Bankster Plundering Doesn't End With Bush's Banishment

Earlier today we used the collapse of prices on the high end of the blue chip international art market as a metaphor of (and harbinger of) bad economic times ahead. Since then the Commerce Department released another economic bombshell that doesn't deal with Francis Bacon's edgy paintings or Damien Hirst's even edgier... concoctions. Alcoa lost $1.19 billion in the 4th quarter as demand for aluminum plunged as fast as demand for Hirst's stuffed cows and pricey shark sculptures. "Alcoa is a harbinger of things to come,'' said Jeff Buetow, senior portfolio manager at Portfolio Management Consultants. ''It was a horrible report.''

And the stock market headed down... again. The trade deficit falling to its lowest levels in 5 years isn't a good thing for people who worry about corporate profits. And it goes beyond a drop in the demand for oil. That's just one of many symptoms of a slowing world economy. Before you start celebrating that demand for imports has dropped-- and start dreaming of the end of WalMart-- keep in mind that trade is a two-way street. "[I]nvestors are more concerned by the waning appeal of American products overseas, as economies around the world suffer. The fear is that as companies struggle with falling global demand, it will be more difficult for the economy to rebound."

And wouldn't you know-- up pops the chief of the banksters' protection racket, Ben Bernanke, to whine that Obama's plans to put money into the hands of average Americans through his stimulus package won't do the trick. More money for the greedy, crooked banksters who dragged the economy into the toilet is just what the doctor ordered. How much of the billions the government doled out to CitiGroup and criminal gang that runs Morgan Stanley will go into "restructuring costs" (fat fees for fat lawyers and consultants and bankster executives) as those two companies merge their brokerage operations. [Note: CitiGroup CEO Charles Prince managed to make off with $100 million as he was thrown overboard for ruining that company, just as Merrill Lynch CEO Stanley O'Neill got away with $161 million in his bulging pockets after causing his company to lose $8.4 billion.] Since virtually none of the taxpayer dollars the Bush Regime has doled out to these crooks has gone to ease up the credit market-- the banksters refuse to lend to even the most creditworthy home buyers, for example-- it has to be going somewhere. And that somewhere, unregulated and badly monitored-- with no fear of accountability-- will always find its way into the pockets of the fattest and greediest and most criminally-minded.

“Fiscal actions are unlikely to promote a lasting recovery unless they are accompanied by strong measures to further stabilize and strengthen the financial system,” Bernanke warned today. “A modern economy cannot grow if its financial system is not operating effectively." Reregulation, accountability, long, long, long prison sentences sounds like just the thing to get that house back in order.

The Party of Greed and Selfishness and its hack propagandists may be rushing around trying to claim the New Deal failed, but no one who isn't a Rush Limbaugh/Fox TV addict or a multimillionaire who would rather lose half his investments in an economic collapse than pay a fair share of taxes, believes that nonsense.

On Christmas Eve, the conservative pundit Monica Crowley argued on Fox News that instead of rescuing America from the Great Depression, Franklin Roosevelt’s spending on public works made it worse. She insisted that this bizarre claim was confirmed by “all kinds of studies and academic work.”

The show’s host backed her up. “Yes,” said Gregg Jarrett, “I think historians pretty much agree on that.” In the same vein, a recent Wall Street Journal opinion piece said F.D.R. helped turn “a panic into the worst depression of modern times.” Now, as Congress begins to debate President-elect Barack Obama’s ambitious economic stimulus plan, this anti-New Deal talking point is popping up all over.

Conservatives have railed against the New Deal from the start. In 1934, H. L. Mencken was already decrying it as “a saturnalia of expropriation and waste.” When F.D.R. ran for re-election in 1936, a headline in William Randolph Hearst’s newspapers insisted that “Moscow Backs Roosevelt.”

But Americans were not fooled. They knew F.D.R. was on their side in a way that Herbert Hoover and his fellow free-marketers hadn’t been. They could see first-hand the good that Roosevelt’s jobs programs were doing for the Depression’s victims and the slow but unmistakable improvements in the economy.

In the 1934 midterm elections, the voters delivered their first verdict on the New Deal, expanding the Democrats’ margins in Congress. In 1936, F.D.R. won in a bigger landslide than he had four years earlier. By 1940, the Republican nominee, Wendell Willkie, was supporting much of Roosevelt’s social welfare and regulatory regime.

Anti-New Deal rhetoric has never disappeared from American political life. When Barry Goldwater ran for president in 1964, he attacked President Dwight Eisenhower for having presided over a “dime store New Deal.” But in recent years, the attacks have heated up.

At the start of the Bush administration, conservatives talked openly about rolling back the New Deal. They were trying to unravel the regulatory state, including protections for workers, consumers and investors. They were also promoting a favorite cause of Wall Street’s: privatizing Social Security, the crown jewel of the New Deal.

These days the public is in no mood, given the high costs of deregulation in the mortgage industry and the Bernard Madoff scandal, for more talk about dismantling regulations and federal oversight. But today, the new focus is Mr. Obama’s stimulus package. If F.D.R.’s New Deal spending made things worse, it follows that the Obama administration should not make the same mistake.

The anti-New Deal line is wrong as a matter of economics. F.D.R.’s spending programs did help the economy and created millions of new jobs. The problem, we now know, is not that F.D.R. spent too much priming the pump, but rather that he spent too little. It was his decision to cut back on spending on New Deal programs that brought about a nasty recession in 1937-38.