Too Big To Fail

That’s a phrase we’d not heard much prior to the first of the massive bailouts we’ve seen these past few weeks. The idea, of course, isn’t new. Back in the old days we used to say “As General Motors goes, so goes the nation,” although I don’t believe I ever heard anyone suggest the government should actually take it over if it got in trouble. It seems the phrase, again until the last few weeks, went straight to the heart of the dichotomy between the right and left: The right would keep government out of business at all costs, while the left definitely thought there were sometimes costs that were too high not to have government step in.
Since the aggressive interventions of the Bush administration, though, the right wing isn’t so easily associated with the “let them fail” philosophy. It’s so confusing: GW, once the champion of American conservatives, now playing such a raving socialist. Where’d that come from?
The secret the right wing would like to ignore, of course, is that even they recognize that there are sometimes costs that are too high not to have government step in to avoid. One of these is a major depression. And they will doubtlessly do just that–ignore it. Or, as seems to be a more common strategy these days, simply lie about the whole thing. I heard one of the right’s thinker tankers say on NPR the other day that the New Deal just prolonged the Great Depression. I’ve heard a lot of B.S. from that side of the spectrum, but that’s the first time I’ve ever heard that particular spin placed on the New Deal. Amazingly, the interviewer didn’t even follow up on the point, let along challenge it.
A really interesting aspect of the financial melt down, it seems to me, is how very careful everyone seems to be in avoiding calling a spade a spade, simply because of how very revered the head spade remains to this day. I’m talking about Ronald Reagan, of course. The move to deregulate the financial system goes directly back to his administration. It began, of course, earlier with such icons as Goldwater and Nixon, but it wasn’t until the great communicator made Americans, left and right, believe that government “was the problem” that we actually began to dismantle the New Deal. And, certainly, it’s true that Democrats share almost as much responsibility for tearing down the protections that FDR fought so hard to install as did the Republicans, for successful politicians never swim against the tide of public opinion in a democracy. But, as Rousseau knew and explained carefully in The Social Contract, once required reading in High Schools all over the country, and as Americans are rediscovering, government has a legitimate and important role.
The fact remains, what got us here was the removal of almost all of the regulation that FDR put in place. Hedge funds, folks, are nothing but a device designed to allow people to buy on the margin. Essentially the same with sub-prime and interest only loans. Buying on the margin was one of, if not the primary, cause of the market’s melt down in 1929, and the main target of the New Deal’s regulations. Yet I hear most politicians today only blaming GW’s policies of the last eight years. Just because his policies may have lanced the boil doesn’t mean he’s responsible for the foxtail that caused it. This collapse lies firmly at the doorstep of Ronald Reagan and all the others that happily swallowed the crap that he sold so slickly.
Here’s the deal: Some things are, indeed, too important to ignore or let fail. It is the government’s main purpose to assure that such things are tended to. Among those things are public order (the police, etc.), national security (the military, etc.), public health and welfare (the Center for Disease Control, FEMA, Social Security, Medicare, etc.), and as we see today, the economy (the Department of Weights and Measures, the Mint, the transportation system, all the regulatory agencies we’ve been eviscerating over the last 28 years or so, etc.). Obviously there are many other things that rightfully fall into the proper jurisdiction of government, for there are many things we all need that can’t be secured without a group entity to do it, such as recreational lands, civil rights, property rights, etc. And there are many things which our government has never embraced (e.g. universal health care), but should. It was precisely these kinds of issues that Rousseau talked to.
What FDR set in place was a structure intended to prevent the unfettered gambling, that the financial system will forever be, from setting a fire that will only burn it out. As we can now see, regulation failed because there’s always pressure to let that perennial flame burn brighter and, eventually, that pressure will wind up removing the constraints. After that, it’s just a matter of time. It’s not transparently obvious to me that the only way to avoid such a thing happening again is to take the attitude that “If it’s too important to fail, then it’s too important to be owned privately,” but this crisis is certainly a pretty good argument for that position.
But in all the bruhaha accompanying the financial news–in all the stress each of us is apt to feel personally as the economy comes to roost on our doorsteps–let’s try not to forget the single most obvious entity that’s far too important to fail: Gaia, Nature, The Earth–Whatever you choose to call Her–is more important than anything. Human caused global warming is real and even a depression won’t make it go away. Quite the opposite. A depression might drive it from our minds until its consequences explode in our faces, killing, not saving, the planet. We must not let Gaia fail, for Her fate is ours. Whatever hardships we find ourselves in in the next few years, let’s not take our eye off the most important thing of all. Despite all of this, we must stay on the task of preserving the environment.

