The seductiveness of sleaze

No, I’m not talking about everyone’s fascination with celebrity sex scandals.

I’m talking about how slimy politicians reframe their (contributors') pro-corporate, pro-rich, anti-middle-class positions to make them irresistable.

Taxing the estates of only multi-millionaires — including capital gains never taxed during the deceased’s lifetime — when they die becomes “the death tax.” Who could support that?

Offshore drilling is a “national security” issue. And “Drill, baby, drill” became a Republican rallying cry.

Economist Simon Johnson notes this particularly clever posturing by Senate Minority Leader Mitch McConnell:

In a Senate floor speech yesterday, Senator Mitch McConnell (Senate Republican leader) said, ”The way to solve this problem is to let the people who make the mistakes pay for them. We won’t solve this problem until the biggest banks are allowed to fail.”

Do not be misled by this statement. Senator McConnell’s preferred approach is not to break up big banks; it’s to change nothing now and simply promise to let them fail in the future.

This proposal is dangerous, irresponsible, and makes no sense. The bankruptcy process simply cannot handle the failure of large complex global financial institutions – without causing the kind of worldwide panic that followed the collapse of Lehman and the rescue/resolution of AIG. This is exactly the lesson of September 2008.

If a huge financial institution were to reach the brink of bankruptcy, the choice again would be: collapse (for the world economy) or rescue (of the very bankers and creditors who are responsible for the mess). The point of the reforms now before us is to remove that choice, as far as possible, from the immediate future.

There is only one plausible way to ensure banks that are currently “too big to fail” can actually fail: Make them substantially smaller.

(Right-wing think tanks employ an army of researchers and wordsmiths who spend their lives getting richly rewarded for slapping lipstick on pigs. Some right-wing thought campaigns are designed not to directly help contributors but to strengthen the right’s political base. For example, preventing girls and women from choosing abortion — when, for example, they can’t afford the immense financial, time, and emotional investment required to properly raise a child — is “pro-life.” Conversely, those of us who would spare a child-to-be from being raised by a drug-addicted, poor, young woman who accidentally got pregnant by who-knows-whom and doesn’t want to be a mom… well, we’re obviously “anti-life.”)

Posted by James on Wednesday, April 14, 2010