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Happy Days?

Happy days are here again--if you're Goldman Sachs and JPMorgan Chase.

Katrina vanden Heuvel

October 16, 2009

Happy days are here again–if you’re Goldman Sachs or JPMorgan Chase.

These Bailout Barons raked in third quarter profits of $3.2 billion and $3.6 billion, respectively, with Goldman reportedly preparing to dole out $23 billion in 2009 bonuses. For others, the third-quarter wasn’t nearly so kind–foreclosures hit an all-time high, for example.

With headlines like these, the results of a recent poll by Hart Research Associates come as no surprise: Americans view the government’s economic policies as helping the fat cats, not ordinary folks. When asked “How much has each of the following been helped by the government’s economic policies?”, 62 percent said that large banks had been helped “a lot” or “a fair amount”; 54 percent said the same about Wall Street investment companies. In contrast, only 13 percent feel government economic policies have helped the average working person.

There is a growing danger that the public face of the Obama administration’s response to this Great Recession is the Bank Bailout. In contrast, the public face of the response to the Great Depression was the WPA. While the administration has accomplished some good with its too-small Recovery bill–preventing a far worse hemorrhaging of jobs, for example–it seems the no-strings-attached Bank Bailout is corroding the view of a government that is on the side of the working person. Even the administration’s success in rekindling some of the regulatory agencies that protect workers and the public has ironically translated to a full employment program for K Street lobbyists.

This is a real threat to the possibility and promise of the Obama administration.

As Wall Street celebrates the Dow reaching 10,000 for the first time since October 2008, unemployment continues to rise toward double digits (and it’s over 15 percent if you take into account underemployment and those who have given up on looking for work). And now we see these mega-profits and obscene bonuses on the horizon from big banks who were saved by a $17.5 trillion bailout and subsidization, and in return haven’t extended credit, modified mortgages or even paid back the money. As John Cavanagh and Sarah Anderson of the Institute for Policy Studies write in The Nation, “The real culprits, the Wall Street executives who drove the economy into the ditch, have walked away largely unscathed…. And so at a moment when financial CEOs should be the villains, it is Obama who is being booed from all sides.”

The administration needs to switch this frame. Yes, it’s a challenging time politically, with a divided Democratic Party and a right-wing GOP that is devoted to taking down Obama at any cost. But heading into 2010, the Obama administration must put itself back on the side of working people.

Organized money can’t take down disorganized democracy. Wall Street needs to get pushed back as working America gets pushed forward. The mandate of the administration must be to show commitment on healthcare reform, and then commit–in as bold a way as possible–to creating jobs, keeping people in their homes and reining in corporate recklessness. As Senator Bernie Sanders said today, “Please, do not forget about what is happening to tens of millions of our brothers and our sisters out there who are struggling hard to keep their heads above water.”

Chief of Staff Rahm Emanuel said, “You never want a serious crisis to go to waste. And what I mean by that is an opportunity to do things you think you could not do before.”

He can now check off his list a multi-trillion-dollar giveaway to get Big Banks back on track for billion dollar bonuses. It’s time for the Obama administration to act with equal boldness on behalf of regular folks.

Katrina vanden HeuvelTwitterKatrina vanden Heuvel is editorial director and publisher of The Nation, America’s leading source of progressive politics and culture. She served as editor of the magazine from 1995 to 2019.


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