(Swans - May 3, 2010) For the gatherer of stupidities, CounterPunch is a rich field. For example, take the recent article by Andrew Cockburn, "Wall Street's Bad Dream." What is the news Mr. Cockburn wants to convey to us? Well, Senator Blanche Lincoln has proposed legislation to sort of separate banks from derivatives trading. The mere proposal of such legislation is supposed to be good news, sort of, for "progressives" (what are we progressing towards?). This is, according to an unnamed lobbyist Cockburn quotes, Wall Street's "worst nightmare." I guess they are shaking in their boots. Now, of course, Cockburn does add If only for a Moment... to his title. So I guess we can be pretty sure that nothing is really going to happen here. He quickly adds that, to comfort Wall Street after its scary nocturnal imaginings, the bill also includes a guarantee of a bailout if they should bet wrong again. So they can be sure that their billions will come from somewhere. Thank God someone is comforting the poor dears.
Cockburn quotes the same Wall Street lobbyist as saying that Blanche Lincoln, the sponsor of the bill and head of the Agriculture Committee, was "always considered reliable." Reliable? What does he mean by that word if not, "she does what she is told." She has, until now, been a creature of Wall Street, which has been giving her lots of money. Now, do politicians just turn their backs on their political allies, ones that have pots of money, at that? Of course not.
Cockburn then tells us that Lincoln's reelection campaign is in trouble because of her ties to Wall Street. She originally sponsored some toothless "end user" reform that everyone knew was playing patty cake with banksters. It was so doughy that Timothy Geithner "grew a little uncomfortable." But why was Geithner uncomfortable? Certainly not because he (Geithner!) wanted to restrict Wall Street! No, he obviously feared that the ruse was too obvious; that Lincoln, a friend to Wall Street, might lose the election. Cockburn wants to say Geithner wanted Lincoln to pretend to do more to restrict Wall Street but Lincoln actually did more because Geithner was so boorish in telling her that her campaign was in trouble.
From this kind of thinking comes the real pearl of stupidity. Cockburn recounts (without a source) how the "uncomfortable" Timothy Geithner called on Lincoln and "brusquely" told her that she was being "too soft" with her earlier patty-cake bill. Cockburn writes, "Piqued beyond measure by his graceless approach, Lincoln not only abandoned the cause of the end-users altogether, but inserted the requirement, thermonuclear in its implications for the profitability of JP Morgan and others, that banks dump their derivative trading operations."
So we are supposed to believe that Lincoln, "piqued beyond measure" at Geithner's "brusque" bad manners, tossed over her long-time sponsors and initiated a bill that was "their worst nightmare"? Are we seriously supposed to believe that Lincoln introduced this bill because she didn't like Geithner's tone of voice? Are we supposed to believe that "reliable" Lincoln actually wants to pass this legislation, "thermonuclear in its implications" to her long-time sponsors, because someone was rude to her?
How absurd. Cockburn knows that none of this is real. He writes: "Sad to say, the proposal is far too sensible and necessary for the health of the financial system to be allowed to stand, and will doubtless disappear in some administration-brokered compromise in pursuit of republican votes." Isn't it obvious that Lincoln made this proposal to look good and get her opponent in a tight reelection race to shut up about her coziness with Wall Street? Her original fake bill wasn't going over, so she is pretending to be tougher with this fake one. Geithner came to warn her, essentially, that her house was on fire and she didn't know it. In that situation you don't worry about someone being "brusque."
She had to pretend to introduce serious legislation, but it's still the same trick. She has no intention of having actual legislation that really bites made into law. Unless the clamor for real change is too loud for the usual dodge, it will fail or be made into loopy law that allows the trading to continue nevertheless. Endless debate, wrangling in committee, and no doubt further secret leaks about somebody's brusque bad manners that caused a change of heart will damn it unless voter sentiment is too strong to allow it. Congress is a factory for turning reform into hot air.
Here is a good example:
That position was echoed by Senate Majority Whip Dick Durbin (D-Ill.), who said Lincoln is "in a difficult position" because Dodd's bill was reported first and placed on the Senate calendar. Changing that bill to accommodate Lincoln could take more time than Reid may be willing to give as he tries to force a Monday showdown with Republicans who have said they may block it from coming up if the measure does not meet their standard for bipartisanship.
"Now, here's Harry Reid who says, 'What am I supposed to do? If I'm supposed to merge these two bills, then I've got to withdraw the Dodd bill, merge them, start over again on the calendar,'" Durbin explained, saying the process could take "days or weeks."
Oh dear, everything is just so hard to do. Don't you see how your representatives are working day and night to try to make things better for you and your children and your children's children? But the system, the system... Trying and failing is what Congress is all about.
In any case, the legislation, if it does pass, will never hold up in court. For what is a "derivative"? According to Wikipedia, "a derivative is a contract between two parties where the value of the contract is linked to the price of another financial instrument or by a specified event or condition." Aha -- linked. How about the Yankee dollar? Is its value "linked" to, oh say, the price of Treasury Bills? So are there going to be restrictions on trade in dollars? It's an argument, anyway, let's take it to court. Is there some other definition of "derivative?" Do you think Wall Street has nobody smart enough to create new "instruments" to circumvent any new definition of "derivatives" the bill might contain? Any prosecution that arises from this bill will drown in endless court wrangling that will eventually come to the conclusion that the legislation is too vague. Lincoln's bill is designed to fail and thus illustrates nation-state politics in which politicians profess "human values" and bemoan their inability to achieve them.
Of course, if Lincoln's bill is put up separately, it will fail. If it doesn't fail it will be because people won't let Congress get away with its usual tricks, not because Geithner's bad manners caused a Lincoln volte-face. Lincoln introduced this bill because she saw her other fake bill fooled no one and her opponent was thumping her with it. But she would only abandon her former sponsors if the electorate made it clear she had to or lose, and no one, certainly not Cockburn, should suggest that she would do so because she is indignant at bad manners. By invoking absurd motives for political actions, like being "piqued" at someone's bad manners, Cockburn's article makes a pretense that such emotions are of real political relevance rather than a charade. That just makes it harder for people to understand what is going on. Cockburn's article is like taking cotton candy seriously.
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Michael Doliner studied with Hannah Arendt at the University of Chicago (1964-1970) and has taught at Valparaiso University and Ithaca College. He lives with his family in Ithaca, N.Y. (back)