New Yorker on Banking Corruption: Suck it Up and Stop Whining

I was waiting last Thursday for somebody in the corporate media to point out the sweet irony in two simultaneous announcements: 1. The stated commitment of the G-20 countries to a regime of greater regulation of private financial colossi, and 2. The news out of Washington that same day that our own Financial Accounting Standards Board will now deregulate by abandoning the “mark to market” rule that currently requires our big banks to be honest about their bad assets.

Think about it for a minute: all the reports noted that the FASB changed the rule under pressure from Congress—i.e., under pressure from the same solons who denounce irresponsible bankers for the cameras but who still take the bankers’ money and accept the bank lobbyists’ talking points about the intolerable burden of having to tell the truth on their balance sheets.

Then Saturday came the news, also greeted by a chorus of yawns, that:

(a) Fannie Mae and Freddie Mac both intend to pay routine retention bonuses worth $210 million to their senior executives—even though these two corporations were big contributors to the bad mortgage mess—and (b) Larry Summers, Obama’s chief economic advisor, picked up a tidy $5 milllion last year from giant hedge fund D.E. Shaw, along with $2.7 million for giving speeches to groups like Goldman Sachs, Citigroup, J.P. Morgan, and Lehman Brothers (now of sainted memory). And this is the guy who is supposed to be saving us from future fraud and abuse on the part of these same entities. Sure.

I’m fairly sure the supply of public outrage is now depleted to the point that routine corruption like this no longer shocks us, let alone gets us to raise the clenched fist.

But here is something that should still revolt the conscience: the word being passed down to us from the great and the good that all resistance to government by and for greedheads is futile—that we should suck it up and stop our whining.

A prime case in point: Nick Lemann’s “Talk of the Town” comment in the April 6 New Yorker. Lemann has three points:

1. Obama doesn’t really care about this shit, so why should you? He has other fish to fry.
2. Populism is dangerous, especially when it concerns wayward bankers, so best not to go there. Rage is not a policy.
3. The latest Geithner deal to subsidize the hedge funds that purchase bad bank assets is deeply flawed—it will probably deliver staggering bonanzas to the fund managers and may not work at all—but going this route is politically easier than taking a rational approach (short-term bank nationalization). So we should just shut up about it and let Obama spend his political capital on education, health care, and energy.

Pardon me, Nick, but the course you are recommending—and the White House policy you are explicitly endorsing—happens to represent a complete breach of public trust. It happens to represent an absolute violation of the public’s expectation that Obama will actually clean up the Wall Street mess, change the culture of greed, and demand transparency and accountability at every level. It represents an unprecedented level of patronizing cynicism.

I can understand political expediency; I can accept some degree of it. What I cannot accept—what I feel I need to resist and what we need to resist with every fiber of our moral being—is the smug patronizing tone of people like Lemann.

Let me be clear about what I mean: there is a vast, vast divide in this country between those I refer to as “the great and the good”—people in the media and in academia and in government who make over $150,000 a year and who identify upward with corporate types—and everyone else. The fact that the former dominate most public discourse doesn’t make them right.

The former, Lemann among them, think the corps are basically good guys who got a little ahead of themselves, made some mistakes, and maybe should taste a bit of chastisement about that. A little chastisement is actually good if it serves to discharge the restless anger of the masses. Serve them the head of Rick Wagoner on a platter. No biggie.

What they cannot countenance is the idea that their crowd—people who enjoyed every advantage, went to the right schools, and run into each other at seminars and watering holes on a regular basis—will not continue to run things in pretty much the same way they have run things up until now. They cannot abide the idea that power really does need to be rebalanced in this country: that an effective oligarchy organized around money power is no longer compatible with our democratic aspirations or with principles of basic justice.

They cannot stand the commonsense wisdom bubbling up from the plebes all over the blogosphere and in letters to the editor all across the country—a commonsense wisdom calling for a basic reordering, for an honest accounting, and for direct relief to victims of banker abuse at a grassroots level.

Let’s tell the truth: This crisis could have been a moment of fundamental change on a par with the New Deal, but the moment of opportunity has already been betrayed by our well-fed social elites—many of them still cheekily characterizing themselves as “public servants” and as liberal Democrats-who don’t want fundamental change. And who, despite their rhetoric, actually have nothing but contempt for the great unwashed who didn’t have the sense to go to Harvard or establish themselves in the right ZIP codes.

Maybe I can’t change this truth today or tomorrow, but don’t tell me that resistance is futile. Resistance is our only possible salvation.