What’s So Funny About Peace, Love And American Capitalism?

That is the height of irresponsibility,” Mr. Obama said angrily [re $18 billion Wall Street bonuses]. “It is shameful, and part of what we’re going to need is for folks on Wall Street who are asking for help to show some restraint and show some discipline and show some sense of responsibility.

Well that settles that. Mr. Obama showed remarkable restraint refraining from the dread Presidential Finger Wag.

Even with ‘change’ and All That we Americans are still mere spectators. Now new fingers push on the American balloon. All the same words. ‘They should’ and ‘we will not stand’ are followed ritualistically with ‘we must.’ And nothing happens. Oh, the American dullard masses get a token trophy like cancellation of a long standing aircraft delivery. ‘Go away kid, you’re bothering me.’

Which prompts one to ask, what precisely has American-style capitalism (defined in its terminal phase 1995-2007) really accomplished? Is it really worth ‘rescuing’? Why shouldn’t we consider significant alternatives on purely practical grounds — alternatives beyond mere regulatory tweaks?

There’s the old truism that one bad story will get you a regulation; two, and you will get a law. So this isn’t about the depressingly predictable 2008 bonus dispersal per se. Although it would be nice to see Obama et al. do more than scold and institute proceedings for disgorgement prior to further tax payer subsidy.

What we have in 2008-2009 is the worst of all worlds — weak socialism. ‘They’ did such and such. ‘We will fix’ such and such. It’s just like Bremer’s CPA all over again. No one is ever accountable for draining the well of the unborn American’s future standard of living. Many wiser minds than the Stiftung summed up our puzzlement by asking if American capitalism as an economic model is fatally addicted to the false wealth of bubble economies.

Joseph Stiglitz: We had the tech bubble, followed by the housing bubble. But once we fix the recent mess, what will replace these bubbles as the engine for the economy?

Feldstein: What will replace the consumer spending bubble?

(Both men): We run the risk of the economy becoming depend on constant stimulus to replace these bubbles.

Stiglitz: I worry that after two years of stimulus, that the economy won’t be going on its own, and then what will we do?

More pressing in the near term, how ever will Wall Street ‘talent’ get their bonuses? (And all the assorted pilot fish of law firms, Big Accounting, ‘PR’ firms and others in the non-value creating microcosm). And will anyone really give a damn besides a stern talking to?


  1. Anon says

    re Forbes – Mark to markets – he may be right, but had that accounting rule been changed a while back, we’d guess it would have ushered in even more false valuations and creative accounting. Then you’d have Forbes et al calling for rock ribbed mark to market accounting in a typical right wing Standards rhetorical ploy.

    Same with Lehman – if Lehman had been saved, then it would have delayed the inevitable.

  2. Anon says

    re Conrad’s quote was brutal and correct when he said it, but it came with a timeclock – Palin was awesome when packaged and unexamined – but if it wasn’t Couric, it would have been someone else – Sarah was just no ready and she is too right wing for the times. But she has great sex appeal (reporters should not be so priggish or pseudo-feminist to fail to say that) and there is a place for her a bit later on when she masters her brief learns from her many mistakes.
    She should go for the Senate – she’s probably not educated enough to be President. She does not know what she does not know. Not that she’s dumb – she’s average or a bit above.

  3. Anon says

    We don’t think Gregory will last more than a year or two – He is so much worse than Tim when it comes to raw broadcasting skill, but he doesn’t compensate with any in depth knowledge or experience.

    It’s was very easy to tell that both Gregory and Tweety did not even read Obama or McCain’s bios.

    Gregory also made a fool of himself recently when he said the press corp was very tough on Bush pre-Iraq.

    He really can’t help it – His wife works for Fannie – he is too in deep with the culture of insider entitlement.

    He seems like a nice enough fella.

    Stephanopolous has no excuse – he’s smart (and arrogant) – but that precious little roundtable w/Cokie and George has gotta go.

    Brinkley is still missed.

    Anyway – The Boss just has a pretty good show during halftime.

  4. Dr Leo Strauss says


    Conrad’s quote is interesting, isn’t it? For the convenience’s sake, here’s the quote for others:

    The Democrats and the feminist media establishment failed in their effort to represent Governor Palin as a Dan Quayle dunce in drag, a trigger-happy Stepford Wife and negligent mother (because she would choose to run for vice president despite her young family and 17-year old unmarried, pregnant daughter). The frenzy of the initial assault, and the sanctimonious conceit that American women would be offended by the candidacy of such an allegedly ditzy yokel, showed that McCain had remembered the basic military strategic lessons to apply maximum force at the decisive point and achieve complete surprise: If the liberal Democrats are taking the high ground on extramarital sex and working motherhood, you know they are frightened.

