Is the federal government at fault for the current lousy economy? Absolutely.
Are we still suffering from the excesses of Wall Street? Yup.
In fact Wall Street (and its foreign compatriots) and Washington (and other capitols) were co-conspirators in tanking the economies of much of the developed world. Thanks to this not-so-grand alliance, bankers got to kill the goose and keep the golden egg – subject, of course, to continued campaign contributions.
The Occupiers of almost anything and the Tea Partiers should be listening to each other. As the brilliant Venn diagram below from a post by James Sinclair shows, the two groups are looking at different views of the same monster: a hybrid of giant corporations and giant government supporting each other's aggrandizement at our expense. (hat tip to Art Woolf writing on VermontTiger for posting this).
It may be that the people on the extremes of both of these movements will never recognize that they are looking at two aspects of the same problem. But the 99.999% of us who are not on either extreme can learn by seeing the problem is really right in the middle of the Venn diagram above. The problem isn't solved by giving more power to a government (and Federal Reserve) which will use that power to entrench those who are "too big to fail." The problem isn't solved by holding investment banks harmless from their own reckless behavior and allowing them to continue to shower riches on leaders who led them to disaster (so long as they continue their campaign contributions). Much of our problem CAN be solved by teasing apart the too cozy relationship between big government and big corporations – particularly big financial corporations – and putting both corporations and government back in their proper role.
Unfortunately, at the moment, all leading candidates for President of the United States from both parties are actually advocates for extending the status quo. They justify their positions – and placate their followers – by adopting the language of either the Tea Party or the Occupiers, which conveniently allows them to ignore the problem right in the middle of the diagram. Both Republicans and Democrats talk the talk of reform and change; neither Democrats nor Republicans walk the walk. No wonder people are mad.
Take the Republican candidates in the last debate: they talk the talk of free enterprise. To a man (and a woman) they all insisted that Washington alone was responsible for the housing boom and collapse and the lingering malaise that has followed. Strangely for supposed free market adherents, they don't think that investment banks bear any responsibility for reckless securitization of worthless mortgages or looting the investment pool with absurd executive compensation. Most of them supported TARP as necessary without making the obvious point that institutions which are bailed out with public money have lost their claim to immunity from public scrutiny and regulation. The poor banks were victims, according to the candidates, of bad examples from Fannie Mae and Freddie Mac (it's all the fault of the neighborhood) and the poorly thought out quotas of the Community Reinvestment Act (it's all the fault of their upbringing). Gimme a break.
Take President Obama: he talks the talk of economic equality. But he eagerly pursued the Bush-administration's policy of using public money to protect the accumulated wealth of investment bankers from a well-deserved correction, which would have dissolved (and effectively redistributed) much of it. He appointed TARP-architect Timothy Geithner Treasury Secretary and embraced the bank-protecting policies of Bailout Ben Bernanke. Geithner is still traveling to Europe – on our behalf – and urging European governments to protect their banks from the consequences of lending money to profligate governments (at very attractive rates). The Head of Obama's Jobs Council is Jeffrey Immelt, Chairman and CEO of GE, a company which got bailed out because of its banking activities, manages to pay no federal taxes on huge net income, and whines that it can't compete in manufacturing because it doesn't get enough subsidies. The too-big-to-fail banks have gotten bigger on Obama's watch and the bank reform bill he signed effectively enshrines their special status (and strengthens the alliance between big government and big banks). Gimme a break.
No wonder people are mad. But, unlike the brave participants in the Arab Spring, we have a vote. We have a right to protest, of course, and protest we will when not listened to (and we don't have to risk our lives to do so). But we have a responsibility to vote – especially in primaries. The Tea Party, whether you agree with its goals or not, has set a good example – which Occupiers would do well to heed – of how to make change in a democracy. The Occupiers have done a good job of reemphasizing the absurdity and essential unfairness of bailing out the very rich in the name of free enterprise.
James Sinclair has a new post today, "Bringing America Together, One Venn Diagram at a Time" in which he justly boasts of the attention his Venn diagram has gotten from all over the political spectrum. That's a very good sign; now we need some candidates who both talk the talk and walk the walk and understand that a successful free enterprise system requires solving the problem at the middle of the Venn diagram rather than railing at the symptoms from the left or the right.