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20 Responses to Too Big To Fail

  1. Nikki Florio says:

    Excellent, George.

  2. Brian says:

    Hi George!

    Busy-busy here still – but I just wanted to take a moment to provide a simple answer to your Bush dilemma below. Bush has always been a social conservative and economic liberal. As partial proof, consider his massive deficits – they give economic (Reagan) conservatives far greater fits than his crazy socialist bailout plans.

    Problem solved, the world remains in synch. 😉

    Cheers,

    – Brian

  3. Daniel says:

    Hello George,

    I should probably refrain from commenting on your email. People don’t seem capable of understanding each other on the question that you raise at the beginning.

    I am not entirely sure how I will vote, and I don’t really care to argue the case for or against candidates like Ralph Nader. However, I know with absolute certainty that the people who will be voting for him do not consider that they are “throwing away” their vote. To say this is to show arrogance and contempt, to betray a dismissive unwillingness to accept that none of us has an infallible grasp on what is best under the circumstances. Surely you can believe that all of us are doing our best to do the right thing as our lights lead us – even those who will vote for Nader again in this election. I may add that I regard the treatment of these people to be an indelible blot on the progressive movement that needs to be understood and remedied, else it will fester like a sore that will not heal. Such comments as yours do not contribute to a cooperative attitude among progressives of all stripes, which will be essential as we go forward, even if the corporate tool and war-monger Barack Obama is elected.

    By the way, the Paulson bailout is NOT an move toward socialism. Corporate control of the economy, with government acting as protector and support, is conventionally understood in political science as fascism, not socialism. These terms have established definitions of long-standing, and require no revision.

    All the best,
    Daniel

  4. Howie says:

    Hey George are you aware that a democratic congress voted in the “everyone should have a home” even if they can’t afford a home and therefore we should mandate banks to create a system and a financial/morgage plan for people that low and behold would eventually cause this crisis? Careful where you try to put the blame. Sometimes its the democrats.
    Howie.

  5. George says:

    All: The three comments above (Brian, Daniel and Howie) were copied here by me after receiving them at my e-mail address. I haven’t time to give adequate responses at the moment, but encourage anyone reading these to do so. The comment that was at the start of the e-mail anouncing this entry, but that is missing in the blog itself (Daniel’s comment) was

    “Be sure to get out and vote, and, please, don’t throw away your vote on a third party–you’ll only hurt the leading party that is closest to your point of view. Sad, perhaps, but true, and a function of the fact we have a republic not a parliament. But this election is too important to abstain.”

  6. Dallas says:

    My father (a Superior court judge and libertarian at heart) used to stress the fact the we have a “republic”, not a “democracy”. The most visible fact that supports his view is the electoral college, an all or nothing tally which gives greater weight to the smaller states, due to their dis-proportional number of electoral votes. The electoral college is a strong underpinning of the two-party system. Third party protest votes are mostly relegated to symbolic significance, except when the two major parties are so close as to make the third party’s vote the deciding factor. Personally, I prefer voting to effect the desired result, even “the lesser of two evils” rather than indulging in a symbolic vote that might tip the election to the “greater” of two evils, as in the case of Bush vs. Gore, as affected by the Nader voters.

