Eyal Press is a Nation contributing editor and the author of Beautiful Souls: The Courage and Conscience of Ordinary People in Extraordinary Times and Absolute Convictions: My Father, a City, and the Conflict That Divided America. He is also a Puffin Foundation Writing Fellow at The Nation Institute.
On the day after the one-year anniversary of Lehman Brothers' collapse, I find myself wishing every American could gather this evening for a screening at 209 West Houston – home to the great independent movie theater Film Forum, which for the past two weeks has been showing "American Casino," a bracing new documentary by Leslie and Andrew Cockburn about the subprime mortgage meltdown. The film is admittedly not a lot of fun to watch. What it inspires instead is rage: at the officials (Alan Greenspan, Phil Gramm) who trumpeted the virtues of financial deregulation; at ratings agencies that pretended to scrutinize whether mortgage-backed bonds being sold and resold were trustworthy (while actually handing the job to the banks that were paying them); at financiers who kept repackaging the mortgage-backed junk into inscrutable financial instruments; at predatory lenders who deliberately targeted low-income minority communities that are now awash in foreclosures.
The most amazing thing to me about the film was the utter lack of remorse expressed by the people who conspired to create the mess. The closest we come to an apology is a half-hearted admission from former Fed Chairman Alan Greenspan, who is shown telling Congress he was "shocked" that allowing large, unaccountable financial institutions to pursue their self-interests might cause problems. But nobody seems to be genuinely sorry. The people who made money from selling the junk kept it. The banks that profited so handsomely proceeded to get bailed out. The communities preyed on by predatory lenders are now full of boarded-up buildings and foreclosed homes. And, as The Times reported this weekend, bonuses and pay on Wall Street have gone right back to pre-crisis levels.
Is it too much to expect people who become millionaires by knowingly deceiving their fellow citizens to feel some measure of responsibility and shame?
The last ten minutes of Barack Obama's healthcare speech, invoking the legacy of Ted Kennedy and emphasizing concern for others as an essential part of "the American character," were powerful and affecting. Eschewing the professorial tone he has too often struck when discussing healthcare in recent months, Obama spoke instead about "large heartedness" and the "terror and helplessness" any parent would feel to have a sick child go without treatment because of money. He also said "the danger of too much government is matched by the perils of too little," and that "without the leavening hand of wise policy, markets can crash, monopolies can stifle competition, and the vulnerable can be exploited." This was not FDR in 1936 (see the Michael Lind column to which my last post linked), but it was stated with conviction.
Nobody who listened to the speech – including many of the stone-faced Republicans in the audience – could come away doubting Obama is serious about passing major healthcare legislation. But will this legislation include a public option? The speech left me dubious. In this portion of his otherwise stirring address, Obama sounded notably vague, almost apologetic, telling the members of Congress it was "worth noting" that a majority of Americans support a public option (um, yeah, one would think so), and then chiding those on the left and right who have exaggerated its significance.
This was unfair to people on the left and the right, most of whom see the public option as significant (just as the healthcare industry does) for good reason. I suspect Obama's words heartened a great many insurance executives, and that they will lead, down the road, to a compromise that marks an improvement over the current system but also a missed opportunity.
According to David Brooks' latest column, Barack Obama's approval ratings are falling because his administration "has joined itself at the hip to the liberal leadership in Congress." Hmm. On the basis of… what exactly? Appointing extreme liberals such as Lawrence Summers and Timothy Geithner to bail out the banks and Wall Street? Signaling that inclusion of a "public option" in a healthcare overhaul – the fervent hope of the liberal leadership in Congress – is not essential?
"This is a country that has just lived through an economic trauma caused by excessive spending and debt," argues Brooks, which is why he thinks the "animating issue" among disgruntled citizens is "fiscal restraint." Over at Salon, Michael Lind offers a different view, pointing to some other animating issues, like resentment at the "Wall Street elites who wrecked the economy" while working-class people lost their jobs and houses. Where Brooks counsels fiscal restraint, Lind advises Obama to find his inner Franklin Roosevelt. "We know now that Government by organized money is just as dangerous as Government by organized mob," declared FDR in 1936. "Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me and I welcome their hatred."
I'm with Lind. For the past three decades, few Democrats have dared to voice such populist sentiments, ceding the ground to Republicans, who have rallied ‘the people' against every special interest imaginable save for the corporations and wealthy elites who have persistently benefited from their policies. Frustrated Democratic strategists have then wondered why the public's anger is misdirected while refusing to look in the mirror and ponder whether perhaps the reason rests in their own party's silence. Passing serious health care reform presents Obama with the perfect opportunity to reverse the equation. So far, he hasn't taken it. The familiar pattern is playing out.
