Thomas Frank on "Feigned Outrage" (from the WSJ)

Those who followed news coverage of the "tea party" protests last month will recall that one target of the partiers' ire was the TARP bailout of the banking system -- a policy of the Bush administration that President Obama has carried on.

And yet, in a television interview last month, we find no less a representative of the late administration than former Vice President Dick Cheney endorsing the protesters' accusations with what is, for him, considerable enthusiasm. "I thought the tea parties were great," he told Fox News's Sean Hannity. "It's basically a very healthy development."

Former House Speaker Newt Gingrich, one of the Republican Party's few remaining stars, has also cheered the public's willingness to "fight back against Wall Street and Washington insiders."

A Republican who wants to fight Wall Street! A Bush official who thinks protesting Bush policies is "great"! Contemplating these curiosities, we begin to realize how easy it has been for conservatives to swing back into full-throated opposition only months after their cataclysmic defeat. And also to understand why the obituaries for the GOP might be just a tad premature.

After all, there's something about conservatives' ferocious "No" that precisely fits the temper of the times. For all the past year's Democratic victories, the GOP still owns outrage, still has an enormous capacity to summon up offense, to elevate every perceived slight into an unprecedented imposition upon both the hard-working citizen and freedom itself.

What really dazzles the observer, though, is conservatives' fury over things for which they are themselves responsible.

As an example of this habit of mind, consider the essay that Mr. Gingrich published in Human Events last week. "The current liberal bloodlust over interrogations," he wrote, referring to the Nancy Pelosi-CIA flap, is merely "the Left's attempt to hunt down and purge its political opponents." And yet, in a different essay he published on the very same day (this one in the Washington Times), Mr. Gingrich regretted that, in all the years of Republican rule, "there was a strategic failure to root out the left and the special interests of the left."

Mr. Gingrich's side failed to "root out" and destroy their opponents; now he imagines that this is what is being done to his team.

Psychotherapists might call this "projection," and something similar pervades the essay the remarkable Mr. Gingrich published only two days later in the Washington Post. Here the former speaker can be found calling for a populist revolt in the "great tradition of political movements rising against arrogant, corrupt elites."

A healthy sentiment, to be sure, except for the fact that "elites" are exactly what decades of conservative rule gave us by unleashing the banks, smashing the unions, and funneling the economy's gains into the hands of the rich.

Then there are the "lobbyists" whom Mr. Gingrich accuses of running state governments here and there. By this he means "lobbyists for the various unions" who get their way "through bureaucracies seeking to impose the values of a militant left."

Even so, rule by lobbyists is a subject Mr. Gingrich should know well. It was while he was House speaker, for example, that his No. 3, Tom DeLay, launched the famous "K Street Strategy," which sought to make Gucci Gulch the exclusive preserve of the Republican Party.

It was Mr. Gingrich's own beloved House freshmen of 1994, the last bunch of conservative populists to come down the pike, who made the Republican Revolution into a fundraising bonanza. And it was public outrage over the conspicuous purchase of government favors by the moneyed that led to the Democratic triumphs of 2006 and 2008.

Turning to the government of New York state, Mr. Gingrich declares that it has "impoverished the Upstate region to the point where it is a vast zone of no jobs and no opportunities." Oddly, Mr. Gingrich appears to believe that deindustrialization is the direct result of governance by a political machine in Albany.

In fact, deindustrialization also occurred all across the Midwest. As it ground on through the Reagan years and the '90s, it was the investor class who called the shots, not the hirelings of organized labor.

And as our factories and steel mills were shuttered an army of politicians and management theorists assured us that the waning of industrial America was the next stage in human development, the coming of the glorious age of information. The most ecstatic and even otherworldly of these was, of course, Newt Gingrich.

In his much-discussed speech last Thursday, Mr. Cheney intoned, "We hear from some quarters nothing but feigned outrage based on a false narrative." And so we do: A form of protest that persistently misses the point, a type of populism that only empowers the elite, and a brand of idealism that cohabits comfortably with corruption.

Matt Taibbi on Wall St. Morals

Don’t pin the recession on AIG’s Joe Cassano

Cassano, who ran AIG’s financial-products division in London, “almost single-handedly is responsible for bringing AIG down and by reference the economy of this country”, says Jackie Speier, a US representative. “They basically took people’s hard-earned money, gambled it and lost everything. And he must be held accountable for the dereliction of his duty, and for the havoc he’s wrought on America. I don’t think the American people will be content, nor will I, until we hear the click of the handcuffs on his wrists.”

via Joseph Cassano: the man with the trillion-dollar price on his head - Times Online.

First of all, I want to apologize to readers for my long absence. I’ve been on a deadline for a gigantic Rolling Stone article and have not slept much the last three or four days. My eyes are at least four or five times their usual size; I look like one of those nocturnal lemurs from Madagascar you see on the nature shows all the time. In fact after I finish here I’m going to go feed on some grubs and bark. What’s funniest is that I actually put a post-it note on my computer days ago reminding me not to post to True/Slant while I was in a sleep-deprived state (”You suck! Sleep!” it reads), and yet here I am.

