They've Chosen 2 Candidates Who've Made It Through The Money Primary & That's Who We Get To Take Our Pick From

Above is not a scene from director Benoît Jacquot's Farewell, My Queen, a movie I saw Friday. (It comes out next month, on Bastille Day.) If I can find a clip on YouTube, I'll append it to the bottom of this post; yes, I found one. I don't want to talk about the lurid inside story of the romance between Marie-Antoinette and Gabrielle de Polastron, duchesse de Polignac or even about the interesting contemplations on the end of the world. Instead, I just brought it up because it takes place in Versailles between July 14, 1789 (the day the Bastille was stormed) and July 17, when Louis XVI was summoned to Paris by the new mayor Jean-Sylvain Bailly-- his predecessor, Jacques de Flesselles, having had his severed head paraded around Paris on a pike 3 days before. Louis was forced to reinstate Jacques Necker as finance minister and to wear a tricolore cockade, symbol of the Revolution. That was the end of the absolute monarchy and of the Ancien Régime itself. Conservatives have been trying to turn back the clock ever since.

Last week Bill Moyers and Thomas Frank discussed the huge opportunity a corporately dominated Supreme Court has handed the right with Citizens United. The video above is a short essay by Moyers on the same topic. And, as you can guess, it's what made me think of the last days of the Ancien Régime, the rats fleeing the palace at Versailles, heads on pikes, the moral turpitude and disgraceful feelings of entitlement of the "nobility." As buoyed as I was last week by the 110 year prison sentence-- with no chance of parole-- for billionaire financial predator "Sir" Allen Stanford, I'm still dismayed that significant numbers of voters outside of the hopeless South could actually be contemplating reinstating the Ancien Régime by electing Mitt Romney.

BILL MOYERS: But recently Barack Obama sent his campaign manager, Jim Messina, to New York to assure the financial services industry, Wall Street, that when they heard Barack Obama talk populist rhetoric on the campaign trail he wasn't going to demonize them.

THOMAS FRANK: He wasn't going to demonize Wall Street? Oh no. This is the amazing thing to me, that we have just come through this sort of extraordinary real world demonstration of the folly of our financial system, of all the stuff that we've been doing, the deregulation of the last 30 years, the setup of the Federal Reserve system, however you want to put it, it has all failed us.

And we haven't been able to rise to the challenge and do anything, you know, to fix it in a really structural way like they did in the 1930s. We haven't done that. And Barack Obama who had that opportunity and had both houses of Congress and had, I mean, the world at his feet in 2008 could have gone in any direction he chose, instead chose to basically follow in the footsteps of the sort of tepid centrist Democrats before him, you know, to do little regulatory things here and there, to use some sort of mean-sounding rhetoric at times, but to not really change anything.

And the failure is the Democrats. Democratic Party has by and large not risen to the challenge. I mean, this is not the party of Franklin Roosevelt, it's not the party of Lyndon Johnson. This is a part that can't, you know--

BILL MOYERS: And Barack Obama for all of his virtues and intelligence is not a man of the people.

THOMAS FRANK: No, he's not. And he also, he's a man of academia. He's a man who believes in experts and expertise as we've seen in many, many, many, all the different sort of arenas of his presidency whether you're talking about the war in Afghanistan or whether you're talking about the financial crisis.

This is a man who defers to experts, believes in expertise. He does not have much sympathy for, say the labor movement. He can't go out there and tell you why, say the regulatory agencies failed. He can't, it doesn't make sense to him. He can't talk about these things that everybody wants to know about.

Now, on the other side you've got a movement, the conservative movement, a right wing populist movement that talks a very good game, that speaks to people's anger and that offers them a kind of idealism, a kind of hope that perversely draws on a lot of the rhetoric of the 1930s and models itself after a lot of the movements of the 1930s.

And what they offer, this is interesting. What they offer, the dream, the sort of utopia, the vision that they have for the future of our country is pure free markets. And they say this all the time. It's not me making this up. You go to any Tea Party rally--

BILL MOYERS: That's right. We've covered them. You're exactly right.

