William Greider | The Nation

William Greider

William Greider

The fragile and faltering state of American democracy.

Warren to AIG: You're on Notice

Elizabeth Warren speaks at the Reuters Future Face of Finance Summit, March 1, 2011. (Reuters/Kevin Lamarque)

When new members arrive in the US Senate, they are supposed to take a seat on a back bench and listen quietly for a couple of years. That is not in Elizabeth Warren’s nature. She had been a US Senator from Massachusetts for only about a week when she broke with etiquette. Warren was outraged that AIG investors were urging the insurance giant’s directors to join them in a lawsuit against the federal government, claiming damages from the federal bailout of their company during the financial crisis.

The freshman senator sent out a tartly worded statement to her many fans and followers. “AIG should thank American taxpayers for their help—not bite the hand that fed them,” Warren wrote. The message swept the blogosphere like wild fire. The AIG directors folded the next day. It is perhaps mistaken to assume her voice alone stopped this corporate ingratitude in its tracks, but that may well be the message absorbed in Washington politics. Try not to provoke this new senator, especially on the stuff she knows a lot about. She might bite back.

Indeed, Senator Warren has renewed the accusation about the AIG bailout she had made a year ago during her Senate campaign. While the Federal Reserve pumped a fortune ($182 billion) into saving AIG from failure and thereby protected Wall Street megabanks from huge losses, the Treasury Department was arranging its own “sleuth bailout,” as Warren charged. Treasury granted an exception to the standard tax rules that delivered billions more to AIG in the form of a special tax break.

The company was effectively relieved from paying any taxes despite the fact that it has returned to profitability and repaid the Federal Reserve loans. The senator called on her supporters to join a campaign to end AIG’s special tax break. “Enough is enough…,” she wrote. “These special tax giveaways give AIG a competitive advantage over its competitors—all the while inflating AIG’s profit numbers and compensation for executives.”

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What separates Elizabeth Warren from your typical newcomer to Congress—in addition to the rare gutsiness—is her deep knowledge of banking and finance. For many years, while she taught at the Harvard law school, Warren was a lonely crusader, exposing predatory bankers and the cruel terms by which millions of families were driven into bankruptcy.

Her reputation led to appointment as the chair of the Congressional Oversight Panel that investigated the AIG bailout in great depth. The COP final report is itself an extraordinary document of government—clear and concise, an unflinching analysis that describes exactly how the Federal Reserve and the Treasury failed to serve the public interest in their incestuous bailout of Wall Street titans.

“The AIG rescue demonstrated that Treasury and the Federal Reserve would commit taxpayers to pay any price and bear any burden to prevent the collapse of America’s largest financial institutions,” Warren’s report concluded.

She will be heard. The new senator will serve on the Senate banking committee and she already knows where a lot of the bodies are buried. I suspect some of those disgruntled AIG investors are wishing they had kept their whining to themselves.

For more on corporate accountability, read William Greider's roast of AIG shareholders.

AIG Investors Break the World Record for Arrogance

The American International Group (AIG) building in New York's financial district. (Reuters Photo.)

Wall Street’s ingratitude is not exactly a secret. After Washington came to the rescue four years ago with the $800 billion bank bailout and ignored flagrant criminal behavior in high places, the nation’s biggest banks returned the favor with malice—an army of lobbyists to gut reform legislation, a tidal wave of political cash to defeat the Democratic president and elect banker-friendly Republicans. Leading executives like Jamie Dimon of JP Morgan Chase expressed their disdain for the meddlesome government.

The shareholders of AIG, the giant insurance company the Federal Reserve bailed out with $180 billion, have now topped that impudence. Believe it or not, these investors are suing the federal government for rescuing their company from collapse. This sets a world record for breath-taking arrogance.

The injured AIG shareholders claim the Fed violated their “property rights” by taking over their failing company, keeping it on life support with generous lending and restoring its solvency. Now those same shareholders want compensation from the government—insisting the central bank charged exorbitant interest rates on its loans and sold off valuable subsidiaries to revive the corporation.

This is like a homeowner who sues the fire department for putting out the flames when his house is burning down. The astounding details were described by The New York Times. The imaginative skills of Wall Street lawyers seem to have no bounds, and the Justice Department must now expend a fortune in lawyers to defend the government against such an improbable claim.

The legal principle invoked by the AIG investors is eminent domain, and they are urging AIG’s current management to join in the lawsuit (even though the company is running full-page newspaper ads thanking the American people for the assistance). The Fifth Amendment to the Constitution guarantees that property owners will be justly compensated if the government takes their land for public purposes—building a highway or other projects.