Now that he's gone, conservatives can't seem to say enough good things about Ted Kennedy. He was a pragmatist, a realist, a compromiser, someone who worked in the spirit of bipartisanship. Republican Senator Orrin Hatch said that if Kennedy were around, he has little doubt they would have joined hands to "get this done" – this being an overhaul of the healthcare system that Republicans could support.
What's wrong with this picture? Well, for one thing, the fact that the actual Ted Kennedy had been advocating universal health insurance since the 1970s – efforts the vast majority of Republicans opposed. It's true enough that Kennedy forged some compromises with Republicans to enact piecemeal reforms. It's also true that, a month ago, he wrote in Newsweek that "incremental measures won't suffice anymore." In the same piece, Kennedy addressed the question of whether an overhaul that includes a role for the government would mark a turn toward socialism, as many conservatives (including Orrin Hatch) claim. "One of the most controversial features of reform is one of the most vital," he wrote. "It's been called the ‘public plan.' Despite what its detractors allege, it's not ‘socialism.'"
I don't doubt the respect some Republicans have voiced for Kennedy is genuine. But the party to which they belong has spent much of the past forty years pillorying Democrats who veered too far left as "Ted Kennedy liberals." These attacks at least had the merit of being honest. Ted Kennedy was an unapologetic liberal who, on issues ranging from civil rights to the minimum wage to healthcare, believed government can and should play a role to make America a more just society. The movement conservatives who increasingly speak for the Republican Party do not believe this. Let's not fudge the difference or pretend that, were Kennedy around, he would have arranged for everyone to meet in the middle somehow.
"In his honor and as a tribute to his commitment to his ideals, let us stop the shouting and name calling and have a civilized debate on healthcare reform which I hope, when legislation has been signed into law, will bear his name for his commitment to insuring the health of every American." So said Senator Robert Byrd of West Virginia this morning in a tribute to his departed colleague, Senator Edward M. Kennedy.
As we all know, the shouting and name calling will not stop. Come September, if not sooner, Republicans will go right back to spreading fear and misinformation about any proposed healthcare bill (while at the same time complaining that Democrats are not "reaching across the aisle" to forge a bipartisan approach, as though this is possible with a party that wishes to sabotage any meaningful effort to reform the system).
But the question of whether Kennedy's legacy will be honored is not up to Republicans. It's up to Democrats. They control Congress. They control the White House. They have seen the polls showing that the public overwhelmingly supports giving people a choice by including a public option in any healthcare overhaul. Unfortunately, some of them have also been taking their advice from people like former Kennedy colleague Tom Daschle, the one-time South Dakota Senator turned disgraceful shill for the healthcare industry. As David Kirkpatrick of The Times reported earlier this week, Daschle has spent the past few months peddling the idea of nonprofit insurance co-ops as an alternative to the public option. He also happens to be a high-paid adviser to the clients of Alston & Bird, among which are various insurance, drug and hospital companies.
So the New York Times reports today that America's ultra-wealthy may finally be feeling the pinch. "After 30-Year Run, Rise of the Super-Rich Hits a Sobering Wall," David Leonhardt and Gerladine Fabrikant tell us, profiling the likes of John McAfee, the once-flush founder of the antivirus software company that bears his name, now down to a mere $4 million in net worth.
I suspect not many readers will pity McAfee, nor should they, since until recently the rich – and the super-rich in particular – literally never had it better. The economist Emmanuel Saez recently crunched the numbers and found that, between 1993 and 2006, roughly half of overall income growth in the United States went to the top 1 percent of all families. During the expansion overseen by George W. Bush, "the top 1 percent captured almost three-quarters of income growth." This was great for ordinary Americans, Republicans told us at the time. Except that it wasn't. According to Saez, real income for Americans in the bottom 99 percent increased by just 1.1 percent per year between 1993 and 2006. During the Bush expansion, it fell below 1 percent per year.
The shrinking fortunes of multi-millionaires such as McAfee will likely make it easy for Barack Obama to boast, in 2012, that he oversaw a decrease in the level of inequality. But the boast will be hollow if the main cause is merely that people who were extremely wealthy in 2006 became slightly less wealthy six years later. It will mean something only if policies are designed to benefit the vast number of Americans whose fortunes did not rise in tandem with the stock-market in recent years. A good place to start would be to quell the growing signs of unrest among the administration's progressive supporters by passing meaningful health-care reform.
So it appears that Democrats, with control of the White House, the Senate and House, with a mandate that far exceeds anything George W. Bush could ever claim, with a popular leader who trounced his opponent in the 2008 election, facing a rudderless opposition that has never looked weaker, can't bring themselves to rally behind the idea of health-care reform with a direct government role, i.e. a public option.