THOMAS FRANK: --and they talk about this. If we can just get government out of the way and we can reach out, you know, and--

BILL MOYERS: But getting government out of the way is what helped bring down the economy--

THOMAS FRANK: Of course, but they say the only problem is that government, you know, yes, we deregulated all that stuff, we deregulated all through those years, but we didn't go far enough. And so you can say to them, "Well, look at the record of George W. Bush, the champion deregulator. Look at all the amazing things that he did to set Wall Street loose to deregulate."

And they're like, "Well, George W. Bush was not a real conservative." They say this all the time. It's very easy for them to, you know, because they're such purists and such ideologues to excommunicate someone like George W. Bush from their movement and say, "Well, he wasn't pure enough." Ten years ago they had little statues of him on their desks, you know. But how he's thrown out of the movement, "Not pure enough" --

BILL MOYERS: That's their idealism?

THOMAS FRANK: -- because of the bailouts.

BILL MOYERS: Their idealism is their unblinking faith in the free market?

THOMAS FRANK: Yes, and this is an idea that when I first started writing about it was something that you only saw from the Jamie Dimons of the world.

I called it market populism. It was something that you saw on CNBC in the early days, in the stock market boom of the '90s. You would see it in, like, personal investment books and I made fun of it. Today it is everywhere. It is epidemic, and it's not just the high and the mighty that believe this stuff now, that believe that markets are both a natural phenomenon and a democratic phenomenon. This is average people all across America that believe this.

BILL MOYERS: But you're a historian. Why has this happened?

THOMAS FRANK: Our anger turned from Wall Street to Washington, and it happened in a very short period of time. If you remember back to 2009 when the bailouts were going on the sort of high point of public anger came when AIG, remember these guys? This is a company that should not exist any longer.

These are the people that invented, they didn't invent the credit default swap, but they sort of took it to its logical extreme. And these guys were not only bailed out, they were handing out bonuses to the executives in the division that had invented the credit default swap and had done all these crazy things. And the public was so angry. This is in March of '09. I remember the feeling.

BILL MOYERS: Yeah, I do to. I was reporting on it.

THOMAS FRANK: People were furious. And then all of a sudden the direction changed and it went away from AIG and over to Washington. And we decided that the real villains in all of this was Washington. And--

BILL MOYERS: But Tom, why wouldn't you feel that way if you saw how the banking committee is dominated by money from Wall Street, if you see the revolving door you talked about, if you know that 18 members of the Federal Reserve Board of Directors benefiting from the bailout, if you see the deregulators helping Wall Street despite all this? Why wouldn't your anger be directed toward Washington?

THOMAS FRANK: They certainly deserve a really, really big helping of public anger. And there's a lot of terms, look, I imagine I'm going to make fun of the Tea Party movement, and that’s certainly what Pity the Billionaire is about, but let's give them some concessions right off the bat.

When they talk about crony capitalism they're right. When they talk about what you just said, all these interconnections between the banks and the legislators, they're right. When they talk about, they use this term, “the ruling class,” that term is totally right on the money. That's a term that we should be throwing around these days. These--

BILL MOYERS: But the ruling class is--

THOMAS FRANK: --people are, they are in bed with each other, you know.

BILL MOYERS: But the ruling class is funding their movement, the Koch brothers, the--

THOMAS FRANK: Exactly, this is the--

BILL MOYERS: --big corporations, Wisconsin.

THOMAS FRANK: -- this is the funny thing that instead of saying, instead of looking at the present situation and saying the regulatory system broke down, we need stricter oversight on these people, we need a political, you know, we need Washington to at least be strong enough and smart enough to supervise these guys and make sure this never happens again which was the response that we had in the 1930s.

Their response is, "It's impossible to regulate these guys." What we have to strive for instead is some kind of pure free market system, so get government out of the way all together. Stop trying to regulate them. And you see the kind of people who've been elected, as a result of this populist anger out there in the country, get in office and immediately go to war against the Securities and Exchange Commission that's supposed to regulate Wall Street.