    But even the Republicans were not prepared for the virtuosity of Ms. Palin’s debut on Wednesday night. Managing to be winsome and even ingenuous, while witty; hard-hitting without being a harridan; an authentic feminist about what women can aspire to, while being a traditionalist; a clean government achiever and a populist enemy of the oil companies’ excesses and the proverbial special interests; a spunky and endearing, yet effective, attack dog; she touched all the buttons. The early Democratic and media ripostes of offended American womanhood, lumpenbourgeois mediocrity and the primitive frontierswoman with a rifle in one hand and a Bible in the other, were completely inadequate.

    She is a naturally popular person, and a contrast with Joe Biden, a monotonous leftist journeyman, full of pretension and loquacity, a plagiarist (from Neil Kinnock of all people) with hair plugs . . .


    Of course, this was all pre-Couric. Given that Lady Black is unquestionably sharp and a woman of accomplishment Conrad’s initial support perhaps doesn’t surprise (especially given circumstances – his and the Republican Party early Sept. 2008). One would imagine (but I haven’t seen) that Conrad’s enthusiasms took a turn shortly thereafter.

    Still Palin exerts a hold over the collective political mind. In the D.C. media bubble our take was maybe 60-40 on who was the bigger media draw for the Alfalfa dinner — Obama or Palin’s attendance.

  5. DrLeoStrauss says

    It’s a wasteland across the spectrum. Burnett gave good eye candy and her usual shallow observations this time sans hair flip.

    The Sunday talk show conversation about banks and the banking economy was sophomoric. On Meet the Press, Gregory doesn’t understand the difference between an investment bank and a commericial bank holding company, or why the investment banks moved. This doomed a ‘fixing them’ discussion to surface generalities. A bonus conversation is similarly meaningless — if they don’t understand the ‘bonus’ structure difference between a commericial and investment bank, what’s the point? (And you could tell he isn’t really sure what AIG is so it is in there in some murky way). And so on.

    When Forbes kept pushing mark to markets at least Gregory had the presence of mind via his producer in the earpiece to ask blanky what that is. We were relieved that Forbes stayed on message and didn’t veer into how a flat tax will solve Afghanistan.

    This Week fared little better. Barney Frank has to be the least effective advocate for a non-tax cut driven stimulus. Purely on substance and on camera dynamic he is just awful in the face of unwaivering tax cut, markets not socialism, government caused all this Kool Aid. His only response is ‘A tax cut doesn’t fix a road’? Eric Schmidt from Google (in typical Silicon Valley fashion) has no interest in actual engagement, just a quick cheque please and then leave us alone again.

    Meanwhile CNN offers noted financial experts such as David Gergen and then Grover Norquist. The later sat one on one with John King with King as solemn as if he is interviewing the president. Now, CNN offers Zakaria from the intimate snow lodge at Davos. “You can’t go to Davos, we’ll bring Davos to you!” It’s a shame he isn’t holding a martini.

    One really can’t make this up. Almost feels worth live blogging for some of the comedy gold. If only SNL were up to it. The skits really write themselves.

  6. Anon says

    Newt tried to adopt the patois of the consultan-ocracy and frame it for the strip mall conservatives and the red brick college (h/t FDR) right wing professoriate. His ungainly use of the language of management books serve to highlight the ugliness of the whole aesthetic. But Newt never seems to have any self awareness.

    re Wall St. bonuses – Erin Burnette is on MTP defending the whole biz. She’s cute, so we’ll cut her some slack. But she made a moronic excuses

  7. Anon says

    Anon has relatives that went to HBS fairly recentlt and in the late 50s/early 60s. Half joking, We pity the recent grads – They will always be less successfull than they think they should be. The pressure is relentless — but unlike the older generation, it is heavily geared toward finance and consulting, rather than innovation and industry.

  8. Tbilisi says

    Anon: this generalization applies to most of the Ivy League and the ‘leaders’ they produce.

    Have you read “Factory for Unhappy People” about HBS? This was the author’s argument/experience – that they are taught simultaneously the tools of robber-baron capitalism and the ideology that the American system is structurally designed so that their personal financial success is inextricably linked to the common good. Basically turning ‘doing well by doing good’ into ‘doing well is doing good.’

    In this vein, I think it’s fitting that Obama has brought on so many from McKinsey. They are perhaps the most skilled at this type of sleight of hand. Case in point is their branding as ‘financial deepening’ of over-securitization, a la this gem from Harvard Business Review:

    “All this has happened as the world’s capital markets have undergone an extraordinary transformation. The value of the world’s financial assets—including equities, private and public debt, and bank deposits—has soared from $12 trillion in 1980 to $195 trillion in 2007 (see the exhibit “An Explosion of World Financial Assets”). In fact, those assets have grown faster than the world economy, a phenomenon my colleagues and I at the McKinsey Global Institute call financial deepening. In 1980, the total value of global financial assets was roughly equal to world GDP; by the end of 2007, world financial depth, or the ratio of assets to GDP, was 356%…We know that deeper financial markets, though unruly and unpredictable, have many benefits: They can provide broader access to capital for borrowers, increase opportunities for sharing risk, and spur economic growth. Of course, market turmoil can also cause great disruptions, such as the currency crises that led to devastating recessions in Asia during the late 1990s and shortly thereafter in Argentina—not to mention the U.S. subprime mortgage debacle, which continues to unfold. As policy makers look ahead, their goal should be to enable the world to enjoy the benefits of evolving global capital markets while managing the risks more effectively. But success depends on updating our thinking, not just our rules.”