In this case, the protesting shareholders say their company was taken from them by the Federal Reserve Bank of New York for the public purpose of halting the larger financial crisis of 2008. Jack Gutt, spokesman for New York Fed, dismissed the claim and noted that “AIG’s board of directors had an alternative choice to borrowing from the Federal Reserve and that choice was bankruptcy.”

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Yes, of course. But the AIG investors do seem to have a smaller point. They argue that the Fed’s real purpose in intervening was not to help AIG but to save the largest New York financial firms like Goldman Sachs from huge losses. Those banks were holding AIG credit instruments that were likely to become worthless, but the banks were repaid at full value thanks to the Fed lending. The incestuous arrangement provoked a bad odor at the time. If AIG had gone into bankruptcy court, those banks would have taken a big hit, too. AIG, after all, is not a bank but a business corporation. The Fed bent its own standards in order to help out some old friends.

It seems unlikely that a federal court will uphold the AIG investors’ argument, but a Washington judge has agreed to hear the case after a New York judge tossed it out. If the AIG shareholders win, it could put a severe crimp in the Federal Reserve’s capacity to do emergency lending in a larger crisis. A lot of Fed critics might cheer this, especially those who want to abolish the central bank altogether. That’s crazy itself. The Federal Reserve System is in need deep reform, but that task cannot be left to the reactionary right. After all, they want to put the bankers in charge with no meddling from government.

This week, Greg Kaufmann proposes that the Obama administration extend the access granted to big finance to a new crowd: struggling Americans.

The Big Lie Loses

Despite the media’s “fiscal cliff” hysteria and relentless propaganda from the monied interests, their “big lie” politics has lost. The people won. At least the people did not lose. This result is a promising sign for the political conflicts that lie ahead—another indication that “big money” does not always have its way. Liberal-labor progressives must make the most of this opportunity, mobilize folks for the next round of battles and force their progressive values upon the often ambivalent President Obama and other hesitant Democrats.

The phony drama over “fiscal crisis” was always designed to punish the wrong people for the nation’s economic ills. The establishment’s goal was to demonize the federal programs most valued by ordinary citizens, Social Security and Medicare, blaming them for Washington’s soaring deficits and debt instead of the collapsed economy that Wall Street produced. Most politicians, including President Obama, fell in line with this view. Every leading newspaper blindly accepted it as fact and blanked out contradictory evidence. How could these important people all be wrong? Because it turns out they were wrong.

Despite this supposed unanimity, the politicians choked, perhaps because they knew most citizens were not buying the lie. In the end, Congress and the president resolved the so-called crisis by not changing much and by avoiding harm to the people themselves. Pundits, take note: you lost this argument because people at large understood what you didn’t understand. After all the brave talk and scary warnings from fiscal scolds, elected politicians declined to damage the government programs that matter most to everyday Americans. The “big money” guys will be back again with the same fallacious claims, but they clearly lost this time.

The “big lie” was this: Social Security was portrayed as the great drain on American prosperity—old geezers robbing the young—but the opposite is the case. Social Security does not borrow from the federal treasury; the federal treasury borrows from Social Security. Working people pay their FICA contribution with every paycheck deduction and the money goes into the Social Security Trust Fund, where it will be used eventually to pay their future retirement benefits.

But in the meantime, the federal government borrows this money and spends it on other things—fighting wars, tax cuts for billionaires and many other supposedly public purposes. Working people know this, and they expect to get their money back. Right now, the federal treasury owes $2.7 trillion to those future Social Security recipients, but political elites think they can slyly escape this obligation by cutting the future benefits. Many working people correctly suspect they have been set up for a colossal game of “bait and switch.”

President Obama, nonetheless, has talked about doing injury to Social Security in various ways—cutting benefit checks, raising the retirement age—in the name of reducing federal deficits. Republicans have been far more duplicitous in criticizing so-called “entitlements.” In the 2010 election season, the GOP “defended” Medicare against Obama cuts. Yet in 2012 they attacked Obama for not wanting to cut Medicare more severely. The entire debate on the “fiscal crisis” has amounted to slippery double-talk.

The real economic problem is not debt. It is the sputtering economy that doesn’t create enough jobs and tax revenue. Shrinking the federal budget will make that problem worse and may make the federal deficits even larger, as Federal Reserve Chairman Ben Bernanke has repeatedly warned.

The moment of truth arrived for politicians, however, when they finally had to vote on something real and with real consequences for the folks. The elected pols lost their nerve en masse. They ducked on the hard stuff. That is the good news of New Year’s Eve. You may want to call it cowardly politics, but by defending the people’s true interests the pols have actually spared the country from worse consequences—the possibility of another crippling recession. The people can claim this accomplishment for themselves but should also thank those defiant progressive voices in and out of Congress who stood up to the propaganda and alerted the broad public to express their rage.