  7. Hank says:

    Our electoral system made sense when it was invented because electricity and telecommunications hadn’t been invented. Electors had to ride on horseback to vote in the electoral college. However, once telecommunications were invented, the electoral college became obsolete. However we’ll never get rid of it because small states with a disproportionally high number of electoral votes will never agree to get rid of it. Also, neither major party wants to get rid of it because it helps maintain the 2 party system. A different system would encourage third, fourth and fifth parties. As Dallas and George have said, voting for a third party candidate only helps the candidate that you like the least, the one who is the “greater” of 2 evils.
    -Hank

  8. Jim says:

    Interesting discussion and some strange comments from Obama being a corporate tool and war-monger to telecommunications making the electoral college obsolete.

    Oh, I guess they’re just joking.

    – Jim

  9. Jim says:

    Since Fascism was mentioned I thought the following link was appropriate. The following quotes are found there.

    It is important to note that the definition of “corporation” in Fascist terms is different than the definition used in the U.S and EEC.

    Reading the information on this link I get the idea that a single definition of Fascism is not at all well established. In fact, definitionS of Fascism have changed over time and have been revised repeatedly.

    http://en.wikipedia.org/wiki/Fascism

    “Corporatism generally refers to a political system in which economy is collectively managed by employers, workers and state officials by formal mechanisms at national level. [58] In such system capital and labor are integrated into guilds, known as “corporations” (not the same as contemporary business corporations), that represent economic, industrial, agrarian, and professional groups. These associations are obligatory bodies with a strict hierarchy; their purpose is to exert control over their respective areas of social or economic life through class collaboration. As a concept, corporatism is closely liked with syndicalism.”

    “Fascist corporatism opposed what it deemed the excesses of laissez-faire capitalism and statist socialism. Unlike laissez-faire capitalist systems, fascist corporatism involved significant government intervention such as regulations, objectives, and nationalization of certain enterprises. Unlike statist socialist systems, fascist corporatism for the most part protected the right of private property and allowed significant independence for private free enterprise except in areas deemed vital to the national interest where private enterprise was not able to meet economic expectations of the state, in which such enterprises were nationalized. In Italy, the Fascist period presided over the creation of the largest number of state-owned enterprises in Western Europe such as the nationalization of petroleum companies in Italy into a single state enterprise called the Italian General Agency for Petroleum (Azienda Generale Italiani Petroli, AGIP).[73]”

    Jim

  10. George says:

    Okay. Some time for responses, finally. In order:

    Nikki: Thanks.
    ***
    Brian: Yours is the most supportive of the responses I’ve seen so far of the main target of my piece, Ronald Reagan. That Surprised me, for he’s still held up as an icon to be prayed over by a vast number of people and, as yet, is pretty much unassailable in the media. But everything you said in terms of Bush’s budgetary habits is, I think, as true of Reagan as it ever has been of Bush (prior to the buyouts, at least). Reagans deficits were records, too, as I recall.

    Perhaps the hardest thing for any of us to get is that it’s not what a politician says, nor, especially, how he/she says it. It’s what they actually do.

    But “liberal” doesn’t strike me as right either. The idea that “liberals are extravagant” is, I think, one of the many slogans that the right wing has quite successfully been using to slander a rather complex opposing philosophy by completely distorting their own position with attacks on their opponents. For example, when McCain accuses Obama of wanting to raise taxes, he’s emphasizing what Obama would do to the wealthy while doing the opposite for the middle class. Technically, since the Bush administration has already done it, McCain can claim not to be doing exactly that in reverse by prolonging Bush’s tax scheme. McCain’s policies will continue Bush’s system of raising the relative cost of government to the middle class while diminishing the portion borne by the wealthy. What role the deficits play, other than to raise the eventual costs to everyone, is opaque to me.

    But, either way, I think it a mistake to think that Spending a lot of money to benefit the wealthy is either liberal or a good thing, despite the Republican mantra that it will inevitably filter down to the poor.

