by Myles Spicer, 10/8/08 • In 2001, President Bush met with Vladimir Putin, and exclaimed: “I looked the man in the eye. I found him to be very straight forward and trustworthy and we had a very good dialogue. I was able to get a sense of his soul.” Well, Thursday, Oct. 2, I watched the Vice Presidential debate, and looked into Sarah Palin’s eyes, and saw the “soul” of the Republican Party. It wasn’t as pretty as the “soul” Bush saw in Putin (which turned out to be pretty dark).
Palin sought mightily to disengage from the past Bush policies. She claimed that she and McCain were “mavericks” who would fight against the old policies that have taken us down the road to financial disaster. Promised to carefully regulate the financial institutions that have created enormous abuses. And called out how she and McCain would provide strong oversight in the future.
Well, I listened to her carefully, looked into her eyes, and then heard her say later in the debate (and I have scrupulously quoted this verbatim): “You said paying taxes is patriotic. You’re not always the solution, too often you (the government) are the problem. Get out of the way and let the private sector and families prosper.” This is precisely the longstanding Republican lassaiz faire philosophy that has gotten us into this predicament. It is their mantra. It is simply a rehash of Reagan’s comment: “Government is the problem.
These are not the words of a regulator. These are not the words of oversight. These are not the words of a “maverick” position. These are the tired words of conservatives who want government out of capitalism completely…let the market “fix” things on their own…and let the chips fall where they may. Well, now we have seen what happens to our very good capitalistic system when it runs out of control. It essentially implodes on itself.
Naomi Klein, in her excellent book, Shock Doctrine, describes this in exquisite detail. It describes how unfettered capitalism arises, as it moved out of Milton Friedman’s Chicago School of Economics into the model for various countries’ economic policies. Friedman’s belief is: “Government’s sole function is to protect our freedom both from (outside) enemies….and from our fellow-citizens. It’s to preserve law and order (as well as) enforce private contracts, (and) foster competitive markets.” In his view, anything else in public hands is socialism, and that, for “free market” fundamentalists like Friedman, is blasphemy.
That is also what I see in Sarah Palin’s eyes; and John McCain’s as well. Keep government out of the marketplace. Period. Problem with that is it brought financial disaster to virtually every country in which Friedman took it – primarily the South American countries like Chile, Brazil, Argentina, Uruguay and others. In the end all were repelled and severely damaged by the results of unregulated “free markets”; and we cannot afford a similar outcome in America after 8 years of similar Bush/Friedman policies. And that is what I see in Palin’s eyes…and the “soul” of her party.
Even in this crisis, there are vestiges of deregulating influence. Secretary of the Treasury Paulson comes straight out of the Wall Street milieu he is now trying to regulate. He joined Goldman Sachs in 1974, working in the firm’s Chicago office. He became a partner in 1982. From 1983 until 1988, Paulson led the Investment Banking group for the Midwest Region, and became managing partner of the Chicago office in 1988. From 1990 to November 1994, he was co-head of Investment Banking, then, Chief Operating Officer from December 1994 to June 1998. Eventually succeeding Jon Corzine as its chief executive. His compensation package, according to reports, was $37 million in 2005, and $16.4 million projected for 2006. His net worth has been estimated at over US$700 million. Now he is upset with “Golden Parachutes”.
There is increasing evidence that Paulson was influential with two SEC Chairmen, William Donaldson and Christopher Cox in receiving restraint in the Commission’s exercise of oversight requirements. In 2004, at the request of the major Wall Street investment houses, including, Goldman Sachs, then headed by Paulson, the Commission agreed unanimously to release the major investment houses from the net capital requirement that their brokerages hold reserve capital to limit their leverage and risk exposure. Additionally, the 1999 Gramm-Leach-Bliley Act put the parent holding company of each of the big American brokerages beyond SEC oversight. (Gramm is a financial advisor to John McCain).
As described above, unquestionably, the “soul” of the Republican Party is deregulation — despite all the evidence that Capitalism works best with fairness, rules and oversight. Indeed, as recently as Sept. 21 of this year, McCain said on 60 Minutes the following: Scott Pelley: “In 1999, you were one of the senators who helped pass deregulation of Wall Street. Do you regret that now?” (he was referring to the above mentioned Gramm-Leach-Bliley Act of 1999 which deregulated the brokerage business) John McCain: “No, I think the deregulation was probably helpful to the growth of our economy.”
Was the recently passed bailout good or bad for the country? We won’t really know for months or possibly years. What is of interest is that the Republican votes against the bailout were not based on the merits of the plan; they were grounded in ideology. The same ideology I see in Palin’s eyes…and the Republican “soul”. Sarah Palin expressed it clearly: “Get out of the way and let the private sector and families prosper.” So, despite all the protestations of Palin, McCain, and their party, why would we want to put a fox in the henhouse? Their deeply ingrained ideology simply cannot allow them to do what needs to be done to make our economic system viable, and make American Capitalism work most effectively in the future. Palin’s comments to the contrary are disingenuous at best…and dishonest at the worst. That being the case: “Thanks, but no thanks, Governor Palin”!