The problem with "The Problem"

"The Problem" will, no doubt, not be a problem for Bernie Sanders's positively uplifted supporters. It's not an attack ad, they'll say. It's merely a "contrast ad," which is how Sen. Sanders described it yesterday morning, not yet knowing, of course — of course not — if it would be running in less than 24 hours. "Do I plan on running more contrast ads?" he asked before a breakfast assemblage of reporters. "I don’t think we do, but that’s something we are still talking about."

What makes the now-running 30-second "Problem" a "contrast" rather than an attack ad? Nothing. That's the difference.

 

Would it be too cute, too coy for the Sanders camp to argue that omitting mention of any particular "bought-and-paid-for" Democratic opponent frees the Sanders camp from the charge of hypocrisy? Has the virtuous, never-negative Sanders campaign stayed its course of political chastity? Respectively, yes, and no. It will be entertaining, however, to listen to the Sanders camp argue no, and yes.

Yet what's more remarkable (oddly enough) is that Sanders is only doing what Sanders must do. He has slipped or he's slipping or at least he believes he is slipping in Iowa, hence this attack ad. Sanders's politics is merely regressing to the "mean": If one is slipping, one gets nasty. This is perhaps the oldest law of politics, and here, Sanders is nothing if not law abiding. Accordingly, I don't blame him one bit. He had no choice in going on the attack. Iowa is tight, a loss there could weaken New Hampshire, and South Carolina could be both devastating and dispositive.

Sanders, then, is merely behaving as any other politician would. Will his supporters concede the obvious? Will they concede that he's guided by the same old political playbook, which rather taints the fresh, "revolutionary" aspect of his campaign? I doubt it. It'll be refreshing if I'm wrong.

 

Comments

[Jimiskin]

There is nothing wrong with telling the simple truth. And that is exactly what took place in this ad. What I do not understand is why someone who claims to identify as a Socialist is so dead set against the only shot we're going to get at electing one with similar beliefs.

[David & Son of Duff]

Alas, poor 'Jimiskin', I absolutely agree with him! Obama has pumped money into Wall Street by printing zillions almost all of which has inflated stocks and bonds. Has 'HillBilly' ever distanced herself from this policy?

Incidentally, those inflated stocks and bonds are overdue for a correction, so better watch out!

[The Dark Avenger]

Au contraire, David, of the 426 Billion dollar bailout AKA as TARP, the US actually made money the old fashioned way, by earning it

"The U.S. government essentially closed the books on TARP with a $15.3 billion profit.
Treasury sold its remaining shares Friday in Ally Financial, its last remaining major stake from the $426 billion bailout of banks and the U.S. auto industry.

The Troubled Asset Relief Program was passed in 2008, in the wake of Lehman Brothers' bankruptcy, as the nation's financial system was on the verge of collapse and economists feared another Great Depression. At the height of the bailout, Treasury owned a significant stake in all of the major U.S. banks, such as Citigroup (C) and Bank of America (BAC), two of the nation's Big Three automakers -- General Motors (GM) and Chrysler Group (FCAM) -- as well as one of its largest insurers, AIG (AIG).

But with the sale of the Ally (ALLY) stock, Treasury now only holds stakes in 35 small community banks."

http://money.cnn.com/2014/12/19/news/companies/government-bailouts-end/

There has been a correction on Wall Street lately, David, but it's got more to do with China and the current glut of oil on the market than Obama running the printing presses. Between that and reducing the Federal deficit by a trillion, I can't fault him for practicing the same values of frugality and profit-making that we were taught by the late Baroness and Our Lady of The Corner Shop.

But thanks for the latest report from Planet Brietbart!

[Tom Benjamin]

I don't think the ad is true. I don't think Wall Street likes Dodd-Frank very much. It is actually a pretty sensible piece of legislation passed despite Wall Street's best efforts to derail it. Democrats are being punished for this because Republicans are now getting virtually all the Wall Street money.

The only shot? PM hopes one day that a socialist program has a real shot. Today he does not think there are enough people with similar beliefs to get him elected or to accomplish anything if he is elected. A losing socialist or an elected socialist who proves to be a weak or ineffectual President will hurt rather than help the cause.

[Bob]

Wall St., despite the implied warnings, is actually part of the United States of American and has been for some time. Unless the rest of the country decides it should be seized by force, which is an idea not completely lacking charm, it will have to be negotiated with. If we're lucky it might even be once again regulated to the point that it's illegal for it to run thievishly amuck. This would not be done by the president alone. I sympathize with Bernie's message, but cannot help but live in the real world.

