National Commentary

‘Whom the Gods Would Destroy’

bentonmug“Whom the gods would destroy, they first make mad.” –Euripides.

One wonders if something akin to the present-day GOP was around 2,500 years ago when the Greek dramatist penned his famous quote.

 

bentonmug“Whom the gods would destroy, they first make mad.” –Euripides.

One wonders if something akin to the present-day GOP was around 2,500 years ago when the Greek dramatist penned his famous quote.

The behavior of the Republican leadership in the wake of President Obama’s and the Senate Democrats’ push for strong financial regulatory reform has been so patently self-destructive that even some mild revisions of their rhetoric Tuesday made the top headline in The Washington Post yesterday.

The Party of No’s approach, when it comes to defending the very Wall Street excesses that drove the world to the brink of its biggest-ever financial meltdown in 2008, has so rapidly alienated its own base, including many of its Tea Party friends, that to perpetuate the behavior will cause a thorough undoing of the already teetering political entity.

It should be clear to Sen. Mitch McConnell and friends that they are poised now to lose every political fight they undertake, and to continue their shameless obedience to Wall Street and the health care industry will only make matters worse.

They have descended to the lowest depths of bad politics, the kind that is held in the deepest contempt by average Americans of all ideological stripes. They’re abandoning any principles of good governance on behalf of the public in favor of a desperate, rear-guard effort to regain lost power by appealing to the monied elites of a corrupt Wall Street for financial support. In exchange, they offer a slavish compliance with Wall Street’s wishes.

Meanwhile, as the charges against Goldman Sachs bring into public view the bowels of the moral depravity that led to the economic meltdown – the notion that toxic sub-prime mortgages were deliberately prepackaged together and sold to unsuspecting clients as Goldman took out insurance against their inevitable failure – the public is recoiling in horror and exploding in rage.

This is not a matter of casual reading or political posturing for the tens of millions of Americans whose life savings, jobs, homes and basic security were raped by the kinds of behavior identified in the Goldman case. It led directly to the most sensuously real horror to assault millions of middle America households since the crash that led to the Great Depression, and it’s not something that any self-serving political party dares toy with.

Under the direction of Ayn Rand devotee Alan Greenspan, appointed chair of the Federal Reserve by Ronald Reagan, not free trade, but radical free trade set loose a scourge of guiltless greed through those who handled the investments of the nation’s individual and corporate wealth. They who were permitted to run amok under Reagan stacked every regulatory agency with people who fundamentally didn’t believe in regulation.

In the mid-2000’s, quietly and by administrative fiat, policies aimed at limiting the leveraging of exotic Wall Street paper instruments to 12 times their base value were overthrown. Leveraging soared above 40 to one, insuring that once the performance of the assets, such as sub-prime mortgages, at the base of this house of cards began to fail, the entire chimera would be exposed for the fake it was, and dissolve into smoke.

Much as the late former Defense Secretary Robert McNamara admitted years later that his decision to prosecute the Vietnam War was a mistake (an “oops,” if you will, that cost 60,000 young American lives), so Greenspan in 2008, in the midst of the economic meltdown, confessed on national TV to the realization that the very premise and radical libertarian, Randian philosophical underpinnings of his approach to the nation’s banking and investment system were fundamentally flawed (an “oops, there goes the global economy”).

Greenspan’s comment was buried because Wall Street wants nothing more than to go back to another round of unrestrained greed and deception.

This foul legacy is at the core of what not only Wall Street, but the Republican Party is now going to the wall for. The GOP is asking its rank-and-file to ante up their usual $25 political contributions to perpetuate that legacy.

Defending deregulation on Wall Street prior to the meltdown was one thing, but to do it in the wake of what’s happened as a result of the meltdown is sheer lunacy. The GOP hasn’t awakened to that distinction and therefore may be destined to extinction.

 


Nicholas Benton may be emailed at [email protected]