Greediest of the greedy are putting the everyone's money at risk. Will we ever learn?
Here we’ve been worried that, by playing games with the debt ceiling, House Republicans would destroy the global economy. Now it looks like world bankers will beat them to it. As conservatives are fond of saying, there’s nothing the government can do that free enterprise can’t do better.
We become so titillated with the alleged corruption of Donald Trump that we tend to overlook his florid incompetence on plain vanilla issues of public policy.
It was his administration that allowed Norfolk Southern to cut corners on railroad safety, turning a small Ohio town into a miniature Chernobyl. And it was his administration that rolled back Dodd-Frank, a major piece of reform legislation drawn up a dozen years ago to prevent bankers from acting stupidly.
But for someone who had zero public policy experience coming into office, perhaps we shouldn’t be surprised. What is surprising over the past half century is our increasing propensity to ignore failures, or even treat failures as successes in need of replicating.
We have almost lost count of the times Congressional Republicans have stampeded into office, threatening to blow up the American economy if their demands were not met. Every time, from Newt Gingrich on, it has had disastrous results for the GOP. So what is the first thing this newly elected House majority has threatened to do? You guessed it.
So what if 10 other people have jumped off a building to their deaths; unlike them, we’re sure we can fly.
For 40 years, we have acted on the notion that tax cuts will lead to economic growth. They never have, because instead of investing in the future, corporations use these windfalls for stock buybacks, debt repayment or anything else that will benefit shareholders.
CEOs’ primary mission is to benefit shareholders, not the American people — yet we continue to be surprised when they essentially do what they are paid quite handsomely to do.
Through our history, we have typically shown capacity to learn from our mistakes. Decentralized banking, Prohibition, ’60s-era urban renewal — these public-policy faceplants were recognized for what they were and ultimately reversed.
Today, clear-eyed analysis and the ability to learn from mistakes are at best tortured. What we failed to learn from Vietnam manifested in Afghanistan and the Middle East. It should have been clear 20 years ago that the “war on drugs” was going nowhere. Yet we are only now taking small, tentative steps toward shifting course.
In the 19th century it was men like Cornelius Vanderbilt and J.P. Morgan — proud, card-carrying members of the robber baron club — who came to the rescue of the American economy, at great risk to their own personal fortunes.
Those were the railroad presidents and bankers of yesteryear. Vanderbilt wouldn’t have properly maintained wheel bearings because he was concerned about the health of the people living in rural Ohio towns. He would have maintained his trains so as not to pay the massive expense of derailment cleanups.
Morgan seems unlikely to have trafficked in crypto currency without someone first offering solid proof that it was good for something beyond pure speculation.
As Lehman Brothers and Bear Stearns were going down the flume 15 years ago, a side of capitalism materialized that we had never seen before: a complete indifference to the future. Those trading subprime mortgages that were guaranteed to fail didn’t care about tomorrow so long as they were making money today.
It might have been recognized that undoing prudent banking regulations in 2018 would have consequences, but those consequences were somewhere down the road. Maybe we should be grateful that it took a full five years before banks were up to their old tricks.
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One last irony on the cake is that the rage over bank bailouts in 2008 led to the tea party, which led to MAGA, which led to a deregulation of the banks which led to the bank failures and subsequent bailouts of this past week.
This is too nuanced for, say, a member of the Proud Boys to understand, so the bailouts will certainly be used to fuel right-wing anger, even though the bailouts were necessitated by right-wing deregulation.
Unfortunately too, there never seem to be enough adults in the room to enforce the idea that capitalism is a system of economic production, not a game to accumulate as much cash as possible through glorified accounting tricks, while providing nothing of value in return.
Our modern banking system was essentially established during the Civil War. We have a little history to go on. But this isn’t dissuading the greediest of the greedy and their congressional enablers from putting the money of everyone in this nation at risk. Maybe one day we’ll learn.
Tim Rowland is a Herald-Mail columnist.
This article originally appeared on The Herald-Mail: Banking bailout proof Republicans don't learn from their mistakes