We might eventually learn to celebrate this moment as the beginning point for new politics—grounded in the reality of our injured condition rather than stale right-wing ideology. Instead of Republicans versus Democrats, this might become the time for Democrats versus Democrats in which liberal-labor progressives push the president and their party leftward and toward a more aggressive and ambitious agenda for rebuilding the country and the economy. The president remains surrounded by bean counters from the Clinton era who portrayed themselves as “new Democrats” moving rightward. Now the country needs new new Democrats who can revive the party’s imagination and thirst for governing.

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Obama, in a sense, has been liberated by these events, and maybe that is what he has had in mind. But if he simply remains focused on the empty discussions of fiscal rectitude, his second term is bound to look stale and ultimately empty of larger purposes. Fortunately, he now faces a new Congress that includes many new players with fresh thinking and the courage to break free of the past. They can create a front of supportive dissent that pushes Obama further left than he wants to go. By rallying the public, these new Dems must oppose the president if he persists in making too compliant compromises with the corporate-financial conservatives.

The “fiscal cliff” may have established the opposite of what its original sponsors had in mind. The conservative era is over. The problem is, most politicians don’t yet get it.

For more on the fiscal cliff, read John Nichols on "Why Tom Harkin and a Handful of Other Progressives Opposed the Deal".

Listen to the Fed: Unemployment Is the Real Problem

Forget what you read in the newspapers about the “fiscal cliff.” The real showdown in Washington is not between Democrats and Republicans. It is the bizarre collision between self-righteous politicians of both parties promising to shrink government spending and raise taxes, while the supposedly independent and nonpartisan Federal Reserve pleads with them to stop before they totally wreck the economy. What threatens to take the country over the cliff is the political momentum of the establishment’s wrong-headed propaganda.

The mild-mannered Fed chairman Ben Bernanke is standing in the way, but nobody important seems to take him seriously. Though not given to inflammatory rhetoric, Bernanke is virtually standing in the middle of Pennsylvania Avenue, waving his arms and screaming at the lawmakers. Turn back! You are heading in the wrong direction. Don’t you understand? The real economic problem is not too much government debt. It is too few jobs!

This message was again delivered by the Federal Open Market Committee at its meeting this week when it formally declared job creation as its central objective. The Fed hopes to stimulate employment by keeping interest rates near zero and pumping many more billions into the economy—at least until the unemployment rate falls to 6.5 percent. Fed officials, however, do not expect that to occur before the end of 2015.

Three more dreary years ahead, further weakening economic fiber and national spirit. The Fed chairman described the persistence of mass joblessness as “a waste of human and economic potential.” At his press conference, Bernanke allowed: “If we could wave a magic wand and get unemployment down to 5 percent tomorrow, obviously we would do that.” If Congress and the president allow the huge downshift in government scheduled for January 1, Bernanke warned: “We would try to do what we could…but I just want to again be clear that we cannot offset the full impact of the fiscal cliff. It’s just too big.”

In these circumstances, the Federal Reserve is a weak reed to lean on. It is essentially attempting to stimulate lending and spending in the private economy by altering the “expectations” of investors and business managements. By assuring those decision makers they can count on very low rates and easy money conditions for at least another two or three years, the Fed hopes this will create a bigger appetite for risk-taking. Maybe so, but skeptics are plentiful. The Fed’s extreme policy of easy money has been in place for nearly four years and it hasn’t worked yet.

After the crash of 1929, the ineffectiveness of monetary policy was disparagingly described as “pushing on a string.” Bernanke’s Fed is at risk of acquiring the same reputation.

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Banks and business corporations are sitting on trillions in surplus cash and bank reserves, making handsome profits while the real economy languishes. Yet the Bernanke Fed has so far declined to take bolder actions. Financial manipulations are the orthodox response of central bankers, but real investment remains limp or nonexistent. If political leaders dared to engage genuine debate on the economy, they would embracing bigger spending plans themselves and lean hard on the Fed to take more concrete measures like direct lending to the real economy or regulatory pressures to force open the bank credit channels.

For now, the country is preoccupied with a phony crisis that might please some bookkeepers but will do nothing to jump-start a stronger recovery. The Obama administration has tried to have it both ways—devoting lots of political energy to the debt and deficit problem, not so much to the larger ailment of economic weakness. I think we are witnessing the hangover from thirty years of conservative idolatry—the political worship of so-called free markets and deregulation. Democrats are infected too—either afraid to propose aggressive measures or ignorant of what is possible in crisis. The bean counters are still in the saddle. They may be dislodged only if the country is driven into another bloody recession.

