Photo via politicaljib.com
Editor’s note:This post was guest blogged by Dan Tanner of dan-ruth-tanner.com
In the USA, politics is only window-dressing. That is because, unlike in Europe, each political party is associated with only one economic system: capitalism. The only difference between the Republicans (the party of Greed) and Democrats (the party of Envy) is who should principally benefit from that economic system. Greed says it should be the wealthy and corporations, Envy says it should be organized labor (and lately, the middle class). Both Greed and Envy would throw a boon to the poor; Greed would call for private charity to handle it and Envy would use government largesse.
In the USA, we have a strange system that provides great governmental stability but at the price of inflexibility. Because Congressional terms are 2 years (staggered among equal thirds of the membership) in the House of Representatives and 6 years in the Senate (also staggered among the membership) and separately by electoral – not popular – vote every 4 years for President, it is impossible to turn government over entirely to one party in a single election, and nearly impossible to do so even in the span of two or more elections. Moreover, the doctrine of 3 co-equal branches of government (Legislative, Administrative, and Judicial) means that we have nothing like a no-confidence process, and the impeachment process is cumbersome and rarely used, and some argue, not correct to settle purely political questions. (Impeachment may be political in nature, but carries no criminal sanctions but only removal from office and is supposed to be used only for “high crimes and misdemeanors”.)
But stable one-party rule inevitably leads at least to excess and usually also to corruption. Under capitalism, the Greed party always rejects regulation, allowing robber-barons to get rich quickly and easily in a wild-west atmosphere. But unregulated capitalism does not work – it carries with the seeds of its own destruction through pursuit of greed.
Historically, every time the Greed party has been in power for a long time, it builds a house of cards based on speculation that nears collapse and the Envy party must come to power and – as is its wont – implement some regulation. In the process, it rescues capitalism. Franklin D. Roosevelt did that in 1932 after unregulated stock markets crashed and unregulated banks failed. We have as FDR’s legacy a Security Exchange Commission (SEC) and a Federal Deposit Insurance Corporation (FDIC) to regulate, respectively, the stock market and banks. The Greed party thinks it reviles FDR, but the communists hate him far more because he rescued capitalism from the collapse that that Karl Marx called “the dialectic”.
After the Envy party runs its course in power and looses its luster because of inevitable corruption, etc, the US electorate, fickle as ever, swings back to put Greed back into power. Under Reagan (Greed party) banks and thrift institutions (savings and loans, mutual savings banks) were lumped together and deregulated. The result was disaster that should have easily been predictable: the S&L scandal erupted because the thrifts had to compete with commercial banks, but could do so with government insured funds!
To this day, deregulated thrifts no longer offer long-term (30-year) fixed-rate mortgage loans. No commercial company in the USA does, because 30-years is far too long a term to lock in an interest rate. So, during the Regan administration, Freddy Mac and Fannie Mae were created by government to buy mortgage loans for 30-year terms. This was an historic change. When my wife and I bought our house on a 30-year fixed-term mortgage we went to the local savings bank and that is where we got our mortgage. Sixteen years later when we paid it off (we were thrifty and made accelerated payments on the principal) we went to see the same loan officer at the same desk at the same savings bank to do it. That is no longer possible. When you get a 30-year fixed-term mortgage (or, nowadays nearly any other type of mortgage) you go through a broker who places the loan with a bank or a mortgage company or God knows who, and that loan is quickly sold. It is sold as part of a “bag” of mortgage-backed securities.
This whole apparatus operates outside of any regulation. The game quickly became to issue bad loans and quickly pass them on – inside a bag that defies inspection – to the next sucker up the line.
Now history must make a turn. The Envy party – which favors regulated markets – must come to power to correct the excesses allowed during Greed’s turn.
Will this happen? Can it happen? I wonder. I fear that there is enough racism in the US to enable Greed to cling to power.
Capitalism is a lousy system, but it is probably still the best economic system that mankind can devise. And it can work if properly regulated (but even regulators can be come corrupt; we’re all only human). And democracy is a lousy system but also probably the best we can come up with. But democracy requires a fair, intelligent and informed electorate (not one that will simply favor the party whose VP candidate has a hot body – but remember that women voted for the “cute” JFK), and the US democracy has been thoroughly given over to the donor class. Anyone elected to office lets the lobbyists write legislation while he or she spends all of his or her time doing nothing but raising enough money to run for reelection. The donor class prefers it that way because it allows only them to determine the electorate’s choices, and often as not, to totally own those who gain elected office. This is true of both Envy and Greed party officeholders.
If the electorate comes to its senses and grasps what’s at stake – saving capitalism, which will surely collapse if the present Greed policies continue, it will elect Envy this time around, both for the Presidency and with enough of a majority in Congress to make governing possible. In 2006 it came to its senses (Iraq was the issue), but could only elect an Envy majority that was so slim that only stalemate between President and Congress (and due to rules, often even between the parties in Congress itself), not real governing, was possible.
The joker in the deck is the power of the Military-Industrial Complex. Usually Greed does not want to control the MIC and Envy wants to but can’t, because the MIC not only enriches the wealthy and large corporations but also provides a huge slice of employment in virtually every congressional district.
I won’t be voting. That’s because I live in Massachusetts. It is a foregone conclusion that Envy will win the electors and that the electorate will return all of the Envy incumbents (many running unopposed) to Congress.
Instead I will observe – fearfully. First that racism will cause Envy (which historically needs to win) to lose. If Greed wins, things get worse. And even if Envy should manage to win, the patient may be too sick to save.
Tagged with: Bank, FDIC, Federal Deposit Insurance Corporation, IndyMac Federal Bank, Karl Marx, Military-Industrial Complex, Savings and loan association, United States
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