The Middle Class

The major failing of the Reagan-Bush I-Clinton years, brought to total fruition in Bush II, was the war the powers that be effectively conducted against the middle class, without which class no democracy has ever flourished. I'm not sure it was always intentional. Usually it was just dumb belief in the market uber alles combined with unlimited greed on the part of Wall Street. As a result we have let the raiders rip apart our manufacturing sector with no replacement parts. Combined with a failure to protect against the worst effects of globalization sealed the deal.

I was thus surprised to read a populist piece in today's Times by one of the first perpetrators of deregulation and the other sins of the 80s and 90s, one David Stockman. Stockman now has taken up the cause of Wall Street's most traditional opponent--not the unions but Main Street. He notes how the Fed has taken care of the banks, let them become so big that they cannot be allowed to fail, and then taken care of them so they can behave profligately and still clean up. So in the end he supports Obama's tax on the banks.

Strange bedfellows indeed. A lot of the tea-party crew is motivated by populism and the history of populism did include generous amounts of racism. But allowing for some of that, the sad story is that these populists seem to think the Republicans are their salvation. I don't think so. Sure, politics as usual is awful and it would be just as bad if the Senate minority cooperated a little. But these folks yelling for the government to keep its hands off my Medicare somehow think that the escalating costs of health care will be dealt with by their keeping all the benefits they may now have.

It makes me wonder where we are when people take the side of insurance companies. This is a little like taking the side of baseball owners in salary and labor disputes. Sure, the players make a ton (rather them than Wall Street!) but unlike most of us, they have unusual skills and abilities. You try to do what Ted Williams said was the hardest thing in sports: hit a pitched baseball. And did you ever cheer for an owner?

The ugly atmosphere, though, is the result of the Republicans and Clinton pitching fear for years at people and the progressive decline of the middle class. Obama deserves credit for keeping things from moving right into Great Depression II but now he needs to take the gloves off and give it hard to Wall Street. If Geithner doesn't like it, fire him. Obama saved these guys from themselves and the public turns on him. I think it's because he doesn't fight hard enough--for a consumer protection agency in finance, for return of regulation like Glass-Steagall, for real jobs creation rather than earmarking and budget padding.