    I wish I could be so optimistic: I dont think this is anywhere nearly solved. I expect things to get very hard. Long ago I began to suspect that one byproduct of capitalism was periodic depression. That’s where I think we’re going now.
    ***

    Daniel: I think my first comments, i.e., those suggesting that a third party vote is a “throw away” are the most important of the entry, and especially so in the present election. I don’t think the problem is one of not understanding those who choose to “throw away” their vote. I think it is disagreement, based, at least partially, on differing opinions on what is and isn’t important, especially in the context of the system within which we operate.

    I understand that those who do it don’t consider it “throwing away” their vote. I just think they’re wrong. In a Parliamentary government I wouldn’t say that, but in the republic that America is, it’s just a fact. We have a number of provisions in our constitution making it hard for the people’s will to be honored. Some are on purpose, and whether they are wise or not is the subject of considerable debate. But the propensity for our government to discourage minor parties wasn’t intentional and is mostly supported by the two parties that are currently on top of the heap.

    Independent of where the support comes from, though, the bottom line is that, since ours is a “winner take all” executive branch, the party in power following an election, needing no support from coalitions with minor parties, has is no incentive to appeal to minority interests. As a consequence, having no chance to be in power after an election, the only power third parties have in this country is *before* election day, when they could conceivably throw their weight behind one of the major contenders. On election day, any minority party on the ballot only draws away votes from the party most apt to be receptive of movement in the direction the third party would like to go. That means their presence only makes it harder for their ideas, or anything like them, to ever become policy.

    Okay, I was wrong. “Throwing away” isn’t strong enough. It’s voting against your own best interests. Frankly, I think it’s stupid.

    That said, I do understand the reason many perfectly intelligent people choose to do it anyway. Or, at least, I think I do. Many people, yourself included, if I understand you at all, just believe there is no difference between the two dominant parties in American politics. Again, although I can understand their frustration at the similarities between the two, I definitely disagree.

    Anyone who thinks the direction this country has taken under a Republican administration since 9/11 is, in any way, similar to what would have happened if the Democrats had come out of the Florida debacle of 2000 in the white house is simply not paying enough attention to national politics. And believe me, it’s better not to name Bush and Gore, for this is about differences in Republican administrations and Democratic administrations. It’s virtually irrelevant whose name is at the top of the ticket. But it’s far from irrelevant which party has the power.

    It may be arrogance to say my understanding is correct and someone else’s is wrong. But, if I *am* right, then it’s a virtue, not a vice, and I’ll remain faithful to it, despite your attempt to borrow the techniques of the right wing to silence dissent. I’ve watched it stymie their opposition for too many years to bow to bull s-word intimidation. I’ve never backed down from the term “liberal” and I wish others hadn’t either. Nor shall I back down from voicing an opinion different from yours, whether you think my holding it is “arrogant” or not. I firmly believe anyone who doesn’t vote Republican or Democrat in the current election under the current conditions is throwing his/her vote away as surely as if they hadn’t voted at all. And I think it matters.

    As far as contemptuous. Yeah, I am that. I’m sick of all the idealistic crap that’s kept the power for so many of the last forty years in the hands of pragmatic politicians with whom I and most of those spewing the crap disagree. If you want to see ideals come to pass, you better get pragmatic.

    As for remedy, I think the idealists need to actually analyze whether they think their “let’s all go our own way” mantra has gotten them to anywhere good. My god, America is torturing people! Is that what you wanted? Obviously not, and I don’t mean to start (or continue, if that’s more accurate) a flame war. I just think accusing the pragmatists of being a “blot” deserves a little fire back. I *do* blame Nader for a substantial part of George Bush, and I’m *really* sick of the “true liberals” not owning up to their part in it. If you guys hadn’t had your heads so stuck on “principle” we’d have had a much more rational response to Bin Laden, one without most of the horrors of the past seven years.

    I think it’s time for the “true liberals” to think about cooperating a little bit with those who prefer having their hands on the tiller rather than to continuing to shout at the wind to blow from the rear of the boat.