They want to hammer those guys into the ground. They go after the, what is the new, the only sort of substantial new regulatory agency, the Consumer Financial Protection Bureau, they go after those guys. They've tried to de-fund them. You know, they wanted to make sure Elizabeth Warren would not be chairman of it.

They've gone to war against regulation, against the very idea of government oversight of the financial markets. This is fascinating. How can you react to, you know, three decades of financial deregulation leads to this collapse, this tremendous disaster and our response as a nation has been to say, "Well, we need more of that. We need to deregulate more."

BILL MOYERS: Is one of the reasons money in politics, both of us know there's nothing new about money in politics in American history. What's the difference now?

THOMAS FRANK: Well, there's two things. One is the sheer size of it. We've really turned it loose. The Citizens United decision, we're going to see a wave of money like we've never seen before. The 2010 midterm elections dwarfed what they call independent expenditures which is expenditures by PACs and super PACs were two times what they were in 2008. So there's that.

The other thing is that we are so blasé about the money. It doesn't shock us anymore. You know, and there was a time when, you know, John McCain is a Republican, was offended by money in politics. Today, you know, we've all sort of made our peace with it.

...THOMAS FRANK: No doubt about it. For a long time the people have been talking about the conservative movement and their effort to develop some kind of permanent lock on power. And I think that Citizens United might be the thing that actually delivers that not because it's going to give Republicans per se a lock on power or give them a permanent majority or anything like that. You're still going to have a two party system no matter what happens, but it will tilt our politics in a certain direction. It will draw both parties by a sort of force of gravity in a certain direction. Before you can even, when you put such a price tag on elected office, and this has been going on for years, but today it's way up there in the hundreds and hundreds and hundreds of millions of dollars to run for the presidency.

And who knows how many millions to run for the United States Senate and a couple million to run for the House of Representatives. When you put a price tag like that on political office you automatically rule out lots of people and lots of ideas from the competition.

If you have to be able to reach out to the billionaire community and make your case to the billionaire community even before you begin, even before you start running for office, you know, automatically a lot of ideas and a lot of ideas that are very traditional, very American, you know, red, white and blue ideas are automatically off the table. You have to be able to please that class of donors before you even start.

BILL MOYERS: So our choices are narrowed to candidates favored by the rich?

THOMAS FRANK: The choices have already been made for us instead of, you know, 20 candidates out there, they've chosen two candidates who've made it through the money primary and that's who we get to take our pick from.

Class warriors ready to kick your ass, Jamie & Steve

Think about that next time you wonder why I hate Steve Israel and Debbie Wasserman Schultz and the DCCC so much. Vive la France! Vive la révolution! As Matt Taibbi pointed out in the latest edition of Rolling Stone senators-- from both parties-- groveled and embarrassed themselves at the Jamie Dimon hearings.

If not for Oregon’s Jeff Merkley, who was the only senator who understood the importance of taking the right tone with Dimon, the hearing would have been a total fiasco. Most of the rest of the senators not only supplicated before the blowdried banker like love-struck schoolgirls or hotel bellhops, they also almost all revealed themselves to be total ignoramuses with no grasp of the material they were supposed to be investigating.

That most of them had absolutely no conception of even the basics of the derivatives market was obvious. But what was even more amazing was that several of them had serious trouble even reading aloud the questions their more learned staffers prepared for them. Many seemed to be reading their own questions for the first time.

...Oregon's Merkley leads off his questions by asking Dimon if his company would have gone out of business in 2008 without TARP and other forms of federal assistance, including monies from the AIG bailout.

Dimon snaps: "You are misinformed, and that misinformation is causing a lot of the problems we're having today." He then trots out the well-worn rhetorical line, often used by TBTF companies, that Chase never needed aid, and never took aid from the Fed except when it was asked to. "They said, 'Please use these facilities, because it makes it easier for other people...'"

