So I was watching a CNN panel today and the subject up for debate was something along the lines of, "Is Obama shedding constituents? Critics say he's abandoned Wall Street."
My first reaction was, "Wait, critics are saying this? Are you sure that wasn't what his allies said?" But no -- I actually had to listen to a debate over whether Obama was making a huge political mistake by "abandoning" his bestest pals in the world at the megabanks.* You know, the guys whose greed and irresponsibility caused the worst financial collapse since the Great Depression.
(*Obama hasn't actually "abandoned" the banks in the least, but that's a story for another post.)
And then I thought, "Why the hell are we the only culture in the whole goldurned world where it's seen as a political risk to abandon the people who are responsible for causing widespread economic hardship?" And all this got me thinking about the super-weird "We-Must-Be-Nice-to-Rich-People" doctrine that has run through our national discourse since the 1980s.
You see, there was a time when American politicians could say things such as "It is to be regretted that the rich and powerful too often bend the acts of government to their selfish purposes" (Andrew Jackson) and "Too much cannot be said against the men of wealth who sacrifice everything to getting wealth" (Teddy Roosevelt) and "We had to struggle with the old enemies of peace — business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering... They are unanimous in their hate for me — and I welcome their hatred" (FDR) and no one thought anything of it. Indeed, as Simon Johnson and James Kwak show in their excellent book 13 Bankers, hating on financial oligarchs is as American as hating on soccer, dating all the way back to Thomas Jefferson.
But starting in the 1980s, Ronald Reagan began popularizing Randroid mythology about how rich people were necessarily our betters because they were the only ones capable of "creating wealth" in the economy.
(For some reason, Big Ron forgot to mention they were also capable of creating multi-trillion-dollar housing bubbles, overpriced Pets.com stock certificates and made-to-fail synthetic interest rate swaps that bankrupt entire counties.)
And ever since then, every Democratic president and politician has had to reassure members of our elite media that he's just as capable of kissing rich-guy keisters as the Republicans. If you want a prime example of this dynamic at work, check out this Washington Post piece (via Harper's) that places giant red warning lights over Paul Krugman's views but that quotes some sleazeball Wall Streeter as though he were a perfectly objective analyst. First, his take on Krugman:
When you read Krugman on economics, you need to read him through a filter. He believes that the $787 billion government stimulus approved last year was not enough to really kick-start the economy and that much more is needed. You can correctly read many of his columns -- including this one -- as arguments for more taxpayer-funded stimulus. So just know that.
And now, the equity strategist:
I started with Peter Boockvar, equity strategist at Miller Tabak.
My e-mail was short: "Double-dip or slowdown?"
His response was equally abrupt: "Depends on who wins Nov. elections and what taxes get hiked in 2011."
The tax cuts enacted by President George W. Bush expire at the end of this year. President Obama has proposed extending those cuts -- except for families that make more than $250,000 a year. If Republicans win Congress in November, it's a good bet that the wealthiest Americans will keep their tax cuts. If the Democrats hold the Hill, it's unlikely.
"Our fragile economy CANNOT handle any tax hikes whatsoever, particularly on capital and the income of those who invest, save and spend the most," Boockvar wrote, meaning those American families that make more than $250,000 a year. The all-caps are his, but the feeling is shared by many.
Now, I'm of the general mindset that it's daft to raise taxes or cut spending in the middle of a severe economic downturn. But at the same time, note Boockvar's emphasis on whose taxes we should really be opposed to raising: "Those who invest, save and spend the most." In other words, people like Peter Boockvar.
I personally find it highly unlikely that if Mr. Boockvar's taxes were to rise back to the level of the 1990s that he'd suddenly lose all will to work and would instead spend his remaining days sipping Purple Drank outside his local 7-11. People like this are generally addicted to making money and they'd sell penny stocks and junk bonds to special needs children if they thought they could get away with it. What Mr. Boockvar would have written if he were being honest was, "I've already put off buying cocaine and pricey call girls enough during this recession and I CANNOT handle any tax hikes whatsoever."
And that's where we are. Despite the fact that our banking oligarchs destroyed the entire financial system and were only saved from homelessness by the United States government, they still must be treated as "special" people who are "the only ones" capable of creating new jobs for the lesser people. It'd be nice if this particularly insidious piece of mythology were to be sent to the ashcan of history, but methinks it's going to take some time...