    So in other words, clever techniques for selling people monopoly money in exchange for real money for themselves is really just Wall Street’s contribution to financial inclusion. Is it still noblesse oblige if you fake your responsibilities?

  9. Anon says

    It’s our experience that people on the Street tend to think they are underpaid, even when overpaid. Also – they tend to think they do more for society than an average person, when it’s the opposite. This is a generalization and there are lots of great people on Wall St, but that Dennis/ CNBC/ Jack from the gut/ parasite/Ayn Rand-ish culture still stinks up the place –

  10. Anon says

    Dennis Neal was in an angry exchange with Donny Deutch a few days ago when Deutch suggested it was BS that many people on Wall St who suck still make millions. Deutch is an acquired taste as a commentator, but he is a bona fide capitalist. Dennis was offended at this hint of Bolshevism from Deutch. It was the cheerleader debating the QB on TV – but as weird as it is, it is normal. For now.
    You know when this TV stuff really began – when they put a tickertape in Harry’s at Hanover Sq and then brought TV cameras there when the market tanked in ’87. It caught on.

  11. DrLeoStrauss says

    re Petraeus

    Given American infatuation with the unreal, it might well have backfired. One could see McConnell or McCain demanding that Petraeus get an annual bonus of say 1% of the CENTCOM budget ‘because he works hard.’

    The NYT story about the bonus culture is depressingly on point. http://www.nytimes.com/2009/01/31/nyregion/31bonuses.html?_r=1&ref=business

    As we’ve talked about before, since the mid 1980s in NY, people down the ranks no longer lived on their salaries and inflated their lifestyle to assume and depend on annual bonuses. This cost structure became built into operating expenses across all of the finance and finance related industries — including by the way, the acceptance of draconian work hour culture.

    The Times article simply shows how many don’t get the brutal truth that their lifestyle is over. It’s not a matter of ‘main street doesn’t understand how hard we work’ (the Stiftung put in many an all nighter with new shirts, etc. back in the day on Wall Street). Such a sense of entitlement.

    It’s also pathetic to see Democrats soft peddle the whole issue because of their funding base there. Peter Finn, for example, tosses the issue away by simply saying 2008 was a 40% cut from a record 2007, and dodges the fact it is still the 6th highest ever or any of the above. And why should they speak up? Like Emanuel, hey, punch out, hang with Bruce Wassertstein as he kvetches about KKR in its prime, pocket the dough, and then come back in the game wealthy like Cheney.

    What you say about the finance cheerleader class is quite true. Just today a blondinka on CNN named Poppy Harlow (now that is name worthy of an old Dillon Reed partner) of some tender years ‘reported’ on finance news. She sagely intoned ‘these [January] numbers are sobering, even for us who follow this industry.’ The utter absurdity of a naif offering economic free fall needs the patina of her personal endorsement boggles the mind. And so on as you note with Neal, etc. Poseurs indeed.

    One suspects the Street in the end will hoodwink Amerikuh yet again to subsidize their lifestyle. Perhaps if ‘populist’ (a label now meaning whatever it is attached to is ‘irrational’) fever burns they may get another ‘shameful’ sound bite. Maybe.

  12. Anon says

    A McCaskill error was pegging the executive salries to the President – She would have been politically wise to suggest three or four times the pay of General Petreus.

    To most Americans, the idea that these execs would get four times the pay of a 4 star General would be an outrage in itself. But that outrage is useful.

    But for many Wall Ste execs of public companies – being paid a mere million is absurd – a hairshit, as Conrad would say. They would regard – without any sense of irony – that restricted pay as a form of socialism – even as they took bailout money.

    Right now, it’s still culturally acceptable for clownish cheerleaders like Dennis Neal on CNBC to whine about Wall St. pay being highlighted.

    But most Americans, IMO, have no problem with people making money – whether Gates or an A-rod or whatever – It’s just the entitled class of build-nuthin losers on the street receiving welfare.

    The cheerleader types no nothing. They are poseur-capitalist – every bit as ridiculous as a middle class kid smoking Gitanes in his Che t-shirt on the West Bank.