Note: if you include TARP, the Fed subsidies for Chase's acquisitions of Bear Stearns and Washington Mutual, the AIG bailout, and the Fed's emergency lending program, that would mean that Chase has been "asked" to accept, against its will, nearly $600 billion since the beginning of 2008. Merkley begins to note, sarcastically: "We would all like to be 'asked ....'"

But Dimon doesn't let him finish. "And we were not bailed out by AIG," he snaps, feverishly jotting notes in between sharp phrases. "We would have had a direct loss of about a billion or two billion dollars if AIG went down. And we would have been okay."

"Well, then," Merkley begins to say, "you have a difference of opinion with many analysts of the situation who thought the AIG bailout did benefit you enormously. And I'm not going to argue –"

"They're wrong," snaps Dimon, who wants to finish his point, and tries to talk over Merkley’s question."They're factually wrong. They're –"

Merkley, God bless him, points at Dimon and says, "Sir, this is not your hearing. You’re here to answer questions. And I only have five minutes."

Right on! It’s taken over two hours for someone to explain to Dimon that this is the floor of the senate, not a cocktail reception at Davos. That he's a witness here, not the boss.

From there, Merkley gets right to the heart of the problem with the hearing. Dimon had been allowed to come to the Hill and rail against the Volcker rule, arguing to one wide-eyed, gushing senator after another that putting up firewalls would prevent good bankers like himself from stoking the engine of the American economy by vigorously participating in the capital markets.

Merkley, who offered the key Volcker rule amendment in the Dodd-Frank negotiations, was the only member who pointed out the lunacy of this argument. Nobody is saying participation in the capital markets should be cut back; nobody’s trying to ban investment banking or hedge funds. The only thing anyone is suggesting is that you shouldn’t be able to bankroll a risky hedge fund with federally-insured money.

You can either be a commercial bank, with all the federal support that entails, or you can be a high-risk gambler. But you shouldn't be allowed to be both. We could have Chase Commercial Bank, and Chase Investments Inc., and they can each be as big as they want, but those companies should be separate. Why do we need companies like Chase that are both things, under one tent?

The real answer, from Jamie Dimon’s point of view, is simple-- there’s no way he could have a $350 billion hedge fund if he didn’t have mountains of federally-insured money to play with, and a steady stream of low-interest loans from the Fed. Merkley points this out:

"How many companies on the planet have been offered half a trillion dollars in low-interest loans? Not many," he says. "But the basic concept of the Volcker rule is that banks are in the lending business, not the hedge fund business. Would you agree?"

Dimon, taking his time with this dangerous question, answers: "We’re not in the hedge fund business."

This is an obvious lie-- that’s exactly what Chase’s CIO unit is, a giant hedge fund. Merkley goes on to point this out, noting that executives at CIO had already admitted that they were told to change their strategy and accumulate high-yield assets, and specifically risky credit derivatives, instead of safer, government-backed securities. Moreover, this was all at Dimon’s specific direction.

"That sounds like operating a hedge fund," says Merkley, "and doing so at your direction, with government-insured deposits."

Dimon tries to dismiss this observation by pointing out how safe CIO supposedly is. "Here are the facts," he says haughtily (as if what Merkley was talking about were not "the facts"). "We have $350 billion … the average rating is double-A plus. The average maturity is two or three years, not twenty or thirty …" Etc. etc. In other words, CIO isn’t a risky fund, except of course when it unexpectedly loses many billions of dollars overnight. Dimon seemed very put out that he had to explain this to Merkley.

Again, what was most disturbing was the tone of the hearing. The senators treated Dimon like a visiting dignitary and a teacher of great wisdom, not like a man who, after growing very rich off of public money, had put the whole economy at risk by engaging in wildly unsafe financial sex on a grand scale. Senators are like judges-- the way they comport themselves in public is important, and it's important that they work at maintaining the dignity of their offices. You don’t get to snort and roll your eyes in front of a judge, and you shouldn’t get to do on the floor of the senate, especially when you’re there because you violated the public trust. Somebody has to remind these legislators who it is they work for, and it’s not Jamie Dimon.