Wall Street……………………….Henry Adams
Yes, it is certainly easy to be a Monday morning quarterback once the game is over. But the game is far from over for the Democrats and Obama. Brown’s victory in Massachusetts—won in part because Obama supporters sat out the election or actually voted for Brown because they were upset about Obama not being progressive enough on health care—is indeed the proverbial wake-up call. Obama now knows that his administration is going to have to take a more political turn. What does this mean? Harnessing the populism that propelled Brown and Obama into office. Of course those who supported them aren’t all the same populists, but there is an overlap.
People feel ripped off and they should. They have been ripped off by Wall Street and now they are worried that the government will rip them off with new health care legislation. That the former is true, and the latter is not, makes little difference to current politics. What should have happened, and what now must happen, is that Obama must harness the outrage against Wall Street into outrage about how the insurance companies have ripped people off and will continue to do so unless stopped. This doesn’t require that Obama become a flaming radical. But it does require that he worry less about what the big bad banking system will do to us if we don’t cater to its wishes.
American capitalism will not go down the tubes if we make prudent decisions about what banks can and can not invest in. It’s now clear, once again, that commercial banks that take deposits should not become investment houses. This was the law of the land for more than sixty years until Republican Senator Gramm, and Republican Representatives Leach and Bliley, helped change things in 1999 with the the Gramm-Leach-Bliley Act. While there are of course numerous reasons for why stocks are not worth any more today than they were back in 1999, it does seem that GLB’s legislation has not helped to protect us from bad times. As a matter of fact, it undoubtedly was a major factor in the banking crisis.
No doubt Obama was worried that if he didn’t cater to the banks the American economy would recover more slowly. But the political risk, and the risk to our economy in the future, is simply too great now not to harness the populist sentiment in the country. And you know Americans have had a long distrust of bankers. Writing at the turn of the twentieth-century about his reaction to bankers in the 1860’s, Henry Adams, grandson and great-grandson of presidents, said the following. (He speaks about himself in the third person.)
He [McCulloch] was a banker, and towards bankers Adams felt the narrow prejudice which the serf feels to his overseer; for he knew he must obey, and he knew that the helpless showed only their helplessness when they tempered obedience by mockery. The Education of Henry Adams, Chapter XVI
So enough jokes on late night TV and more teeth in actual measures to reign in the fat cats, especially since the Supreme Court has decided to make money the undeniable king of our future elections by unleashing corporate wealth to finance elections.
And Adams would have a warning for Obama as he proceeds.
The most troublesome task of a reform President was that of bringing the Senate back to decency. The Education of Henry Adams, Chapter XVII