Lost in the babble about the Wall Street rubble was last week’s provocative piece on Bill Moyers Journal. Beyond its hackneyed title, “Following the Money,” it gets to the heart of the global financial meltdown (video, transcript).
Last night’s Frontline episode, “Inside the Meltdown,” was an interesting recap about last fall’s crash, but it didn’t make a point that we hadn’t heard before, and it focused on the agony felt by Hank Paulson. Moyers’s February 13 chat with economist Simon Johnson, also on PBS, got far less press but delivered much more meat.
Johnson’s point: Bailing out the banks by yielding to ex-banker Paulson’s pals, is actually bailing out America’s oligarchs, and it’s a bad idea. A better idea? Bust ’em up.
Moyers pointed out that the Obama Administration is using a “velvet glove” in its handling of the banks, that (as previously reported by the Times and Wall Street Journal), Barack Obama‘s advisers David Axelrod and Rahm Emanuel wanted to take a stronger stand against the banking industry, instead of trying to rescue it at the country’s expense. In the end, Treasury Secretary Tim Geithner won that internal argument, and we’re going to keep paying to rescue these oligarchs.
Here’s an excerpt of the Moyers/Johnson conversation:
SIMON JOHNSON: I think I’m signaling something a little bit shocking to Americans, and to myself, actually. Which is the situation we find ourselves in at this moment, this week, is very strongly reminiscent of the situations we’ve seen many times in other places.
But they’re places we don’t like to think of ourselves as being similar to. They’re emerging markets. It’s Russia or Indonesia or a Thailand type situation, or Korea. That’s not comfortable. America is different. America is special. America is rich. And, yet, we’ve somehow find ourselves in the grip of the same sort of crisis and the same sort of oligarchs.
BILL MOYERS: Oligarchy is an un-American term, as you know. It means a government by a small number of people. We don’t like to think of ourselves that way.
Don’t think of Johnson as some sort of anti-capitalist bomb-thrower; he’s the former chief economist at the International Monetary Fund and now teaches at MIT’s Sloan School of Management.
Despite his mainstream cred, practically all major U.S. media outlets have ignored his point. Among the few sites that have taken notice are ConsortiumNews.com (see Michael Winship‘s “The Oligarchy’s Bailout Ball”) and TPM Cafe (see Johnson’s own February 12 item, “Robbery Note: From The Banking Oligarchs This Morning”).
But what exactly is Johnson’s alternative to the present scheme of propping up the oligarchs? Trust-busting. He tells Moyers:
The structure or banking system, the concentration of power in big financial institutions, has to change. There’s a lot of appeal to FDR and what he did in the Great Depression.
I would go back to Teddy Roosevelt 100 years ago, and think about trust busting. OK? Now, the banks don’t violate existing antitrust laws. That’s ’cause our antitrust laws are 100 years old and need to be changed, okay? We need to break them up for exactly the same reason that Rockefeller and the oil interests, Standard Oil, at the end of the 19th century, was too powerful, economically and politically. And [Standard Oil] had to be broken up. And breaking it up was the right thing to do. That’s where we are with the banks today.