Where is big government when we need it?

For the latest on the fiscal cliff debate, check out Washington correspondent George Zornick's blog.

Bernanke for Treasury Secretary?

Believe it or not, Federal Reserve chairman Ben Bernanke has been nominated for the job by a fully certified liberal, Robert Kuttner, co-editor of The American Prospect. My old friend Bob got scores of brickbats from upset readers when he posted this idea on his Huffington Post blog. But the case for Bernanke deserves serious consideration. He has the battle experience and scars certainly as Fed chairman in crisis. Plus, he is not a banker nor dutiful camp follower to arrogant financiers.

That’s enough for me. I second the nomination.

More to the point, as the nation’s central banker, Bernanke has been a lonely dissenter among top federal officials—bravely insisting that the economy still needs greater intervention by government to create jobs and revive growth. Elected politicians, meanwhile, argue over how to subject folks to deeper austerity, more suffering. In fact, Bernanke has been making the case for jobless Americans that normally in the past is made most strenuously by liberal Democrats. The left and other citizens should rally around Bernanke’s appointment while leaning hard on our reelected president to come up with a much more ambitious economic strategy.

This article is brought to you by The Nation Builders. Find out more…

While the media obsesses on the “Perils of Pauline” (better known as the “fiscal cliff”), congressional insiders know the tone and direction of Obama’s second term will be known rather soon when he begins to refill cabinet slots. Geithner has promised to go home to Wall Street, where a grand career awaits his return. Larry Summers, the other architect of Obama’s disappointing economic strategy, is back at Harvard teaching, though we still face the danger that he wants to return to DC as new chair of the Fed. Other establishment names in circulation for Treasury are mostly a dreadful lot—budget director Jack Lew, former North Dakota senator Kent Conrad—because they are “austerity freaks,” more bean counters who do not grasp our economic predicament. What the country needs are people with political imagination and the courage to take some big risks.

Bob Kuttner deserves an answer from the big house on Pennsylvania Avenue. After all, Ben Bernanke is a fiendishly apt choice—a Republican conservative from the church of Milton Friedman though he has been hammered by the GOP right-wingers. A splendid choice when you think about it. And there are many more important jobs to fill. I nominate Bob Kuttner for Obama’s Council of Economic Advisors.

In the latest print issue of The Nation, Robert Borsage writes that “A ‘Grand Bargain’ on the Fiscal Cliff Would be a Grand Betrayal.”

Aging White Guys: The Real Losers of 2012

Aging white guys at some important newspapers have hit upon a bizarre interpretation of the election returns: nothing much changed. Peter Baker of The New York Times: “When all the shouting is done, the American people have more or less ratified the status quo.” Say what? Baker seems like a smart enough reporter but this analysis is so stupid, he must be in post-partum shock.

George Will, always cynical and condescending, has ratified Peter Baker. In a Washington Post column headlined “The Status Quo Prevails,” Will observed: “A nation vocally disgusted with the status quo has reinforced it by ratifying existing control of the executive branch and both halves of the legislative branch.”

Lest anyone miss the point, the editors of the Post instructed their readers: “A status quo election result should spur both parties to compromise.” Compromise—that’s the ticket. By which they mean our re-elected president should punish the very people who re-elected him. The Post’s editorial bizarrely explained its reasoning. The 2012 presidential election was nearly a tie! “Just about half of voters—50.4 percent —supported President Obama. Just about half didn’t.”

Well, no, not exactly. Obama won in a landslide in the only contest that counts—the competition for the 270 electors needed to win the presidency. Obama has won 303 electoral votes so far and will get beyond 330 if his lead in Florida is sustained by the final count. The Electoral College is of course heavily biased to favor smaller states with far less population, so the president actually triumphed despite the odds against him.

Why are white guys so reluctant to give him credit? Because the 2012 election was a profound watershed in the life of the nation. Whatever else President Obama accomplishes or fails to accomplish in his second term, his re-election is in some ways even more significant than his initial triumph in 2008. He will be forever remembered as the president who opened America to a different future—more promising and fulfilling, more just and democratic than anything achieved in the American past.

It may be easier to see this if you ask: Who lost? Forget Romney and the Republicans. The real loser was the bitter legacy of “white supremacy.” That poisonous prejudice has endured in political reality and the national culture for two centuries. It still does, though it is now cultivated most zealously only by white Southerners who took over the party of Abraham Lincoln (who surely weeps for his Grand Old Party).