Anyway Eric Salzman over at the always-funny Monkey Business blog sent me this piece on Joe Cassano, which I found interesting and slightly troubling. Having written one of many articles identifying Cassano as a key cause of the crisis, I guess I and people like me should have seen this coming — that at some point down the road a general consensus would form blaming some rogue individual for the financial crisis. And while Joe Cassano is certainly as guilty as a person can be, the notion that he alone is responsible for this mess is not only appalling but extremely dangerous. The people who would believe such a thing are the same people who believe that this crisis might have been avoided if a few minor changes had been made. I’ve heard people say, for instance, that much havoc could have been avoidded if there had just been a law mandating margin requirements for CDS contracts, so that people like Cassano couldn’t make bets without the money to pay off.

This is bullshit. And it’s dangerous bullshit. The problem isn’t a few technical glitches in the system that allowed the Cassanos of the world to drive Mack Trucks of leverage through a loophole or two. The problem is, at its roots, a profound collapse of morals on Wall Street that would have found its way to financial destruction using any available set of instruments and laws. We are talking about people who sold giant rafts of bullshit mortgages to pensions, who stuck municipalities, innocent taxpayers, with time-bombs of subprime debt. And not just one trader here and there, but thousands of them, with the sober approval of the highest level executives in the biggest firms. On its most basic level what these people did is rip off huge institutional investors — old people, taxpayers, you and me — by finding ways to game the system and trick the big institutional fund managers into buying what they thought were safe investments, but were actually financial lemons that could barely make it out of the lot.

It doesn’t matter what tools they used. That’s immaterial. Is it true that the CDO made it easier to fool the ratings agencies, made it simpler to sell crap as AAA-rated paper? Yes. But the operative problem here isn’t the CDO but the fact that someone who makes a million dollars a year was willing to sell crap as a safe investment to pensioners. An honest man does not do this. Are there used-car dealers who would? Sure. But that’s why we joke about used car dealers, and only trust them about as far as we can throw them, and generally don’t buy used cars until we’ve had our mechanic look under the hood.

These Wall Street players are enormously compensated, which supposedly means that society highly values their work and is willing to pay them a premium to do it. Having been given that kind of responsibility and trust, these assholes should not then force us to police them as tightly as we police those who we expect to steal from us, like third-rate car salesmen, telemarketers, hookers and three-card monty dealers. With that kind of money they should be setting an example. We are paying them as though they are leaders of society, so they should lead. Instead they ripped us off like common criminals. I mean, the level of morals here is astonishing. In my entire life I’ve never met a drug dealer who would even think about trying half the shit that banks like Goldman Sachs and Citibank pulled during these years.

Well, that’s not true — okay, I did once try to buy weed from a guy I didn’t know in Washington Square, and got ripped off. I was young and stupid. The guy sold me a bag of oregano and immediately, I mean immediately, took off running and disappeared down 8th street. Guys like that usually have a life expectancy of about ten minutes, because eventually they pick someone who isn’t some lily-livered white college student to sell oregano to and they get their heads beat in with lead pipes. That’s what happens in the actual world. In the world of high finance, what happens when they catch you pulling that kind of stunt is they give you fifty billion taxpayer dollars.

Still, you can be sure that people will find a way to blame the Cassanos and Madoffs of the world for all our troubles, and business will try to go on as usual. And we’ll have more catastrophes. It’s the nature of the beast.

Krugman is Reading My Mind

I read and hear conservative ranting, and it takes me back to California when I was teaching school and Proposition 13 was passed. I quit teaching at the end of that school year, because the future looked ominous (and I was ill-suited for the job). That seemed to be the beginning of this anti-tax hysteria that threatens now to send California into bankruptcy. Paul Krugman talks about it quite succinctly today in the NYT:

http://www.nytimes.com/2009/05/25/opinion/25krugman.html

What’s really alarming about California, however, is the political system’s inability to rise to the occasion.

Despite the economic slump, despite irresponsible policies that have doubled the state’s debt burden since Arnold Schwarzenegger became governor, California has immense human and financial resources. It should not be in fiscal crisis; it should not be on the verge of cutting essential public services and denying health coverage to almost a million children. But it is — and you have to wonder if California’s political paralysis foreshadows the future of the nation as a whole.

The seeds of California’s current crisis were planted more than 30 years ago, when voters overwhelmingly passed Proposition 13, a ballot measure that placed the state’s budget in a straitjacket. Property tax rates were capped, and homeowners were shielded from increases in their tax assessments even as the value of their homes rose.

The result was a tax system that is both inequitable and unstable. It’s inequitable because older homeowners often pay far less property tax than their younger neighbors. It’s unstable because limits on property taxation have forced California to rely more heavily than other states on income taxes, which fall steeply during recessions.

Even more important, however, Proposition 13 made it extremely hard to raise taxes, even in emergencies: no state tax rate may be increased without a two-thirds majority in both houses of the State Legislature. And this provision has interacted disastrously with state political trends.

For California, where the Republicans began their transformation from the party of Eisenhower to the party of Reagan, is also the place where they began their next transformation, into the party of Rush Limbaugh. As the political tide has turned against California Republicans, the party’s remaining members have become ever more extreme, ever less interested in the actual business of governing.