    As for Obama bashing. Come back and complain after he serves at least one term, unless you’d just rather be certain of your ability to complain at the end of McCain’s about the unjustifiable fact that Nader ain’t going to be there. He ain’t, so that’s a safe place to go to the polls from. And, yeah, I’m contemptuous of it. Guilty as charged. But I’ll not apologize for it, cause I think I’m right. Politics, like torture, is about power. And talking about idealism, while it may have it’s place, isn’t going to change either our politics or our torturing in the face of a close election like this one. (Don’t try to promise me that McCain would never tolerate torture. The Republicans started it, McCain’s demonstrating right now some of what he’ll do to lead that party, and you’re going to have to convince me that Palin wouldn’t tolerate it anyway, if you want to make that argument, for she’s *very* likely to be president if McCain gets elected.)

    Oh, and don’t get me started on the difference you’ll see in the supreme court.

    As for fascism, I’m looking into it, and may have more to say at a later time. thanks for bringing it up.
    ***

    Howie: I’m not particularly familiar with the legislation you mentioned, but it wouldn’t surprise me if there’s at least some truth to it. As I mentioned, Reagan’s chant of “Government is the Problem” made it impossible for any politicians to run against the grain of unfettered capitalism. As to whether the Democrats (plus the President) “forced” the banks to make loans that they didn’t want to make, I don’t buy that. If there’s any truth to that, why hasn’t throwing money at them to free up credit done it? Sounds like one politician, or side, trying to discredit the other to me.
    ***

    Dallas: I agree with what he said, everybody.
    ***

    Hank: Obviously I’m with you, too. The electoral college vs direct vote is a bit more nuanced than that, I think, though. The tyranny of the majority might be far more likely. Some sort of safeguards might be needed. Perhaps a topic for a later entry.
    ***

    Jim: Trust me, only Brian’s entry may have had humor intended. But, just to be sure, if people joke hereon, in the future, please say “ha, ha” Thanks.

    As for the wiki reference, that’s part of why I’m reserving judgment on the topic and holding it for another entry. I totally agree this is an interesting discussion, and urge everyone to keep it up. Sorry if I did sound a bit “flamy” before. This stuff is hard, and I’m not trying to disrespect anyone. We all have strong opinions on this kind of stuff. And we’re all entitled to them, including their strength, usually. Let’s just try to give our reasons for those opinions from an “I think… and here’s why…” position as much as possible.

    George

  11. Jason Held says:

    ON THE NATURE OF MARKETS AND EVIDENCE:

    Once upon a time there was a turkey. And the turkey’s happiness depended on events of the day before. Every day the turkey would wake up. Every day the turkey would find food in it’s tin. Every day the farmer would go to meet the turkey and put more food in the tin.

    And the turkey was happy.

    And every day, when the turkey saw the farmer, the turkey knew it would be a good day and became even happier.

    So over the year, the turkey, basing it’s happiness on the day prior, would get incrementally happier and happier. It was pure bliss to see that farmer.

    On thanksgiving day, the farmer came to meet the turkey, and the turkey with enthusiasm emerged to greet him.

  12. Daniel says:

    Well, on the other hand, George, I do love passionate people.

    As I said, I don’t personally care to discuss or debate the Obama question. Did you suppose I hadn’t heard your arguments before, by the way. I addressed myself to how we behave when we find ourselves disagreeing with each other. Contempt? Somehow I can’t believe you have contempt for me, even if you express it.

    Jim: You make a very good point. Fascism is a diverse political phenomenon, and cannot be easily schematized. However, as theoretical constructs, the difference between fascism and socialism turns on who is in power. And, of course, communism represents an entirely separate theoretical category, again with a different ruling power. Of one thing you can be absolutely sure – and this is the only point I wanted to make – when bankers are in control of the government, it is the farthest thing from socialism.

  13. Jim says:

    Dallas {ed. note-I think he means “Daniel”}: I just can’t agree completely with your characterizations of the relationships between fascism, socialism and communism.

    Pure socialism deals with how society and economics should be structured in relation to each other.