In 2012, white supremacy not only lost the election. It was a crucial factor in explaining how Obama won. Good for Obama and really good for the American people. Whose “status quo” are these pundits clinging to forlornly? Maybe their own. They have typically belittled the struggles by excluded minorities as “identity politics.” Well, yes, these people intend to be identified as citizens, fully endowed with the rights any other American enjoy. This election confirmed their goal.

The re-election of a black president is the most precious fact of 2012, perhaps even more significant than his original election in 2008. If Obama had lost, a wise history professor pointed out to me, it would have taken many years, probably many decades, before either major party would ever again dare to nominate a person of color for president. Black Americans understood this, probably better than most of us white folks. So did Latinos, Asians and a whole bunch of other “minority” voters. African-Americans might have had quarrels or disappointments with Obama, but they understood their historic stakes in winning a second term for him.

Obama has instead cleared a path for a very different American future. Generations from now, people of all sorts will be able to look back and say this is where it began, a new drama of self-realization now available to many once-excluded Americans and the new politics that they can generate.

Think about how children will interpret this event. For many millions, their dreams and personal ambitions are enlarged by this election. If Obama had lost, wise guys would have dismissed his presidency as a fluke, even a disaster. The kids know better, don’t they?

There are many other losers to acknowledge. Male supremacy is one of them. We cannot yet say the patriarchy is defeated, but its ancient dominance is disintegrating, both at home and in the workplace and in politics. Did the media bean-counters who think nothing important has changed notice the changing complexion and gender of elected representatives and senators? Or the fact that clear-thinking voters are now able to disregard the hoary taboos against gay men and lesbian women? The question is not about whom they can marry. It is whether they will become our trustworthy governors.

We should also celebrate another deep shift underway in politics—the arrival of the new Americans—that is actually a very old story in American history. This chapter involves some of the same injustices and abuses that earlier generations of immigrants encountered. They have always had to dig in and fend for themselves, do the gritty hard work to insure their children’s brighter future (one more thing about Americans Mitt Romney did not understand).

It always takes a generation or longer for the new Americans to gain the self-confidence and courage to step up and demand their rightful political power as citizens. But, look around, they are doing so right now. Reactionary Republicans saw their privileged “status quo” changing big-time in the 2012 election returns.Two or three generations ago, it was the Irish or Russian Jews or Italians and Polish struggling for their rightful place. In the election of 1928, they voted for Al Smith, the first Irish Catholic nominated for president. He lost that election but his politics defined the future of the Democratic party.

A friend of mine joked that Mexican immigrants are becoming the new Irish of our times and the Chinese immigrants the new Jews. Of course, every story is different, yet in some ways we are all alike.

The other big losers of course are the money guys—the billionaires who thought they could buy our election. No doubt they will try again, but now we know we can defeat them with old-fashioned door-to-door people-first politics. Organized money loses to organized people—that is the formula for our future politics. One hopes Supreme Court justices are reading the election returns. Those justices who regularly vote with the billionaires may ask themselves whether their ‘status quo” is in trouble too.

For more on the demographic shift and Obama's re-election, read the lead editorial in the latest issue of The Nation.

George McGovern, the Last Honest Democrat

What most people never grasped about George McGovern’s run for president forty years ago is that it was the last genuinely open and honest presidential campaign. His landslide defeat in 1972 taught a generation of aspiring young Democrats not to try that again—and they didn’t. McGovern’s quality of earnest candor was deeper than style or politics. This is who he was as a person, not a saint or righteous innocent but constitutionally inclined to say what he thought, believing most people would listen with an open mind or at least they would learn from a truthful discussion of the nation’s condition.

Of course, he was mistaken. Yet I saw him up close when again and again he spoke freely about his views in ways that injured him, set him up for ridicule or contempt. Even the reporters covering his doomed campaign would roll their eyes in disbelief. Me too. Reporters were the cynics and Senator McGovern was the starry-eyed idealist. That was more or less the way we told the story. Looking back after all these years, I feel we missed the essence of George McGovern’s goodness. He was not naïve or ignorant of the hostile context. Given the desperate state of the union, putting hard truths on the table was perhaps the only strategy that might prevail. Anyway, it would be good for the country.

I experienced this as a young reporter for The Washington Post covering the McGovern campaign non-stop. The editors knew I was something of a bleeding heart. But they figured McGovern was a sure loser (they were right) and so it would do no harm if I wrote a lot of sensitive mush (they were right about that too). So I spent the campaign season as one of the “boys on the bus”—two weeks on the road with the candidate, then one week or so back home in DC. We had a lot of fun. Dr. Hunter S. Thompson was the tour director.

