In economics, like in war, the best propagandists prefer the language of euphemism to straightforward, ignoble fact, the latest in obfuscatory jargon to the jarring reality of truth. Why, that’s not a dead mother whose children are uncontrollably weeping over her corpse as we speak, that’s collateral damage; that’s not a fraudulent investment that turned out bad for some rich banker who may, god forbid, have to cancel his daughter’s private tennis lessons with Steffi Graf, that’s a toxic asset.
Like any other illusionist, the better practitioners of the art of literal and economic warfare cloak their actions in mystery – things are never quite as simple as they seem. No, that box doesn’t contain two women, just one who I cut in half! No, we’re not just stealing your money to give it to rich people, we’re restoring systemic confidence! And they do it for the same reason: to deceive.
Larry Summers, former top economic adviser to Barack Obama, is a master when it comes to making theft and exploitation sound banal and almost respectable. In an Op-Ed this week in the Financial Times, “How to save the eurozone,” Summers predictably urges policymakers in Europe to follow the American lead and guarantee one thing and one thing only: Keep the rich, well, rich. And make ’em richer if you can.
To just come out and say that anybody making above a certain six-figure threshold gets to play by different rules than the unwashed masses would be uncouth, albeit true. Summers, faults aside, knows this. But when the purported economic genius speaks of the need for “a clear commitment that, whatever else happens, no big financial institution in any country will be allowed to fail,” there’s no getting past the meaning.
And when he condescends that “Teaching investors a lesson is a wish not a policy”? He’s being a bit of a dick, yes. But he isn’t wrong.
Who, after all, besides those engaged in direct action, is going to hold the likes of Goldman Sachs accountable when the entire ruling establishment is beholden to them? Those with the most power and money in America have long since succeeded in buying the support of that criminal class famous for its fidelity to little more than power and money: politicians. Barack Obama, the much-vaunted community organizer of change, raked in more money from Goldman than John McCain in 2008, and he’s gone on to serve the financial elite well since in office, occasional grumbles notwithstanding. Embarrassing perp walks for those who raped the global economy with fraudulent investment schemes financed with cheap government cash is a nice fantasy, but barring an incident with a live boy or a dead girl, it’ll remain just that.
Summers, however, expresses some concern over the threat of populism, which has manifested itself in popular protests from Greece to America but not so much in actual policy. The pitchforks are starting to appear, though, and some timid lawmakers could be unserious enough to listen to those wielding them. For that sort Summers has a stern message: “punishing creditors for the sake of teaching lessons or building political support” – there’s the allusion to that annoying will of the people again – “is reckless in a system that depends on confidence.”
As a rich man whose own wealth and power has only grown in the face of failure, advocating and helping draft the policies that led to the Internet and housing bubbles chief among them, it’s no surprise Summers, who makes tens of thousands of dollars an appearance to make wealthy bankers feel important, believes actual performance should be no obstacle to obscene wealth. And it comes as no shock that he’s smugly defensive about it, ridiculing as myopic and driven by emotion attempts to hold the investor class accountable. A lack of personal responsibility and rugged individuality is to be denounced in the lower class, the lazy welfare cheats, not expected from the ruling one.
As other defenders of the bailouts and the accountability-free culture that rules the financial sector, Summers doesn’t blame the ongoing economic woes around the world on bankers and the politicians that, listening to folks like him, diverted trillions of dollars in taxpayer money to the very financial interests that helped sink the global economy. No, even as small banks and businesses that were actually responsible are being denied loans because all the money has been redirected to the big boys, Summers maintains the global economic depression is due to the fact that not enough of the lower and middle classes’ wealth has been siphoned off by the ultra-wealthy.
Indeed, the problem according to Summers’ telling of it is that short-sighted policymakers allowed Lehman Brothers to fail like it were – imagine! – some poor janitor laid-off by his Fortune 500 employer. “The adverse consequences of the shattering effect that had on” – you know what’s coming – “confidence are still being felt now,” he says. Employed no less than six times, “confidence” is code-word for “theft,” surpassed in euphemistic quackery only by Summers’ appeal to the need for “restoring arithmetic credibility.”
Tom Friedman, hand over your crown.
Thoroughly deserved and unapologetic mockery aside, let’s be clear about what Summers is advocating – and the policy his protégé, Barack Obama, is implementing from the White House: the rich, “whatever else happens,” must stay rich, even (nay, especially) at the expense of the poor. If you are deemed rich enough, “big” enough, you and your company will continue to be big and rich for eternity. Financial institutions like Bank of America, Morgan Stanley, Goldman Sachs – they are all too big to fail, unlike you or I. The financial status quo is perfection, bequeathed to us by a loving, day-trading god. Change is a campaign slogan, not an economic policy.
Unless the change in question is the poor getting poorer. That’s cool.
Far from radical reform, the Obama/Summers goal is maintaining things exactly as they were before the economic crash of 2008, with a small but increasingly wealthy class calling the shots and free to make mistakes, often criminal in nature, with impunity. At the same time, an increasingly large impoverished class is asked to go further in debt to the same class it bailed out – someone needs to keep buying the cheap crap our economy runs on – with the gap between the politically connected haves and the politically exploited have-nots ever-expanding.
“Systemic confidence,” in this context, is a nothing but an academic-sounding deception, a fanciful way of conning the masses into believing the theft taking place is something other than just a standard stick-’em-up robbery. In the pursuit of “confidence,” the profits of big business are privatized – we aren’t communists! – while their losses are socialized. When it comes to the trials and tribulations of the rich, we’re all in this together. When it comes to the perks? Get off my lawn, I’m calling security.
There’s an admittedly over-used but entirely appropriate word, starting with an “f,” that describes the form of economic system advocated by the likes of Summers and being imposed by the ruling elite. It isn’t “freedom.”