[Peter G]

That's like predicting the sun will rise.

[shsavage]

By the way, I just came across this little tidbit:

http://www.independent.co.uk/news/education/education-news/english-teenagers-are-the-most-illiterate-in-the-developed-world-report-reveals-a6841166.html

It would appear that this is a problem that's been growing for some time, if the present comment thread is any evidence.

[Peter G]

I understand perfectly what Bernie is doing. Life is bad and getting worse they say. It must be the fault of some particular identifiable group and if we can defeat them the sun will shine and rainbows will appear. It's the same old song and dance of politics since time immemorial.

Some how, if you can do something about Wall st,the global trends of the last thirty years will reverse themselves. How we aren't supposed to ask. How exactly is Wall st rigging the economy again?

[Peter G]

Just out of curiosity, what policies do you think Bernie Sanders is advocating vis-a-vis Wall st that will get the economy moving again? I ask because I may be missing some secret one that isn't to be found anywhere. The main policies he is backing are pretty much the same as what Clinton is backing except hers are more comprehensive and include financial industries like insurance and risk management that actually did cause the meltdown in 2008. Those are issues that Bernie likes to ignore by the way.

But if either or both of them have their way then the increased reserve requirements both ask for will mean exactly one thing, less capital available for investment. Now that is probably in some measure a good thing. Here's your problem, that's going to slow the economy down and not speed it up.

[Bob]

How they rig it:

1) send lobbyists to DC and finance candidates around the country to buy enough votes to effectively eliminate regulations that might be inconvenient

2) hire PhD's in physics to take full advantage of the technological advances in market communications

3) hire other PhD's to invent investment instruments that exist only in this dimension and the 9th-12th. You know what I mean - stuff that's really hard to understand

4) take advantage of everyone forced to be in the game that doesn't understand it, which is everyone with a 401(k) and at this point in the global economy, everyone else on the planet

It's simple, really.

[Bob]

It's a feedback loop. Get old anti-intellectual conservatives that hate paying taxes to help defund education. The resulting illiterates become more conservatives, and the cycle of decaying empire continues. We should not be too amused.

[Peter G]

And if you regulated all these things, which would be impossible in a lot of cases, what would fundamentally change in the US economy. Would everyone else in the world stop competeing for resources and markets and jobs. Would productivity improvements that also reduce the need for human labor stop happening? You can do whatever you like to Wall st and it won't change a damned thing to the underlying economy. What this does do is go to the heart of the progressive mythology that the last thirty years were the result of betrayal. Nope. So basically what you do is find a scapegoat and declare that they are the problem. And that's exactly what Bernie has done, identify an enemy that defeating will bring rainbows. They might as well tout the gold standard as the cure for the economy. Or auditing the Fed. Normally I don't really give a crap what myths people chosse to believe but this one happens to be poisonous. And it afflicts both the left and the right. The myth of betrayal is a killer for when the magic juju doesn't cure the problems that really exist what else is there to believe in but further betrayal.

[Bob]

I agree Bernie is flogging a knife-in-the-back scenario and he shouldn't do it. What we don't know is whether he really believes it or not. Also, that doesn't mean financiers can't rig the economy. They've done it before, for example in the 1920's, mainly through the use of leverage and overvaluation. It will take the government and wider society a while to catch up to their games and control them. If we can negotiate with Iran to our advantage we should be able to do the same with Wall St.

[Bob]

Btw, all the rigging did indeed affect the underlying economy. That's just obvious.

[Peter G]

I would say that there was a severe failure to properly regulate financial markets. If you want to call that rigging fine. They were rigged to fail. Actually I would go farther and say there was a failure to even understand them. Steps to fix this were needed and so Dodd Frank. Like all legislation it can be improved but none of what Bernie plans to do addresses that which needs to be done. It is a problem and one of many. But it is absolutely not The Problem. Nothing and I mean nothing that Bernie plans to do with regard to financial regulation will address these larger concerns.

[Bob]

Thing is, if the government is paid off not to regulate and other interested parties constantly flog the idea the government should not regulate it's hard to blame the government for not regulating. There were precious few in the Republican administrations interested in doing it. In fact they liked to put people in charge of regulation that were philosophically opposed to regulation. I see this as a recurring theme in the Various States of America.