I was given only one instruction by my editor—do not fall for the reporter’s standard illusion that what was happening day by day on the campaign trail would somehow decide the election results. It didn’t then and it doesn’t now. Knowing this liberated me to skip the thumb-sucking stories on how the horse race was going. Other reporters, watching the big crowds of ecstatic McGovern supporters turn out, would succumb and report that the candidate was finally enjoying a “turnaround.” He might not be a loser after all! My accomplishment was I never fell for that.

But I did sort of fall in love. The candidate was intriguing on a personal level—sweet and brainy and deeply thoughtful, a true and generous teacher. He had a sophisticated world view born of the World War II experience and an open-armed confidence about America and its possibilities that I think of as Midwestern (since I’m Midwestern myself). McGovern’s conviction was liberal optimism and creative thinking could change things for the better. World peace was the core of his optimism. How far-fetched it seems now.

The senator’s character was reflected in his campaign apparatus and the people around him. A little wobbly on organizational skills but a great spirit of mutual good feeling. A favorite pleasure of mine when I was back in DC was dropping by the McGovern national headquarters housed in an old rowhouse on K Street. I literally would go door to door and chat up whoever I came across among the people managing his campaign—writing speeches, raising money, plotting schedules. There were no security guards at the building nor even a formal receptionist (though they did have a daycare center for their kids).

I remember dropping in on the campaign treasurer, who proudly took me up stairs to show me the money room. There were long folding tables covered with stacks of envelopes and high-spirited women ripping them open and counting thousands of dollar bills. I felt welcome to sit down and start opening envelopes myself. On another occasion, I was ushered into an office where staffers were listening to a possible campaign song. “George McGovern Will Lead Our Crusade.” It went on for many verses while the composer did a little tap dance. Campaign staffers listened earnestly but decided the song might to be too radical for the candidate. How could you not like these people?

Across town was the future of politics—the Nixon headquarters. There were armed guards, locked doors with buzzers, special IDs for important people and, who knows, probably hidden cameras. Everyone called it CREEP—The Committee to Re-elect the President. McGovern called it the most corrupt administration in history and was criticized for exaggeration. CREEP was secretly shaking down corporations for hundreds of millions and threatening retaliation to any company that refused. The extortion was so raw some CEOs complained publically. Forty years later, the corporate money is all perfectly legal now and extortion has morphed into the wholesale bribery that engulfs both parties (though some donors still prefer anonymity).

The senator’s death brings back a small personal regret. Reporters loved to interview McGovern, knowing if they pushed the right button they might get an alarmingly candid response. A month or so before the 1972 election, the Nixon White House cooked up what became known as the “October Surprise”—the sudden announcement of peace in Vietnam. About that time, a small group of reporters were invited to interview McGovern and I asked the candidate a loaded question: What did he think would happen after “peace” was declared?  

McGovern did not blink. In his patient manner, he taught a little history of Indochina and concluded that this “peace” was not the end of the story. In a couple of years, once American troops were withdrawn, North Vietnam’s army would sweep south, swiftly conquer the old US ally and unify the two Vietnams. The United States would make a lot of noise but decline to re-enter the war. That, of course, is precisely what happened three years later. McGovern’s prediction was ignored amid the celebration of Nixon’s false peace. I still feel a small regret that I had set up the senator, not because it made any difference but because I was taking advantage of his best quality.

The hardest question to ask about George McGovern’s legacy is whether he made any difference at all. In some aspects, we can say yes. But for the central thrust of what he believed and tirelessly advocated, we have to say, honestly, no. Like McGovern, I imagined with millions of others that Americans would learn from the tragedy of Vietnam and never let it happen again.

That was so wrong. We are replaying the tragedy instead, repeating the same brutal mistakes and, worse yet, pretending that the bloodshed is noble business. Since 1972, I count four American wars fought on foreign soil and many more smaller skirmishes, all in the name of national security. Each time, the American dead are honored in sentimental public celebrations. The speeches express gratitude to their families and admiration for acts of bravery. No one of any prominence in politics dares to ask whether they died in vain or if the killing of many thousands in target countries has any moral justification. Think of the questions George McGovern asked. To what end? How are we any safer as a nation? Is it possible we are inventing even more risks?

Instead, we hear more talk of war, more planning for war. We set tripwires for potential wars in scores of other countries. If they do something bad, we will go after them. The president can now make war in remote places by personally punching a few buttons, selecting individual victims from lists of potential enemies. A man of peace who frequently makes war.

George McGovern would tell the truth nobody wants to mention. Instead of finding peace, our society is drenched in the culture of war, taught to children in video games and glamorized in fiction and film. On some twisted level, we have been taught to love war and so we shall have more of it. Do not mourn for the senator. Mourn for ourselves.

