department? What do you think the chances are that once that department was given by Bush II to former Goldman Sachs CEO Henry Paulson that Wall Street’s investment banking houses would receive any negative attention from DC? Even as they one after another invented new credit derivative instruments on top of a corrupt housing bubble pushing a middle-class dream to people whose barely middle-class wages were being destroyed at the same time? What chance would there be of anyone with any pull in Washington to rise up and slap these people for participating systemically in supremely reckless, if temporarily profitable gambling?
Zero is the answer. And zero is what we got in terms of protection from these runaway capitalists as they spiraled the credit problem into what we see today, and what we will see tomorrow.
“Government is the problem”, we were told. So seductive was that lie, it took nearly thirty years to make the truth crystal clear: not enough government is a much bigger problem.
The philosophy of government that disdains government is never again to be trusted. Thirty years of that Republican philosophy has led directly to the disgusting spectacle we see today of its own greatest practitioners, of free-market fundamentalists now squirming to Congress with their hands out, sob stories much weaker than those you might read on the cardboard sign of a guy panhandling on a Lake Shore Drive exit ramp. Two weeks ago, these captains of the financial industry would lecture on the “moral hazard” of tinkering with the almighty free market – while the whole time the cynical players knew that things that can’t last forever don’t – and that some of their own frat brothers were in Government and would give them a hand when the time came.
That time is now.
Never trust these cynical people again. Don’t trust the Gingriches, the Norquists, the tin-pot Abramhoffs and DeLays. the Frists and the Dobsons, the Bernankes and the Paulsons. Don’t trust the McCains and Bushes, the Hannitys and the Limbaughs, the Malkins and the Medveds.
These people gave us a new 1930s. It’s time to make them answer for what they’ve done.