[Tom Benjamin]

I think it is hopeless to regulate. We arrived in this byzantine place because every regulation just made the con more complicated. Wall Street thrives on complexity. They understand it, nobody else does. This is why Bernie has no specifics to offer.

There are some very simple sensible things they can do. I like the idea of a transaction tax that would eliminate high frequency trading and one of the scams. But in general, the more they simplify the regulations, the more transparent the system will be.

What you have to do to protect the system - and this protected the Canadian system in 2008 - is limit the leverage firms can exercise. Instead of letting them risk $30 for every dollar they have in assets, limit the risk to $10 for every dollar they have in assets. If they are too big to fail, make it very difficult for them to fail.

I don't think government can protect the investor from Wall Street any more than they can protect the consumer from Volkswagen.

[Bob]

It took the New Deal to get the balance between finance and the general economy back after the Great Depression. Those regulations kept things on a fairly even keel for about 40 years. What's going on now is the next iteration. It's more complex, but the government can hire smart people too. The US would turn into something like a banana republic in short order without regulation of the financial sector.

[Peter G]

I prefer to judge regulations on their merit. will they achieve what is desired and what undesired consequences will those regulations cost. The perception that even debating the pro and cons means anyone who doubts the efficacy of a given rule is means that one must have been paid off is pernicious. If they were paid off it was probably in votes from voters. This is why I find the insurgencies from both the left and right broadly equivalent. I suppose it is a matter of expectation. I expect elected local politicians as in congressman and senators to representent local industries. As Bernie does with the insurance industry. Hate corproations? Well don''t go into politics because if you aren't prepared to fight fiercely for whatever your local industries might be then you will be a terrible reprentative of the people you are supposed to represent. Those may be mining or forestry or tobacco or agriculture in general or manufacturing or the finance industry. It does not matter. The aggregate of these interests is what makes up any given party. So Bernie's position that all the people who do these things are the problem. For that is what his campaign is based on, first taking back the Democratic party from doing exactly what they are supposed to do if they want to get elected. And attacking their personal integrity naturally. i expect if he keeps it up Bernie will be every bit as popular with the Democratic party as Ted Cruz is in the Republican party. My team sucks is not actually the best possible camapign strategy. it is the strategy of desperation.

[cgordon]

Whether you attribute printing zillions to Obama or Bernanke is probably less relevant than the fact that both no doubt knew that the QE path was not the best option, but they also both knew that Congress wasn't going to take any action so they did what they felt they had to.

[cgordon]

Perhaps the cleverest trick that Wall Street has pulled off is convincing the public and Congress that finance is part of the real economy. Finance is the servant of the real economy. Other than that, it serves no purpose. Wall Street must be made to serve the real economy, just as the economy must be made to serve people.

[cgordon]

I have no problem with politicians supporting local industries, as long as they remember that those industries exist to serve people, and not the other way around. There are just too many examples of industries becoming parasitical. To me, you can't just go around saying "jobs."

[cgordon]

I understand your problem with the term "rigging," but the fact is the system was deliberately set up to do exactly what it is doing. By and large, by those who are getting rich off of it.

[Peter G]

It wasn't actually the best option David. The best option was stimulus spending but there were a bunch of idiots, known as conservatives, who wouldn't allow the best option. So quantitative easing it was. Which by the way is not the same as printing gazillions. If it had been there would probably have been some of that inflation you've been predicting every minute but which still hasn't appeared.

[Peter G]

I am not entirely sure what that means. But I'll take it at face value and assume that it means that it makes the economy run. If it does that well than that is as much as you could expect it to do. The cardinal sin that Wall st committed to cause the meltdown was to lend money to people it had no business lending money to.

[Peter G]

I will refine that. They exist to serve the needs of their customers to the benefit of their shareholders and the larger public through tax contributions.

[cgordon]

I'm still working on this so bear with me (feedback welcome)

The real economy is what creates material benefits for individuals and society. Finance is a mechanism for getting the real economy the resources it needs to do that. Finance is not an end in itself and by itself it creates no material benefits. At best it's a servant, at worst it can be parasitic if it is allowed to take an unearned share of the wealth that is created, or if it hampers the real economy in pursuit of its own interests.

[Bob]

In my opinion, which I readily admit is based on no formal training, you have a good grip on the definition. The job of finance is to direct money to worthy projects likely to produce a positive return. This has been abandoned in favor of making a return by fleecing people by claiming "the market" is a type of secular god that wisely looks after us all.