George McGovern for The Nation:

Questions for Mr. Bush | April 4, 2002
The Reason Why | April 3, 2003
Patriotism Is Nonpartisan | March 24, 2005 Gene McCarthy | December 15, 2005
The Legacy of Four Women with Rep. Jim McGovern | December 21, 2005
An Impartial Interrogation of George W. Bush | January 17, 2007

The Nation Profile:

McGovern: The Man, the Press, the Machine, the Odds by Arthur I. Blaustein and Peter T. Sussman | October 16, 1972

Ralph Nader, 'Lone Ranger,' Rides Again

To the relief of many, Ralph Nader did not run again for president in 2012. He decided instead to do what he does best. He wrote another book. It is called The Seventeen Solutions: Bold Ideas for Our American Future, published this month by HarperCollins. Nader has been doing this regularly for nearly fifty years and his latest has the same intensity and well-informed outrage of his youth. Nader’s unique character and critical intelligence became a popular model for civic idealism. His activist techniques have been copied by striving citizens around the world.

I go back a long way with Ralph. As a young reporter at The Washington Post decades ago, I wrote a lot about Nader’s earliest ventures as the self-invented reformer. I once referred to him in print as the “lone ranger,” and he never quite forgave me. The label was a cheap shot, he complained, because it promoted his celebrity, which undermined his true purpose—showing average citizens how they too could take responsibility for country and community, fulfilling the Jeffersonian ideal of self-government.

Still, reporters and editors loved the story of a single-minded crusader who goes up against power. Nader spread his influence across numerous fields by creating a galaxy of small organizations that were not much more than letterheads. But Ralph staffed them with adventurous young people like himself—willing to challenge authority by producing shocking, fact-filled investigations. Nader turned these young recruits loose on government agencies, powerful corporations and huge public scandals like the toxic substances in air and water. Politicians responded to the bad press. The texture of American politics was altered in a thousand ways, most dramatically by forcing greater transparency on once-secret affairs of government.

His new book reads to me like an enjoyable collection of golden oldies—updating issues he has championed for decades, renewing complaints that will be vaguely familiar to any old heads who have long been around legislative politics and corrupted government. Fundamental Tax Reform. Give Science and Technology Back to the People. Get Corporations Off Welfare. Create National Charters for Large Corporations. Crack Down on Corporate Crime. Reduce Our Bloated Military Budget. Invent New Rules for Reform. And so on for eight more chapters.

It seemed like a nostalgia trip. Yet after all these years I found myself impressed all over again. One has to feel awe for Nader’s intellectual energy, for his tenacity and stubborn optimism. Yet Ralph himself did not sound nostalgic. He sounded indignant as always. He is not obsessed with frustrations or disappointments from the past. He is making fresh arguments set in the present.

For many of his propositions, the book failed to convince me, and not because I necessarily disagree with his goals. Ralph doesn’t really try to explain why good ideas never got off the ground or why his Jeffersonian conception of small-d democracy ultimately failed to hold on to its power. As I recall, Nader never did have much to say about ideology or have a well-grounded theory of political power and how it works. His engine has always run on his idealism, but his faith in the potential of ordinary citizens seems to have been shaken.

In a closing chapter, “Enlist the Enlightened Super-Rich,” Nader seems to suggest that billionaires with good intentions can save us. He wishes for a “plutocratic cultural revolution,” in which rich guys like Warren Buffett or Bill Gates will disperse their fortunes for the public good, sort of like latter-day Carnegies and Rockefellers. This is a sorry footnote to Nader’s career as a reformer, a sign that he may have given up on Jefferson.

I wanted more reflection and analysis. Ralph wanted to expose the bad guys again. “We all keep trying,” he told me in a personal note. Yes, exactly. It dawned on me that Nader has written a book everyone under 30 (or even under 40) should read. They weren’t present the first time around, when Ralph was creating a movement. These are new ideas for many of them, who will be shocked by the hard facts Nader is reporting (or re-reporting). Many younger people do not know the story of that energetic reform era, nor how it was suffocated by the corporate-financed counter-reformation. It will be very good for the country if Nader’s revelations shock a new generation. This book is a subversive primer that should be read in every high school civics class.

For more on the connection between politics and activism, read Frances Fox Piven and Lorraine C. Minnite on why “movements need politicians.”

The Stimulus Alone Won't Fix the Economy

Hearts and minds leapt upward on Wall Street when the Federal Reserve announced its new effort to revive the sodden economy. Print more money, buy more financial assets—billions and billions of mortgage-backed securities or Treasury bonds. The Dow jumped 206 points on the news. Major media described the event as bold and significant. Maybe, maybe not.