    “All socialists advocate the creation of an egalitarian society, in which wealth and power are distributed more evenly, although there is considerable disagreement among socialists over how, and to what extent this could be achieved.”

    See http://en.wikipedia.org/wiki/Socialism for above quote.

    Communism is generally considered to be a branch of socialism so it isn’t an entirely separate theoretical category.

    Facism is a political ideology that puts the nation or race above all else.

    Of course, in practice each of these has many variants on both economic and political fronts. It can all be very confusing especially if a person doesn’t have a strong background in the political and social sciences. I include myself in that category and I’m not including you since I don’t know your background.

    The link below is also appropriate for this discussion:

    http://en.wikipedia.org/wiki/Communist

    I’m not sure what to infer from your statement about bankers being in control of the government. However, in light of the current economic crisis I can guess that it has something to do with the economic rescue package from the government that unfortunately has been categorized as a bail-out of wall street.

    If that is the connection, then it is a very remarkable strech.

    Jim

  14. Jim says:

    George: Regarding Howie’s contention that banks were forced to make bad loans I have to concur – at least partially.

    During the Clinton administration the idea of increased home ownership took hold. To effect this increased home ownership some legislation was passed that may not have “forced” financial instutions to make bad loans but certainly strongly encouraged them to do so.

    All of this certainly had a noble goal and it is true that increased home ownership is good for the economy and for society. However, as is always the case, the law of unintended consequences can arise.

    I don’t know the details of the legislation that was passed but the result of it was that the unregulated mortgage broker industry sprang up. Along with that banks loosened their underwriting standards. Also, the GSE (Government Sponsored Entities) agencies Freddie Mac and Fanny Mae were required by legislation to buy loans from the banks that were originated with these lowered underwritting standards.

    These lower underwriting standards allowed banks and mortgage brokers to qualify borrowers with 1) poor credit scores, 2) borrowers who didn’t have to verify their income (“no doc” loans), or 3) allow borrowers to refinanced at 125% of the value of their home.

    Since the GSE agencies could now buy these risky loans from the entities who originated them, there was no risk to the originator. And, by the way, the originators collected very nice fees for making the loans. So now you have the situation where there is no financial risk to the banks and very nice profits accruing to them. Hence the banks had a very strong incentive to make as many bad loans as they could.

    This all worked very well for a time while banks made big bucks with no risk, people got into homes that they couldn’t afford, and low quality mortgages were bundled up into MBS (Mortgage Backed Securities) financial instruments and sold to “really smart” investors.

    Everyone is making money or getting into their dream home or both and everyone is pleased as punch. That is until housing prices start falling rapidly, interest rates rise, CDO and MBS security values have to be marked to market, credit freezes and large financial instutions headed by “really smart” CEOs go bankrupt because nothing has the value it was supposed to have.

    Of course, this is only one part of the reason we have the current credit crisis. It is true that Republican congreses have played a major role in the deregulation of the financial industry. One of the biggest factors in that deregulation is the repeal of the Glass Steagall Act which was spearheaded by Phil Graham and burried deep in legislation that passed in the 11th hour of the last days of the Clinton administration.

    http://www.associatedcontent.com/article/1042593/repeal_glasssteagallstiegel_act.html?cat=3

    Nor is this financial crisis we’re in the sole responsibility of the government. There were plenty of unqualified borrowers more than happy to get mortgages they knew that they could not afford or happy to refinance 125% of the equity in their homes and spend the money on vacations, big screen TVs, and SUVs.

    Investors in the markets saw company profits rise and the values of their stock portfolios increase because the economy was booming in part thanks to rising home values.

    As I said at the beginning, banks may not have been forced to make bad loans but it is my understanding that there was legislation passed to force the GSE agencies to lower their underwriting standards and buy loans of questionable quality from banks. As I understand it, Barnie Franks (a Democrat) was behind that legislation. However, I don’t think the Republican side of Congress protested much.

    As usual when people discuss topics that have political overtones, you and Howie seem to have let your politics color your views here.

