Tea Party Populism Falling Markedly Short

An excerpt from my Friday afternoon:

“Hi, [senior associate].”

“Hi, [author].”

“So as you know, the SEC is suing Goldman Sachs on the theory that rather than supporting their CDO, as its managers explained Goldman’s role to investors, the CDO’s managers actually let Goldman pick purposefully risky investments, so Goldman would wind up fleecing th–”

“Oh, yeah, I know. I heard the musical.”

“Huh?”

Watch the musical itself, and read the article, but that’s basically the story. Parties to credit default swaps acquired investors, promising them sure-thing profits and glossing over the fact that Goldman, or another investment bank like Goldman, would also enter the relationship in such a way that the bank would win when the investors lost, and vice versa. That’s fine at the outset. It means the investors have some form of support, to double-down on profits, and the bank, in theory, hedges against opposite investments elsewhere. But the CDO’s managers also let the bank pick investments — derelicting their fiduciary duties to the investors, creating an irreconcilable conflict of interest, and, necessarily, leading to the investors losing everything to Goldman. At least, these are the allegations. It’s bad times, all around.

What’s remarkable, then, is the GOP’s utter unwillingness to deal with the issue. For the past six months, we’ve been subjected to the myth that the right’s anti-regulatory kick is an attempt to keep the government’s hands out of our pockets — when it’s really an attempt to keep the government from keeping unregulated corporations out of our pockets. The choice aspect in the healthcare debate let the GOP gloss over the issue, but we’re well past that point. The collapse of the financial markets left us with innumerable corporate bad guys — almost all of them unregulated — and there’s just no populist case against regulating them, unless we have, finally and irrevocably, excised the anti-corporate crusade that has, for more than two hundred years, defined the populist movement.

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One comment

  1. I agree. I keep hearing some conservatives complain about Obama being in the corporate pockets, throwing money at them, yet whenever he tries to do things like fight the court decision on corporate dollars, or tighten the regulations…he still has to fight conservatives for what I would have assumed the “populists” would support.

    I suppose this is what you get when you have “populists” mixing with the pro business Republicans. Contradictions and arguments against do anything.

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