A sweet day for the financial traders does not necessarily translate into good news for Joe Sixpack. Indeed, the story of this troubled era is that what wins for the suits may very well produce opposite result for ordinary folks. What the news stories generally overlooked is that the central bank has already tried this remedy a couple of times and it failed to jump-start action in the real economy, where most Americans toil.

The Fed’s “new” commitment is to buy another $40 billlion in financial assets every month until the economy really does look reinvigorated. In two previous efforts, the central bank tripled the size of its own holdings and accumulated as much as $2.7 trillion in similar buying sprees. The stock market perked up, but not the national economy. In fact, the economic engine has slowed to a crawl during the last year despite the Fed’s earnest efforts.

As I read the Fed’s latest pronouncements, I am impressed by the words, not the numbers. Chairman Ben Bernanke is expressing sincere alarm at the “weak job market” and urging every other governing institution, from the White House to Congress, to take it more seriously. The Fed will stay on the case, he promised, even if its monetary interventions are “no panacea.” When the conservative Federal Reserve chairman worries aloud about stubbornly high unemployment and identifies joblessness as the gravest threat facing the economy, we can be sure this crisis is real.

Alas, most political leaders are not listening. The grumpy Republicans attack Bernanke for meddling in their affairs. Mitt Romney proposes to do nothing to make things better. Let nature takes its course until the bloodletting is exhausted and Barack Obama is out of the White House. The president did propose a jobs bill last year, but too little, too late. Everyone knew the Republicans would block passage, and they did.

Bernanke and colleagues know this is rubbish (so do most Americans). Some central bankers can glimpse the outlines of larger crisis looming over us—a global meltdown of historic proportions if nothing is done to prevent it. If the Fed’s latest efforts fail, as I fear they will, the central bankers will try something else. Bernanke promises they will.

Who's Got the Nukes?

Israel’s prime minister is provoking another political dust storm over Iran’s nuclear ambitions, but US news stories once again fail to mention awkward facts that are the true linchpin for this threatening crisis. Israel itself already has the Bomb. It developed its own nuclear weapons several decades ago, but has never officially admitted as much. And unlike other nuclear powers, Israel has never signed anti-proliferation treaties, nor has it submitted its nuclear arsenal to regular inspections by international authorities.

Everyone knows this, at least the government officials on all sides do. Yet there seems to be a media taboo against sharing the information with the American public. Americans have a huge and dangerous stake in the matter. If things go wrong and Israel launches a pre-emptive unilateral strike against Iran, it would probably provoke retaliatory war-making by Iran. Like it or not, the United States could be pulled into yet another war in the Middle East to defend our ally. Shouldn’t people hear the whole story before the shooting starts?

Don’t take my word on this. Check out newspaper accounts in which Israeli officials complain that the United States has not been tough enough with Iran. Prime Minister Benjamin Netanyahu blisters President Obama for failing to draw a bright “red line” against Iran’s efforts to develop a Bomb of its own. Netanyahu even accuses of Washington of “moral” failure for not standing up to the mullahs. His patrons in the Republican Party are grateful for the political intrusion.

But why does the press routinely ignore Israel’s nukes and its obvious military superiority? Perhaps because that would complicate and weaken Israel’s moral claims of self-defense. Furthermore, it could help explain why Iran might be eager to join the exclusive club of nuclear nations. Iran might say—if it ever told the truth about its motivations—that it is the nation in need of self-protection.

Without a nuke of its own, Iran and other neighboring Muslim nations will always see themselves as vulnerable to bullying and the threat of unilateral attack from Israel (as Israel is now again threatening). The claims and counterclaims on both sides are subject to dispute, but honest debate is unlikely to occur unless everyone acknowledges the same set of facts.

The media taboo was broken this week by columnist Bill Keller of the New York Times, formerly the Times executive editor. His op-ed asked polite questions and sought reasoned answers. Instead of demonizing the Iranian ayatollahs as crazed and suicidal, Keller concluded that it seems very unlikely a nuclear-armed Iran would use its nukes to destroy Israel. He did not say so explicitly, but he seemed to think Iran wants the Bomb to neutralize Israel’s superiority. It is a plausible conclusion.

“The regime in Iran is brutal, mendacious and meddlesome, and given to spraying gobbets of Hitleresque bile at the Jewish state,” Keller wrote. “But Israel is a nuclear power, backed by a bigger nuclear power [the United States]. Before an Iranian mushroom cloud had bloomed to its full height over Tel Aviv, a flock of reciprocal nukes would be on the way to incinerate Iran. Iran may encourage fanatic chumps to carry out suicide missions, but there is not the slightest reason to believe the mullahs themselves are suicidal.”

Keller has proposed an excellent subject for public debate. In this conflict, on which side does insanity reside?

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