    As to your question George: “If there’s any truth to that, why hasn’t throwing money at them to free up credit done it?” the answer is that you don’t unfreeze a credit freeze up over night. It takes time for the money allocated to be distrubted and work its way into the financial system and economy. That is now starting to happen and you can see from the narrowing of credit spreads, a lower LIBOR rate, and the resumption of commercial paper borrowing.

    Jim

  15. George Relaying an e-mail says:

    {Editor’s note: This comment was sent directly to me and the author declined to enter into a discussion on the blog, so I’ve elemenated his name below. But I thought the comment, especially in View of Jim’s prolonged explanation, worth including anyway}

    George I have followed the discussion of Too Big to Fail with interest. Trust the guy who said the government forced banks to make loans they wouldn’t have[community reinvestment act]. Then the bankers being bankers figured out how to get them off their books by securitizing these loans and selling them to investors The banks couldn’t hold these loans because of regulators limits on interest rate risk. This applied to all real estate loans not just CRA loans. Freddie and Fannie made money,people who didn’t qualify for loans got them , politicians got donations and votes. Life was good.

    Plenty of blame to go around.
    Annon

  16. Daniel (from an e-mail reply to all, not previously posted to the blog) says:

    {Editor’s note: This was first sent to the list on the original e-mail alert list and not posted here. I hadn’t responded because I hadn’t realized it had been sent to all, and didn’t think it requiring a response otherwise, as things were clearly deteriorating into a flame war. A reply will, apparently, have to be made now that I realize Daniel chose to go larger with his blast than I’d thought he had, though, so stay tuned}

    Hello George,

    I read your blog post last night and wrote a short reply. But this morning I’m thinking about it again, with a different sense of what it means for me, and I almost feel that I’m obliged to let you know what I’ve concluded.

    It might have been helpful if you had given more credit to what I said at the beginning of my first email to you last week. I said that I hadn’t decided how I was going to vote. This was true, believe it or not.

    My problem in deciding was that I’d already heard the arguments on both sides – from a progressive point of view, for and against Obama – a hundred times over, and still found myself unsure. I am not by nature indecisive, but both sides have, it seems to me, valid arguments, yet without any one being absolutely conclusive. It seems I still needed some sort of push or draw one way or the other.

    Your response to me, being viciously angry, disrespectful, rather pompously dictatorial in spirit, and, yes, also contemptuous in word and tone, reminded me that I have long been noticing in progressive Democrats the very same mentality that we have suffered under for so long from the evangelical right. I have nothing in common with that strain of progressivism.

    To a very great extent, my feelings about this are very closely related to how I view issues of war and peace – for your comments were, I daresay, violent. Yes, violence can be wreaked with words, too. And there is a continuum between violent words and violent acts, as in war. I remember in the past only off-hand comments of yours with respect to your fears of Islam and the rightness or wrongness of our barbaric national wars against it, and so I realize that I don’t know enough about your view to comment. Still, I suspect that your view is of a violent piece with the self-righteous certainties that you express as a supporter of Obama. Indeed, the terrible despair with which I have become aware of progressive support, among Democrats, for the war in Afghanistan – most notably in their candidate, Obama – has led me to believe that this is but one more measure of what the Republican Right and the Democratic Left have in common (to the ultimate peril of us all) – they share a kind of spiritual affinity, little as they are capable of seeing it in each other. The moat is never in our own eye.

    I should add that I regard the war as the paramount issue of the day. It seems to me that people do not begin to understand that America’s wars, whether administered by Republicans or Democrats, will inevitably end in tyranny and the utter destruction of our nation. We are seeing this play out even now in the collapse of our economy. The founders of the Republic understood to a man that standing armies are death to a republic, and they wrote extensively on the incompatibility of militarism with liberty. Their philosophical grounding in the realities of history was of course beyond reproach. In this light it is quite obvious how meaningless an Obama victory may be, but to understand this you may have to broaden your perspective from very narrow immediate concerns that you have expressed – looking at history not just as a record of yesterday and the day before at most, but as a process unfolding over decades and centuries. You might then begin to see President Nixon as a gift to the nation from LBJ, President Reagan as a gift from President Carter, President Bush as a gift from President Clinton; and you might then ponder who will be Obama’s gift in another four or eight years. We should marvel at how the pendulum swings, while time stands still. Political time, that is. Time for the planet has in the meanwhile unwound mercilessly.

