krebscycle

During the financial crisis, the progressive and left media was dominated by “experts” who told a story that was totally false and dangerously reactionary. The truth, still unknown to most Americans, is that the Federal Reserve Bank and President Obama’s TARP bailouts saved the economy and made money for the government. Despite many authoritatively written arguments that the government was overpaying “banksters” for worthless “toxic assets”, the government bought at panic prices and sold at significant profit and, in addition, the government saved the auto industry and credit unions, prevented a full scale depression, and forced a major restructuring of Wall Street. But saturated with the kinds of wild conspiracy stories that used to be the domain of the John Birch Society, “progressive” America remains bitter, resentful, and completely in the dark about what happened and why. The focus on silly stories about “banksters” and “vampire squids” has displaced any serious consideration of what is wrong with finance and with the economy more generally.

Instead of creating pressure for reform of a tax system that rewards the 0.1% and punishes the poor and middle class, the progressive left alternates between nostalgia for obsolete and arcane regulations like Glass-Steagal and cheap “they are all owned by corporations” cynicism. Of course, this is a convenient state of affairs for wealthy elites. Instead of public support for President Obama’s infrastructure bank or tax reforms, progressives are committed to hapless exercises in nostalgia and to impotent whining. Instead of pushing for a public bank, progressives demand a return to a fictional past in which Jimmy Stewart’s little bank helped the ordinary people. Instead of asking for an end to the absurd carried interest deduction, progressives want to talk about the absurd and unenforceable Tobin tax. Most importantly, instead of highlighting the differences between an administration that has imposed the first federal consumer protection regulation on finance in 50 years and its opposition, the progressives have dug themselves into the “all politicians are bad” trench that they find so comfortable and that serves the interests of the right wing elites so well. Like Fox’s viewers on the right who live in Roger Ailes bubble, the progressives on the left inhabit a bubble constructed by people like Duncan Black (Atrios), Yves Smith, Bill Black, and Matt Taibbi.