By Craig J. Cantoni
Feb. 3, 2009
President Obama is accomplishing the impossible. He’s making George W. Bush look good, which is almost as difficult as making okra look good to a kid.
Even more amazing, he’s proving that the nation’s smallest and most maligned political minority group has been right all along about our broken government, broken banking system, and broken Democrat and Republican parties. I’m speaking of classical liberals like me, or, in today’s parlance, small “L” libertarians.
Unfortunately, being right feels terrible, for it means that the nation is doomed to a future of more statism, socialism and economic crises, unless Obama’s stimulus package stimulates the lumpenproletariat to buy pitchforks and pikes at Home Depot.
Hope and change have been Daschled, er, dashed, on the rocks of Chicago-style Democrat machine patronage. Obama is the reincarnation of former Mayor Richard M. Daley, but without the jowls and the “Youse guys” English of Chicago’s Southside. Like Daley, he speaks about the little guy while handing out jobs to machine hacks.
Is there a bigger hack than Tom Daschle? And is there a bigger plutocrat? Obama has invented a new political species: the plutohack.
Obama promised to have an ethical administration devoid of lobbyists. Yeah, right. Daschle made $5 million in four years after leaving the Senate, including payola from the healthcare industry, the very same industry that he’ll be overseeing as Health and Human Services Secretary. Oops! Daschle, like Treasury Secretary Timothy Geitner, didn’t pay his income taxes. Double oops! Mrs. Daschle is a lobbyist. Triple oops!
If this is an ethical administration, then Bernie Madoff ran an ethical investment company.
Plutohack Daschle is so far removed from the common folk that he thought that a free limousine and driver were not imputed and taxable income for private citizens. His defense? He didn’t have to report such freebies to the IRS when he was in the House of Lords.
Similarly, plutohack Pelosi doesn’t have to report her use of a large Air Force jet to fly back and forth between Washington and San Francisco. Yet Obama rails against corporate fat cats who use corporate jets while on the public dole but says nothing about plutohacks who use government jets while on the public dole.
By the way, the Washington metropolis is so full of plutohacks that the metropolis includes five of the top ten counties in the nation in per-capita income. Have you noticed that massive layoffs aren’t taking place in the federal government as they are in the private sector? Doesn’t that make you want to buy a pitchfork or pike?
If no, then this will: Today’s economic crisis was decades in the making by both political parties. The crisis was not caused by a failure of markets. It was caused by the government having a monopoly on the printing of fiat money and by the government establishing a cartel of the Federal Reserve and its member banks to distribute the money to their cronies in the financial industry. It’s no coincidence that plutohacks move with ease between the monopoly, the cartel and the financial industry. They’re all in the same exclusive insider’s club, a club that excludes you, unless you storm the door with pitchforks and pikes.
Let’s look at the revolving door: Treasury Secretary Timothy Gietner moved from the Federal Reserve to the Treasury. Former Treasury Secretary Henry Paulson moved from Goldman Sachs to the Treasury. Former Treasury Secretary Robert Rubin moved from Goldman Sachs to the Treasury and from there to Citigroup, where he “earned” $126 million while helping to destroy the company. Former Treasury Secretary William Simon moved from Salomon Brothers to the Treasury. And former Federal Reserve Chairman Paul Volcker moved from Chase Manhattan Bank to the Federal Reserve.
See a pattern here?
Speaking of Salomon Brothers, in the mid-1980s the investment bank recognized a business opportunity in the way that mortgages were financed by Ginnie Mae (Government National Mortgage Association) and by the politically powerful savings and loan industry. It created what is known in the trade as collateralized mortgage obligations, or CMOs. Salomon bought mortgages from S&L’s, packaged them into CMO bonds, and sold the bonds back to the S&L’s, which didn’t have to show them on their balance sheets, thus evading the eyes of regulators. Mortgage debt skyrocketed in the United States and around the world.
All of the plutohacks mentioned above knew that this was going on and knew about the dangers that the practice posed for the economy. In fact, the head of bond research at Salomon, Henry Kaufman, wrote the following in the July 1987 edition of Institutional Investor: “One of the most remarkable things that happened in the 1980’s was [the] sharp explosion in debt, way beyond any historical benchmark. It was way beyond anything you would have expected relative to GNP, relative to monetary expansion that was taking place.”
In summary, it’s clear that President Obama is not going to end the monopoly, the cartel, and the financial industry cronyism. Nor is he going to end Chicago-style patronage and the appointment of plutohacks to high office.
I’m sorry if your hopes have been Daschled.
An author and columnist, Mr. Cantoni can be reached at email@example.com.