William Greider, a prominent political journalist and author, has been a reporter for more than 35 years for newspapers, magazines and television. Over the past two decades, he has persistently challenged mainstream thinking on economics.
For 17 years Greider was the National Affairs Editor at Rolling Stone magazine, where his investigation of the defense establishment began. He is a former assistant managing editor at the Washington Post, where he worked for fifteen years as a national correspondent, editor and columnist. While at the Post, he broke the story of how David Stockman, Ronald Reagan’s budget director, grew disillusioned with supply-side economics and the budget deficits that policy caused, which still burden the American economy.
He is the author of the national bestsellers One World, Ready or Not, Secrets of the Temple and Who Will Tell The People. In the award-winning Secrets of the Temple, he offered a critique of the Federal Reserve system. Greider has also served as a correspondent for six Frontline documentaries on PBS, including “Return to Beirut,” which won an Emmy in 1985.
Greider’s most recent book is The Soul of Capitalism: Opening Paths to A Moral Economy. In it, he untangles the systemic mysteries of American capitalism, details its destructive collisions with society and demonstrates how people can achieve decisive influence to reform the system’s structure and operating values.
Raised in Wyoming, Ohio, a suburb of Cincinnati, he graduated from Princeton University in 1958. He currently lives in Washington, DC.
Phil Gramm, the senator-banker who until recently advised John McCain's campaign, did get it right about a "nation of whiners," but he misidentified thefaint-hearted. It's not the people or even the politicians. It is WallStreet--the financial titans and big-money bankers, the most importantinvestors and worldwide creditors who are scared witless by events.These folks are in full-flight panic and screaming for mercy fromWashington, Their cries were answered by the massive federal bailout ofFannie Mae and Freddy Mac, the endangered mortgage companies.
When the monied interests whined, they made themselves heard by dumping the stocksof these two quasi-public private corporations, threatening to collapsethe two financial firms like the investor "run" that wiped out BearStearns in March. The real distress of the banks and brokerages andmajor investors is that they cannot unload the rotten mortgagesecurities packaged by Fannie Mae and banks sold worldwide. Wall Street's preferred solution: dump the bad paper on the rest of us, the unwitting American taxpayers.
The Bush crowd, always so reluctant to support federal aid for merepeople, stepped up to the challenge and did as it was told. TreasurySecretary Paulson (ex-Goldman Sachs) and his sidekick, Federal ReserveChairman Ben Bernanke, announced their bailout plan on Sunday to preventanother disastrous selloff on Monday when markets opened. Like thefirst-stage rescue of Wall Street's largest investment firms in March,this bold stroke was said to benefit all of us. The whole kingdom ofAmerican high finance would tumble down if government failed to act ormade the financial guys pay for their own reckless delusions. Instead,dump the losses on the people.
Okay, stop the complaints about Democratic presidential candidates who won't face up to the financial crisis bearing down the country. Hillary Clinton stood up and shook her finger at it, kind of like her husband does. Her response seems a little goofy and maybe a sign the boys in her "war room" are losing their grip. On the other hand, what she said is exactly what you would expect her to say.
Speaking at the University of Pennsylvania Monday [AP story by Charles Babington] Senator Clinton proposed the government provide mortgage companies with protection against lawsuits by other investors. Say what? Isn't that the old Republican chestnut called "tort reform?" Shouldn't she have saved this nugget until after she wins the nomination and starts moving to the right for the fall campaign?
Her logic is strictly from financial. "Many mortgage companies are reluctant to help families restructure their mortgages because they are afraid of being sued by the investment banks, the private equity firms and others who actually own the mortgage papers," Clinton explained. Good thought. Maybe she could send along a few security guards. I hear mortgage lenders are afraid of being tarred and feathered by those families who were conned into buying the sure-to-fail mortgages.
Win or lose, whatever happens next, Barack Obama is now established as oneof those rare, courageous teachers who leads the country onto newground. He has given us a way to talk about race and our otherdifferences with the clarity and honesty that politics does not normallytolerate. Whether this hurts or helps his presidential prospects is notyet clear, but he has done this for us and it will change the country,whatever the costs to him.
His words should discourage the media frenzy of fear-driven gotcha. His speech in Philadelphia on Tuesday may also make the Clintons re-think their unsubtle exploitation of racial tension. But nobody knows the depth or strength of thecommonplace fears streaming through the underground of public feelings.No one can be sure of what people will hear in Obama's confidentembrace, beckoning Americans in all their differences, leaving out noone, to a better understanding of themselves.
The Straight Talker, who warned us he was weak on economics, blew a bighole in his presidential vessel the other day by talking straight on thesubject with the Wall Street Journal. John McCain has already embracedGeorge Bush's Hundred Year War in Iraq. Now McCain says he also wants torevive Bush's plan to privatize Social Security. And he wants to cut thecorporate income tax by one-third, though it has already beeneviscerated by Republican loop holes. And the Senator's goal for taxreform includes a "fairer, flatter tax" which can only mean moreregressive tax-cutting in the Reagan tradition.
The country and campaign reporters are presently fixated on fine-printarguments between Obama and Clinton, but John McCain's bold declarationsto the Journal's Bob Davis provide devastatingmaterial for the fall campaign. On one level, the Republican nomineeseems to be correcting the record, getting his policy positions evenmore closely aligned with Bush and the Grover Norquist school ofperennial tax-cutting.
