Matt Taibbi on the “1%-off”

Barack Obama, whose administration has pursued zero successful corruption prosecutions relating to the financial meltdown of 2008

Matt Taibbi is a writer with the virtues of his faults. The man who coined the phrase “vampire squid” to refer to Goldman Sachs has a knack for arresting rhetoric, but his reasoning can be breathless, too. Goldman Sachs is probably less like an evil sea monster and more like the complex problem of preserving egalitarianism in a post-industrial FIRE economy. Taibbi sure can write a screed, though. On Tuesday, he posted a scathing indictment of the 2012 election and, I think it’s safe to say, contemporary American democracy. As Americans literally riot in the streets over the outsized influence of Wall Street and corporate money on government and society, the race to the race to the White House feels like “a banal bureaucratic sideshow to the real event – the real event being a looming confrontation between huge masses of disaffected citizens on both sides of the aisle, and a corrupt and increasingly ideologically bankrupt political establishment, represented in large part by the two parties dominating this race.” Read that again and tell me any part of it seems implausible besides “looming confrontation.”

Taibbi’s argument should be familiar to anyone who has listened to a person ignorant of politics explaining why that makes him smart. “They’re all the same” is a convenient excuse for not participating in an electoral system that requires analysis and decision-making, and I am suspicious of any argument that makes laziness coincide with virtue. Yet Taibbi makes a compelling case that our sitting President and any of the men likely to run against him are interchangeable with respect to the country’s most pressing problem: corporatocracy.

Consider three of his supporting facts:

  1. In 2008, the total campaign contributions Obama received from the financial services industry was more than any two previous presidential candidates.
  2. The top 20 donors to both the Obama 2008 and McCain 2008 campaigns included all the major bailout recipients, which donated to both candidates in amounts proportional to their eventual share of the electoral vote.
  3. Mitt Romney is a “private equity parasite.”

That last one is not strictly a fact, but it’s hard to argue that the governor’s son who made a second fortune in leveraged buyouts is the man to break the link between corporate money and politics. As much as it pains me to say so, the President whose administration has barely regulated a demonstrably dangerous financial industry, punished no one for a mortgage investment scheme that wrecked America, and needs a recess appointment to put someone in charge of a consumer protection bureau is not the guy to do it either. If 2012 were Tombstone, it would be about the effete sheriff character campaigning against his twin brother.

Unless, of course, you reject the premise that money runs contemporary American democracy. If you believe the system is not corrupt and that the democratic republic of the United States chooses its leaders according to the will of the people, then immigration and job creation and whether gay dudes can get married return to being first-order problems. The tool for fixing them is government, and government still works.

I hope that is the correct assessment. Taibbi thinks otherwise, but Taibbi likes an epic subject. Taibbi also notes, however, that since 2004, the candidate who spends the most money wins a given House or Senate race between 74% and 94% of the time. That makes money a better predictor of electoral victory than any factor except being black. In 2008, at least at the presidential level, donation even trumped that prejudice for first time in history. This year, in the first national presidential election since Citizens United v. FEC, money will probably not get weaker.

For those of us who are not multinational corporations, the question becomes whether this state of affairs is regular-ugly or whether our democracy has been corrupted. If the United States is in danger of becoming a plutocracy and the two major parties do not significantly differ with respect to plutocrats, we need to consider the possibility of systemic change. I have just read a long blog post by Matt Taibbi, so probably I am not thinking clearly. Maybe, though, I have that off-balance feeling of having just been warned.

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  1. Do you really think the Dodd-Frank Act and the CFPB are worthless? Most banks have already severely cut back on their prop trading desks in preparation for the Volcker Rule’s effective date (and because the markets suck), and the CFPB finally announced their ability to regulate “nonbank” financial entities today, i.e., mortgage originators, brokers, and servicers — the people who tricked Americans into buying too much house, then booted them from it without even considering a loan modification.

    This regulatory stuff might not be inspirational, but whatever Obama’s faults (he has many), at least his party doesn’t take it as an article of faith that cutting back on regulations and taxes is the only way forward, and race-bait by pointing to the toothless Community Reinvestment Act to explain the Recession.

    Sure, sometimes our government looks like an economic development corporation, but shit would look really different if McCain had won. There’s a difference, but it’s narrowing.

  2. Anyone who thinks there is no real difference between the parties has already forgotten the turning point in history when Ralph Nader’s third party run for the presidency gave us George Bush.

    As a sidebar, will anyone earning $34,000 a year who still thinks they can afford a $375,000 “starter” house, with nothing down and variable interest looming in the near future, please raise their hands? (If something is too good to be true, it either isn’t true or it isn’t really good.)

    Corporations have too much power. But a lot of ordinary citizens have given up the power to use their own judgment, common sense, and amortization tables.

  3. Nader did not give us the Bush presidency. Rigged voting machines and corrupted voting officials gave us the Bush presidency. Also there is no way to fix this system. We can only kill it and start over, but we have to do it now.

  4. Kill what system? Echo-chamber spleen, including Taibbi’s, is counterproductive.

    If you want to fix the public sphere of this country — not for the purposes of short-term vindication, but for long-run stability and equality — you do two reasonably-straightforward things: You fund elections publicly, and you fund public education to a high-performing level. Democracy will fix itself thereafter.

    These are questions of policy, and the answers to them are not going to come from the streets, and they’re certainly not going to come from the Internet, they’re going to come from the statehouse. Don’t kill the system: the system’s the best in the world. Become the system, and then fix it.

  5. I agree with hapalito. Don’t kill the system when all it needs is reform. It’s hard to see right after reading an article implying US elections are bought and sold, but our system still produces outcomes that are very good. When I say “good” I don’t mean “optimal,” I just mean historically speaking our outcomes aren’t as fucked up as they could be. We don’t have a Putin sticking around forever or a Chavez “cubanizing” our textbooks. We just have Bushes and Clintons straying from the political middle very occasionally with outsized media attention.

  6. What’s being described as “Two Parties” in conflict is instead simply the ordinary swings within our Single Party. As you may have noticed, the swings over the prior three to four decades have been mostly to the RIGHT. And right now, instead of offering an admission of responsibility for the mistakes the Right Wing (including the Extreme Right Wing) has made during that period (wrongful and criminal wars, the absurdity of a “war on terror,” “forever war,” savaging the Constitution and even the rule of law, Citizens United, Bankster thievery deriving of Right Wing Economic Policies, those destroying a big part of our economy and the world’s, torture, (I will stop the listing here) and the failure to charge, prosecute and punish those most guilty of these crimes) the Right Wingers Insist They’ve Been Right All Along! This incredible perversity, grounded in upper tier wealth and corporate overpowering of public government, gets nothing like outsized media attention. Indeed, the offered hope seems to be instead our returning to those GOOD OLD DAYS. That’s as unlikely as a snake crawling back into the skin it has freshly shed.

    The Private (Corporate) portion of our government of course sneers at reform; it can pardon and forgive itself. Mostly it has. If you haven’t notice THAT, you very much don’t understand “Our Government.”

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