Wall Street's Blues: The Perils of Right Wing Ideology
Photo Credits (clockwise from top left): Associated Press, Wall Street Journal, flickr.com/respres, Reuters
Today has been a wild day. The Dow Jones Industrial Average dropped more than 500 points. An already jittery nation wonders how Wall Street's woes will affect Main Street. I have been watching the melt down of the housing situation with ideological interest. How does a progressive person view what we are seeing? Is there a progressive analysis of the economic woes that are affecting us? Woe and whoa!!!
One of the hallmarks of conservative ideology is a disdain for government regulation. It is thought that government serves as dead weight to the brilliance of the market. The Equal Justice Society was privileged to be part of a retreat that took place in the Santa Cruz mountains some years ago and learned that much of today's Right-wing ideology was formulated in Mt. Pèlerin, Switzerland, early in the 20th century.
Many of the ideas expressed by Barry Goldwater and then put into place in the Reagan administration first saw the light of day in the cold mountain air of the Alps. A disdain for government and a rock solid faith in the brilliance of the market were but two of the ideals embraced by those in attendance.
When Ronald Reagan took office, the deregulation of American life began in earnest. The deregulation of the airline industry is a prime example. The Bush administration saw the deregulation of the banking and financial industries. Former Senator Phil Gramm was a major proponent of this new approach to business.
One consequence of the diminution of regulation was the subprime mortgage crisis. No one was watching as this scam moved forward. As an NPR reporter said this morning, "My six year old daughter knows you do not lend money to people who cannot pay you back." How true yet there was no one from the government advising banks and other financial institutions that these loans were a bad idea. Folks just kept making money and the government fiddled while the subprime mortgages lit the kindling that got this firestorm going.
Parenthetically, the anecdotal information I have seen indicates that the borrowers involved were disproportionately Black and Brown, poor or low income. The current administration cares little for these Americans so they were allowed to attempt to pursue the American dream of home ownership-a dream that has become a nightmare for all of us.
The Equal Justice Society is committed to new ways of bringing about social change. We believe we must get out of our issue area silos and look at the big picture. Although our expertise is in the area of racial justice, we at EJS are concerned with the whole of American society including our economic situation. Dr. King talked of the "beloved community." His aide Bayard Rustin talked of the Grand Coalition.
We at EJS are working with colleagues on what we call the Grand Alliance. We have worked on judicial nominations and are currently working to unite those working on statewide initiatives that will be on the California ballot this November.
Rather that having folks work in their silos on their individual efforts, we have brought together six different campaigns in an effort to help each other across the individual issues of marriage equality, immigrant rights, criminal justice, renewable energy, voting rights and reproductive rights.
After the elections, we will be convening a number of allies to move these efforts forward. We believe the financial crisis provides an opening that will allow us to re-institute the idea of the wisdom of government regulation. Americans do not like the idea that billions of our tax dollars will be spend bailing out institutions that made colossally bad decisions. Van Jones, Tom Saenz, Amy Moy, Amy Everett, Luke Cole, Vincent Pan and others will meet to figure out how to move a common agenda forward.
The Chinese word crisis is composed of two characters-danger and opportunity.
Take care.
EJS
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Reader Comments (10)
Your words are both timely and timeless.
Rick Jackson
i saw your article - I am a hedge fund manager and author "Make Money Work for You...." John Wiley & Sons 2006 and the founder of the Wall Street Wizards Urban Financial Literacy Program.
You should check out our program and what I am doing to bring financial education to black and brown youth in california and New York. Trust me... the mistakes made by some in our generation wont be made by the kids that come through the WSW program.
Best
William
How wonderful to read your thoughts again!
Just a few words. First, I don't want to let the feds or State regulators of the hook. When we began Community Bank of the Bay, as People of Color, both of these regulators were all over the bank for lending to folks who were not A creditors.For several years the CBbank was monthly regulated primarily because of these loans. So I suggest that your analysis must go deeper than Reagan. I suggest that the Feds and State are complicit, partners with the Street in pushing loans to people they knew could not repay. Additionally, including the Federal Reserve, they knew it was a get rich fast game iwht a heavy price to paid by we the people . Secondly, another task group must be formed around economic justice.
Again, many thanks...
While the author appropriately linked the crisis to subprime lenders, the fact that black and brown people were able to pursue the dream of homeownership was a positive. Perhaps a more accurate way of describing the issue is to comment that it was the PREDATORY LENDING PRACTICES of these lenders that has hurt the dream for "all of us."Black, brown and all low income people deserve a shot at the dream of homeownership, especialy since that is what our tax code rewards.
Your article was a breathe of sanity in a crazy day -- we look toward the future with such fear but you are right, that we are the many and outside of our silos we can rebuild that blessed community that values people, the environment and our descendants over the quick rich schemes that the "brilliant" market pushes.
Thank you for this article! Today Sen. McCain told us not to worry. Since the Lehman Brothers bankruptcy isn't being bailed out by the government, it won't 'affect any American taxpayers.' Never mind the massive layoffs at Lehman or that people's pension funds are going south (and are likely to continue shrinking as this financial crisis grows).
I applaud your efforts to connect to the big picture and move out of the silos that divide us. It's time to give policy makers who put profit over people a "big message" by voting them out of office.
Debra Ballinger Bernstein
In addition, this collapse was triggered by the fact that the Bush Administration decided to have a war in Iraq and not pay for it. By greatly increasing the national debt, Bush weakened the dollar as an international currency, leading to the credit crises that doomed financial institutions. The downturn in the economy from the Iraq War has made it hard for many people to pay their mortgage.
I see deregulation as the gun aimed directly at the head of the populace, and the Iraq War as the trigger. It is similar to what happened to the old Soviet Union as a result of its adventures in Afganistan.
Thanks again for these great discussions.
Allan
your friend always,
Cathy