Deliver more boodle to the corporates and high-end incomes, so thefederal government will be starved for revenue. This is meant toreassure the money guys expected to finance his campaign, but it oughtto alarm anyone who still sees McCain as a level-headed moderate whothinks independently. The media truth squad should have fun trying tomake sense of the McCain agenda. His remarks will provide content formultiple sharp-edged attack ads.
The Clintons play dirty when they feel threatened. But we knew that, didn't we?
The recent roughing-up of Barack Obama was in the trademark style of the Clinton years in the White House. High-minded and self-important on the surface, smarmily duplicitous underneath, meanwhile jabbing hard to the groin area. They are a slippery pair and come as a package. The nation is at fair risk of getting them back in the White House for four more years. The thought makes me queasy.
The problem is not Hillary Clinton per se or the sharp exchanges and personal accusations that squeamish political reporters deplore. That's what politics is always about. Tough, even nasty conflict is educational, also entertaining. Politics ain't beanbag, as Mark Shields likes to say.
When Goldman Sachs announces recession and the Federal Reserve chairmanon the same day promises ready-to-go interest rate cuts, you can take itto the bank: the recession is official. The 2008 campaign'srefreshing spirit--the chorus of "change, change, change"--is joinedby a more traditional theme. "Jobs, jobs, jobs." Suddenly, everyonewants to sound like a Keynesian liberal, ready to prime the pump withfederal spending.
My advice to Barack Obama: look through the John Edwards file--he gotthere first--and borrow freely from his sound ideas for economicstimulus. Then double or triple Edwards' numbers to show your sincerity.Do this fast. Hillary Clinton is already out of the box with a planthe New York Times describes as the first fromany Democratic candidates.
Wrong. John Edwards was out front with aggressive anti-recessionproposals in early December. Act now, he said, don't wait for theofficial announcement. First, Congress should put up at least $25billion to stimulate job creation and be ready to spend another $75billion as things get worse. Spend the money on "clean energy"infrastructure, the housing crisis, reform of unemployment insurance,aid programs to help families get through hard times and other wounds.Get the money out to the folks who will spend it right now and topublic works projects that can create new jobs quickly.
In terms of economic consequences, the new trade agreement with Peru istrivial. In political terms, however, it delivers an ominous message.When faced with a choice between money and their own rank-and-file, theDemocratic leaders in the House will go with the money, even if itrequires them to pass legislation with Republican votes. Even if amajority of their own caucus is opposed. Even if it means handing theshrinking president, George W. Bush, a rare legislative victory.
Speaker Nancy Pelosi pulled it off today at considerable costto her own reputation. How different are the new Dems in Congress? Notvery, it seems. That is a reasonable interpretation of events and theSpeaker is now stuck with the burden of disproving it.
Pelosi's lieutenants "whipped" the party caucus energetically and didbetter than expected--109 Dems voting for the Peru trade bill, 116 Demsagainst.
The fall of Citigroup is a resonant political event--akin to the Republican Party's failure to win reform of Social Security--only this time the bell tolls for the Democratic Party. The creation of Citigroup as an all-purpose financial supermarket and too-big-to-fail banking marvel was very much the accomplishment of Clinton Democrats. They enacted the law in the late 1990s that authorized this megabank monstrosity, with coaching from Treasury Secretary Robert Rubin, Fed chairman Alan Greenspan and of course Sanford Weill, the creative genius who built Citi.
Now that this institution has slid into deep trouble and Rubin has been appointed emergency chairman to rescue it, Democrats inherit the stink. They made this mess possible. Will they now accept the meaning of Citigroup gone sour and begin to undo the damage? That is, undertake reform of the financial system in fundamental ways? I doubt it, though the message is obvious.
Just as the GOP dreamed for decades of dismantling Social Security, investment bankers campaigned for thirty years to repeal the Glass-Steagall Act, which separated commercial banking from its investment-house cousins. This was the New Deal achievement enacted in response to the double-dealing banking practices that contributed to the crash of 1929. Bankers pushed their depositors into buying the corporate stocks the bankers were hustling, among other malpractices. Wall Street hated the law but failed year after year to win repeal. The problem was always Democrats (since Republicans were sure supporters).
The news that the Iraqi government has banned Blackwater USA, the notorious mercenary firm, from operating in the country reveals another of the great fictions promoted by the Bush crowd in the course of this catastrophic war. The notion that Iraq is a sovereign nation in control of its own destiny.
The Bush Administration announced this myth several years ago after Iraqis adopted a Constitution and started electing a government. It was shrewd political propaganda--a reassuring sign of progress--but the claim was not true then or now. Major media and American political leaders, nevertheless, embraced the happy talk and pretended it was real.
(The Nation's own Jeremy Scahill has done pathbreaking reporting on Blackwater: See Bush's Shadow Army and Mercenary Jackpot, among others. Scahill also testified before the House Appropriations Subcommittee on Defense in May about the impact of private military contractors on the conduct of the war.)
Alan Greenspan has come back from the tomb of history to correct the record. He did not make any mistakes in his eighteen-year tenure as Federal Reserve chairman. He did not endorse the regressive Bush tax cuts of 2001 that pumped up the federal deficits and aggravated inequalities. He did not cause the housing bubble that is now in collapse. He did not ignore the stock market bubble that subsequently melted away and cost investors $6 trillion. He did not say the Iraq War is "largely about oil."
Check the record. These are all lies.
Greenspan's testimony endorsing the Bush tax cuts was extremely influential but now he wants to run away from it.