Some Democrats, that is. Howard Dean, a former doctor, is rightly calling a direct government role "the entirety of health care reform." Representative Anthony Weiner says, "leaving private insurance companies the job of controlling the costs of health care is like making a pyromaniac the fire chief."
But the White House is wavering – no, caving. Obama called the public option "one sliver" of health-care reform at a town hall meeting over the weekend; Health and Human Services Secretary Kathleen Sebelius added that it was "not the essential element of reform." Does that sound like an administration taking a principled stand?
I've just come back from Europe, where citizens in most countries (on the left, right and center) would revolt if their leaders dared to privatize their health-care systems. That's because they've grown accustomed to getting shoddy care rationed out by bureaucrats, opponents of health-care reform in the United States insist. In fact, it's because citizens in countries such as France, Germany, Finland and the United Kingdom – all of which boast lower infant-mortality and higher life-expectancy rates than the United States – don't think of health-care as a commodity. They think of it as a public good and a basic right.
Might Americans come to think of it this way? Not a chance, skeptics watching the fury unleashed at town hall meetings in recent weeks might contend. Americans think owning guns, not having access to medical care, is a basic right. But this conclusion isn't warranted. President Obama actually said it plainly enough during the presidential campaign, telling Tom Brokaw in an exchange on health-care with John McCain, "I think it should be a right, for every American. In a country as wealthy as ours, for us to have people who are going bankrupt because they can't pay their medical bills… there's something fundamentally wrong about that."
Fundamentally wrong. A right for every American. If Obama intends to pass meaningful health-care reform, he needs to remember these words and begin reminding Americans that reforming health-care isn't important simply because it will cut waste and improve the quality of care, points he emphasizes in an op-ed in today's Times. It's important because denying medical care to citizens who can't afford it in one of the world's wealthiest countries is unfair and unconscionable: because health-care is not simply a commodity but a right.
The conventional wisdom holds that Barack Obama's first term will be judged by whether he can revive the economy, which currently boasts an unemployment rate of 9.5 percent, a figure that excludes the large number of "marginally attached" people who have basically stopped searching for jobs and many others who are involuntarily stuck in part-time positions (the actual unemployment rate, by some estimates, is 16.4 percent).
But even if unemployment declines between now and 2012, there remains the question of whether Obama and the Democrats can reverse the staggering level of wealth and income inequality in America. Robert Reich has argued that Obama is passionate about this issue. That may be, but scolding bankers for taking home exorbitant salaries is one thing, passing serious regulation of the financial industry another. Goldman Sachs just reported record quarterly profits, JP Morgan $2.7 billion in profits; both will soon be showering their employees with massive bonuses. Meanwhile, as Paul Krugman notes in his latest column, "new regulations are still in the drawing-board stage."
For less lavishly compensated workers, it's another story, thanks to the half-dozen Democratic Senators who just dropped the card-check provision from legislation that might have made it easier to organize unions. Moderate Democrats apparently bought the argument that the card-check provision is undemocratic (having long been unconcerned that companies routinely use undemocratic methods to prevent workers from organizing unions). There are legitimate disagreements about how much the card-check provision would actually boost the rate of unionization in the private sector, which now stands at a paltry 7.6 percent. There are no disagreements that its defeat marked a victory for the business lobby, which campaigned strenuously against it for a reason not hard to guess: the fear that it might actually empower workers.
I like Ross Douthat, as I've said here before, but earlier this week he wrote a justly panned column in which he claimed, absurdly, that Sarah Palin had been done in by media elites who "mocked and misrepresented" her because she didn't graduate from Columbia or Harvard. Douthat's editorial was infused with the very thing he was objecting to – classism, the condescending assumption that a woman without an Ivy League pedigree shouldn't be criticized by uppity reporters for appearing utterly clueless about, say, foreign policy, the economy, the Supreme Court etc.
The best rejoinder to Douthat's column has come from a fellow conservative, Peggy Noonan, who, in today's Wall Street Journal, points out that the elites who supposedly revile Palin actually created her (see William Kristol), and that she failed because she couldn't articulate her positions or convince anybody she was qualified to be on the national ticket of any party. Noonan also corrects the unexamined assumption at the core of Douthat's column:
She is not working class, never was, and even she, avid claimer of advantage that she is, never claimed to be and just lets others say it. Her father was a teacher and school track coach, her mother the school secretary. They were middle-class figures of respect, stability and local status. I think intellectuals call her working-class because they see the makeup, the hair, the heels and the sleds and think they're working class "tropes." Because, you know, that's what they teach in "Ways of the Working Class" at Yale and Dartmouth.