We have been wondering for quite some time why WallStreet hasn’t come under much more outright criticism (not to say backlash) from the public. Apparently, we’re not the only ones..
Goldman Sachs and “War Profiteering”
By Martin Sieff | Thursday, October 22, 2009
The prospect of Goldman Sachs awarding record bonuses in the wake of the financial collapse has the potential to incite a broad-based populist backlash, argues Martin Sieff. He explores how Wall Street has roused the public’s ire in much the same way as did war profiteers in 1920s Weimar Germany.
hy doesn’t Goldman Sachs order its senior executives to wear silk top hats and 19th century long jackets with tails, and encourage them to kick beggars in the street with cable TV news teams covering them? They seem to be doing everything else they possibly can to discredit the capitalist system and make it despised after it has done so much to enrich the world.
Today’s Country and Western music echoes the fierce anger in popular culture in 1920s Weimar Germany towards war profiteers.
On October 15, 2009, Goldman Sachs chief executive Lloyd C. Blankfein confirmed that its annual bonus pool had soared above $23 billion — the highest figure for bonuses in the company’s history and double the 2008 figure.
The discontinuity between the good times on Wall Street and the woes on Main Street is striking: The U.S. unemployment rate is now at 9.8% and likely still climbing, and the ratio of the employed to the total U.S. population is at the lowest level in a quarter century.
This has not gone un-noticed in American popular culture. One of the biggest Country and Western music hits of the past year, sung by John Rich, has the evocative title, “Shuttin’ Detroit Down.” It had the even more revealing and politically charged lyric, “They’re livin’ it up on Wall Street in that New York City Town / “But in the real world, they’re shuttin’ Detroit down.”
Country and Western music is not usually a medium of social protest in the United States. It is highly patriotic, socially conservative and celebrates family values. The huge success of Rich’s song, however, echoes the fierce anger in popular culture in 1920s Weimar Germany towards the major business figures who were popularly perceived as having profited from the horrors and heartbreaking losses of World War I.
The memory of that torn social fabric, the pain and anger it generated and the chasm of cynicism and dangerous radicalism it opened up, can be seen in the searing caricatures of George Grosz and Otto Dix. Substitute “banker” for “war profiteer,” and John Rich’s audience would understand.
The United States has only experienced small and remarkably easily contained strains of populist working class resentment over the past century. Most of the populist passion was successfully channeled by the two most politically successful and influential presidents of the century: Resentment of so-called war profiteers played a surprisingly large role in American politics in the 1920s and early 1930s.
Franklin D. Roosevelt in the 1930s during the long, drawn-out recovery from the Great Depression, and Ronald Reagan following the oil/energy price shocks and the collapse of much of U.S. manufacturing and heavy industry in the late 1970s and early 1980s.
So far, indeed, the political ripples from the worst U.S. financial crisis since the Great Depression and the worst jobs crisis in a generation have been remarkably mild. As far as the two venerable parties on Capitol Hill go, it’s business as usual.
Republicans are confident they can make major gains at the Democrats’ expense in the November 2010 mid-term congressional elections. The Democrats are focused not on bold, long-term reform programs, but on looking statesmanlike, reassuring and moderate to centrist voters and containing the GOP drive.
Neither party as yet widely fears any popular, angry surge of white working class and lower middle class voters driven into hard times by the failure of both Bush- and Obama-era policies.
However, if things don’t get better over the next year and the executives of Goldman Sachs and their colleagues keep handing out more billions to each other, that may finally change.
Washington has bailed out many, though certainly not all, of the sinking financial institutions and banks of Wall Street after the great financial crisis of September 2008. Trillions of dollars of taxpayers money was printed and poured into the effort. President Barack Obama gave the bailout his own stamp of approval, making veteran Wall Street insider Timothy Geithner his Treasury Secretary and keeping Bernanke on for another term at the Fed.
If the domestic economy recovered under Obama, this cautious, centrist, conventional behavior so typical of the president would have been acclaimed as the epitome of wise statesmanship. But the economy has not recovered in terms of reducing the unemployment figures.
The United States has only experienced small and remarkably easily contained strains of populist working class resentment over the past century.
The hemorrhaging of U.S. jobs has, if anything, only accelerated under Obama. Even Bush never had to contend with 10% unemployment rates such as the American people are on the brink of today.
In such a climate, the continued self-aggrandizement of the Wall Street financial elite to the tune of multiple billions of dollars at a time — right after they have been bailed out by trillions of dollars of government money — runs the risk of creating a bitter, broad and long-lasting reaction.
Resentment of so-called war profiteers played a surprisingly large role in American politics in the 1920s and early 1930s. It helped create the climate of isolationism that kept the United States far from any desire to use its vast weight to stabilize or rescue Europe in the fateful decade of the 1930s when Adolf Hitler, flanked by other fascist dictators and demagogues, came to power.
So deeply felt was the hatred of war profiteers that Republican Congressman Fiorello LaGuardia of New York famously tried to push through legislation mandating the death penalty for them. He failed, but his effort didn’t hurt his political career.
Neither party as yet widely fears any popular, angry surge of working class voters. But if Goldman Sachs keeps handing out billions in bonuses, that may finally change. He went on to become a three-term mayor of New York City, and arguably the greatest in its history.
As mayor, LaGuardia, although a Republican, became one of the most powerful and important allies of President Roosevelt in pushing through the financial system and social security reforms of the New Deal.
LaGuardia understood that FDR was not demolishing capitalism, but rescuing it from the excesses, greed and reckless stupidity that had brought on the Wall Street crash and the Great Depression.
Far from preserving or defending capitalism, the executives of Goldman Sachs and their Wall Street colleagues are discrediting it in ways that Marx and Lenin would gleefully applaud.