  13. Anon says

    We see Obama has wisely picked Rush as The Opposition. McCain was on TV giving a defense of Rush that was even less believable that his attempts at showing Respect during the campaign. Rush doesn’t play well with swing voters. It was truly funny to see Gingry (sp?) ask Rush for forgiveness.

  14. Anon says

    re McLaughlin – the simmering catfight between Nixonette Monica Crowley vs. Elllllleanore Clift is building. Good work for McLaughlin

  15. Anon says

    Saw Michael Rubin on c-span today conducting his own passive aggressive campaign to wage war against Iran via the use of various experts on panel discussion.

    Yet, Rubin’s very plausibility as an advocate is a form of passive aggression by the Establishment. They can deny Rubin or blame him.

    If you watch Rubin or listen to him, you pick up on some insecurity – He sense he is being used in some infathomable way – yet, he wants to use people too, but in a way that would also be deniable.

    In his furtive glances and halting speech, one detects, in Rubin, a struggle for recognition – a desire to be loved. Too bad for Iran (and us).

  16. DrLeoStrauss says

    Terrific insights about the Establishment’s covert passive aggressive need for the Neocon impulsiveness. The old 2004 ‘insight’ about playground rules dominating American political ‘thinking’ applies as well. On an individual level, we’ve all witnessed messy disputes in our day to day lives and upon detecting a passive aggressive nature involved recoil.

    Couldn’t agree more about Neocons and Wall Street. Said that in reply to the original e-mail earlier today. Why should Mylroie be held to account when no one else in America is if they don’t do manual labor? Even if she figures a way to manipulate the U.S. into another war in Pakistan it wouldn’t really matter. She would have to invoke Mother Theresa, Ghandi, Gary Cooper *while* on The View. She might merit a 90 second sound bite by Obama with the dread ‘shameful’ beat down. And then the world would go on.

    Seriously, the point holds. McCaskill Senate floor speech today expresses a perhaps quaint outrage at the entire decadent Wall Street culture. Government parasites like John Harris and others barely contain their smug contempt on camera at McCaskill’s faux pas — to show real, unvarnished emotion! Tsk. How humorous since Harris et al. have never worked on Wall Street, know nothing of the actual mechanics of the bonus culture, or even how deals are put together and closed. Yet these Washington D.C. e. coli all opine ‘Oh well, of course this 2008 bonus disbursement happened. Nothing can be done. That is the way the world works, you know.’ And shake their head at McCaskill’s not-ready-for-prime-time stumble.

    A one off contract by ONA is actually not that big a deal in isolated fact. Andy Marshall after all sponsored almost all the Neocons like Wolfowitz, Perle, etc. as padawans. Marshall under Rumsfeld sponsored bull sessions and ‘future think’ exercises that if transcribed for public consumption would read like the equivalent of Neocon Penthouse Forum bad porn. Still, it is true that Marshall has an uncanny knack for getting memes into DoD’s bloodstream.

    “Exit question: Patrick Buchanan, on a scale of 1-10, 1 being an extravagant lunch at the Four Seasons and 10 being metaphysical financial obliteration, rank the Mylroie flap.”

    “John, it’s an example of Neocon contamination. [Hand chops] She may be even now infiltrating State, undermining Holbrooke and getting us into war with Iran. It’s a 6!”

    “Wrong. The correct answer is a lunch at the Four Seasons prepared by a chef who didn’t wash her hands. 0.5. Buy bye!”

  17. Anon says

    There is another way to look at the neocon falling upward phenom – In a sense, the neocons were/are just a differently masked voice of Establishment opinion – Bad cops, of a sort. In other words – the Establishment (not necessarily members of the Estab) wanted to attack Iraq and the neocons played a third party role advocating what some members of the establisment wanted even thought they didn’t realize it themselves at the time = So they only resisted in a passive easy fail way (see Kerry and HRC or Bush 41 leakin etc)

    IMO – Public opinions seems to see it this way – They know the neocon Id and the Powell Superego, but they blame The Man (ego).

  18. Anon says

    What’s annoying about the neocon pundits failing upward is not so much that they have moved on – Rather, they have no need to feel defensive or explain because there past errors don’t seem to count.

    Somewhat similar are Wall St execs who have failed and ruined their companies, but still award themselves bull market bonuses from Tarp money.

    Dennis on CNBC is whining about Obama pointing that out in a calm and subdued way.

    Where are the Bolsheviks when you really need them? LOL.

  19. Anon says

    Stephen Hayes is continuing to be mainstreamed on CNN. Mylroi is just a more credentialed/personally fidgety version of Hayes.

    So Clemons is “shocked.” Really?

  20. Anon says

    Until Obama can get bonus recipients to yell at him like they did at FDR he is just whistiling Dixie (literally). It was interesting seeing “capitalism” cheerleader Dennis Neal on CNBC argue with Donny Deutch on CNBC about this topic. Dennis kept arguing that his heroes should receive bonuses because that was how the street works,

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