[IWE] TomDispatch on Fear and Loathing

[Ashton Brown]

http://tomdispatch.com/post/174984/steve_fraser_wall_street_and_the_return_of_the_repressed

A mini-history of US capitalism -- for our Times;
/Madame/ /Thérèse/ /Defarge:  /Front and center!


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Tomgram: Steve Fraser, Wall Street and the Return of the Repressed

Think of this as the month when Fannie and Freddie entered everyday 
speech as something other than friendly names, when Americans realized 
that WaMu wasn't an over-performing Orca at SeaWorld but a massive 
failing savings bank, and that Wachovia wasn't a watch brand, but a 
finance group, as well as the fourth largest bank holding company in the 
U.S.

[. . .]

The Specter of Wall Street
Wall Street's Comeback as the Place Americans Love to Hate
By Steve Fraser

Wall Street sits at the eye of a political hurricane. Its enemies 
converge from every point on the compass. What a stunning turn of events.

For well more than half a century Wall Street has enjoyed a remarkable 
political immunity, but matters were not always like that. Now, with 
history marching forward in seven league boots, we are about to revisit 
a time when the Street functioned as the country's lightning rod, 
attracting its deepest animosities and most passionate desires for 
economic justice and democracy.

For the better part of a century, from the 1870s through the tumultuous 
years of the Great Depression and the New Deal, the specter of Wall 
Street haunted the popular political imagination. For Populists it was 
the "Great Satan," its stranglehold over the country's credit system 
being held responsible for driving the family farmer to the edge of 
extinction and beyond.

[. . .]

Before the country could catch its breath, matters got really serious 
with the popping of the dot.com bubble, Enronization, and finally, of 
course, our current catastrophe. Through all of this -- until now -- the 
political fallout was virtually nil. Sarbanes-Oxely, the act passed by 
Congress in 2002 in response to an avalanche of Wall Street and 
corporate scandals that began with Enron, was a remarkably tepid piece 
of reformist legislation, given the scale of the debauch; yet, within 
moments of its passage, howls of protest could be heard from our 
offended friends on the Street, grievous complaints treated with all due 
seriousness by the media, somehow still infatuated with Wall Street's 
rain-makers.

[. . .]

The Return of the Repressed

No longer. There is a new agenda in America and it calls for 
re-regulation, recovery, and retribution. It is enough to make one gasp 
in disbelief, but nowadays there is practically universal agreement that 
the financial sector must be more or less rigorously reined in and 
regulated. (Hedge fund managers and some other hold-outs demur, of 
course.) Yet mere weeks ago, "government regulation" was still a phrase 
to be avoided like the plague, ranking right up there with "liberal" in 
the vocabulary of political obloquy.

[. . .]

The meltdown of the financial system has called into question American 
economic behavior over the last generation. Wall Street has come to 
stand for a paper economy that produces nothing useful, nothing tangible 
the way it once did. It has frittered away resources on embarrassingly 
grotesque forms of conspicuous consumption and patently non-productive 
forms of investment. It has left the real economy underdeveloped, its 
infrastructure rotting away in plain sight, its wealth fractured by 
unprecedented inequalities, dependent on sweated labor, and its 
industries, across a broad spectrum, technologically second-rate. It has 
left the country lost in a sea of debt and headed for an abyss of 
unemployment, bankruptcy, and evictions. Somehow regulation -- although 
not all by itself -- must address this, or so, for the first time in a 
long while, large numbers of Americans hope and desire.

People are now looking to the government -- that ogre of the dying old 
order -- as the only power resourceful and strong enough to direct the 
flow of capital where it's needed rather than where the discredited 
overlords of the financial system think may be most profitable. 
Conservatives, especially those who rightly balk at the mega-bailout now 
in the works as unfair to the American taxpayer, decry what they call 
financial socialism. But what then?

The Meaning of Retribution

As it did in 1929, the free market has failed beyond tolerance. 
Overwhelming popular sentiment (which each new poll registers with added 
vehemence) may, sooner or later, bring not only a full recognition of 
just how wrong-headed the country has been for how long, but how much in 
need it is of fresh institutions. New forms of public authority, closely 
overseen by the mechanisms of democracy rather than turned over to some 
autocrat on leave from his day job as an investment banker, might have a 
chance of doing what was once unthinkable: de-sanctifying private 
property and compelling it to perform in the general interest when its 
private misuse has placed us all in peril. The New Deal ventured in that 
direction. We need to venture further.

[. . .]

Many will seek retribution as well, just as Americans used to do in the 
decades before the Great Depression. How could they not? That's what 
happens when simple rage turns into moral outrage, when people are 
finally called to account for the damage they've done. The emotion fuels 
a chemical reaction even now at work in our cultural innards. It may 
prove the catalyst for an intellectual and emotional explosion that 
someday will add up to a genuine break with the past. It did so back in 
1929.

However justifiable, cutting CEOs loose from the life-support systems 
they've used to drain corporate treasuries for decades is small 
potatoes. Do it, but let's hope the instinct for retribution will be 
turned to better purposes -- to, in fact, reintroducing into our 
political life and our economic behavior an ethos of social solidarity. 
Let's see where that might take us. We could do much worse.

Steve Fraser is the co-director of the American Empire Project at 
Metropolitan Books and the author, most recently, of Wall Street: 
America's Dream Palace (Yale University Press).

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