    In any case, I said that I felt almost obliged to write because it surely ought to be helpful for people to know how effective they have been in interactions of this sort. Surely we all hope to be effective in the sense that we may be able to influence other people to do what is right, as we see the right. Thus, you may need to know that you have been the decisive voice in the process of making my own decision.

    You have succeeded by your approach in canceling your own vote for Obama. I will be voting for Ralph Nader. I have decided at last with your help.

    Sincerely,
    Daniel

  17. Hank (From an e-mail reply to Daniel) says:

    You might as well not vote for president Daniel. You should let the issues be your guide, not something someone said that offends you. Too many voters let personalities get in the way of making good decisions. I guess it doesn’t really matter anyway unless you’re in a swing state. Those are the realities.
    -Hank

    {Editor’s note: Daniel is, in fact, a resident of a swing state. My point, by the way, is that Daniel’s decision to vote for Nadir (sp?) is not equivalent to his choosing not to vote at all. It is equivalent to his choosing to vote against the candidate from the top two for whom he was leaning prior to the decision to go with the minor party candidate. It is equivalent to shooting himself in the foot on purpose. It also has the perverse effect of further detracting from the Green Party (Is Nadir still in the Green Party??), for not voting would, at least, not throw discredit on the Green Party’s role in the election. Assuming, of course, that it does, in fact, have a role.}

  18. Jim says:

    George: In response to the comment from Annon I offer the following:

    http://www.rightsidenews.com/200810302417/editorial/government-forced-bad-loans-and-the-cra.html

    A read of this will, I believe, validate my point that banks were not “forced” to make bad loans.

    Annon has referenced the “Community Reinvestment Act” of the Carter Administration as the legislation that forced banks to make bad loans. This is a mischaracterization of the act. What they were “forced” to do under the CRA is stop the discriminatory lending practices which some have called “redlining”.

    Here is a link from the extreme right that is typical of the “banks were forced to make bad loans” argument:

    http://forums.hannity.com/showthread.php?t=929751

    Here is a link from the Justice Deparatment about the case.

    http://www.usdoj.gov/opa/pr/2004/July/04_crt_478.htm

    Notice what Sean Hannity conveniently left out: “The complaint alleges that statements by First American officials indicate that the Bank’s business practices were racially and ethnically motivated.”

    Do you see anything in these statements form either link that indicates the lender, First American, HAD TO MAKE bad loans? No you don’t.

    In fact, part of 2) above was designed to guide borrowers to information about non-preditory loans specifically designed for low income people or people with credit problems. It is designed to help keep people out of loans that they cannot afford.

    What you do see here is a statement from Hannity that “Banks taken to Court Forced to make Bad Loans”. Then he posts a version of the Justice Departments press release as support of this. Even though the JD’s press release does not support this, he relies on prejudice or preconceived notions about minority communities and the reader’s unwillingness or inability to think critically to convince them of the “truth” of the statement.

    Here is what Hannity is counting on people thinking: Minority communities are populated by low class, low income people who have poor credit. They have higher crime rates and high unemployment. They are, by virtue of living in a minority community, of questionable character. Therefore, any loan made to a person in a minority community is by definition a bad loan.

    Jim

  19. Jim says:

    George – just a quick correction to the above. When I said “In fact, part 2) above…” I was actually referring to the 4th bullet point in the Justice Department’s press release.

    Jim

  20. Jim says:

    {Editor’s note: there was a comment here that is now posted under the blog entry on “throwing away the vote.” Please go there to read it and my response. Thanks. George

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