The Obama Administration’s failure to prosecute the banksters in the wake of the Wall Street Crash has been an ongoing topic here at Camelotkidd so I’m glad to see a new podcast exploring the subject.
I’m referring to Meltdown, a new podcast series from investigative journalist David Sirota and documentary filmmaker Alex Gibney about the 2008–9 financial crisis and its aftermath that debuted last week.
The meltdown they’re referring to is the Obama Administration’s political response to the Wall Street Crash— a response Sirota asserts is deeply interwoven with both the Democratic collapse of 2016 and the continued rise of the extreme right. “This is why,” he explains at the end of the series’ first episode: “. . . the meltdown of 2009 is this generation’s pivotal moment. Not the bank failures or the stock market crash in 2008. Those were obviously disasters. But the political disaster that came after. Our government stopped working for its citizens during a moment of profound crisis. We need to unbury this moment, to reexamine it. Because the failure of government then gave us the world we live in now.”
Causing some 2.5 million home foreclosures between 2007 and 2009, the crisis liquidated working- and middle-class bank accounts, destroyed lives, and spread a plague of misery and despair throughout the US body politic. Wall Street would be bailed-out with trillions of Federal spending, while ordinary citizens caught in predatory mortgage schemes would be left to twist slowly in the wind. Home foreclosure, in fact, became a burgeoning industry unto itself, as ad hoc courts worked hand in hand with big banks to eject people from their homes.
Even though there was copious evidence of elite criminality, nobody went to jail. Well, Bernie Madoff went to jail, but he ripped off rich and powerful people, and we can’t have that now can we?
Obama was a first-term Democratic president with a majority in Congress and an uncompromising Republican opposition. A country disillusioned by a previous administration’s corruption and mismanagement. A working class struggling through an economic downturn. But, a political elite and corporate media calling not for aggressiveness and boldness, but for half measures and compromise. Even worse, calling for austerity in the face of the economic calamity.
If this sounds familiar, it is not only because it describes this current moment, but because it is the experience we lived through 12 years ago – a political meltdown that destroyed many Americans’ remaining faith in their government, and ultimately birthed Donald Trump’s presidency.
That political meltdown crushed faith in hope and change, and led straight to the Tea Party and then to MAGA. And if Democrats continue making the same choices again, we should expect the same results – or worse.
We got lucky with Trump. The next right-wing populist will be more competent.
Gonzo journalist Matt Taibbi, who’s perceptive analysis of the economic and political factors that led to Trump’s victory, has nothing but praise for the new podcast. “What happened over the course of the next eight years, when the dream of forever-rule evaporated and the Democrats found themselves having to explain being vanquished by a foul-mouthed game show host, is the subject of Meltdown. To this day, the all-but-mandatory explanation for the Democrats’ 2016 disaster is a combination of racist reaction and Russian interference. Though race certainly played a significant role, the deeper explanation, still taboo, is the perception that the Obama administration’s handling of the 2008 crash was both corrupt and profoundly disillusioning. When the SS America struck an economic iceberg, the country watched Democrats fill the lifeboats with guilty bank CEOs, then waved from the horizon as everyone else went down with the ship.
Meltdown not only tells that story, it connects it to the Democrats’ political present and future. Sirota describes how the party’s misplaced faith in a Solomonesque business model — take money from Wall Street donors and deliver big for them on policy, while making gestures of sympathy toward the wider base of voters — opened the door for a canny political opportunism of Donald Trump. The psychology of the Democratic Party is to believe it’s always enough to be a little better, a little more sane, a little less craven than Republicans, but voters don’t see it that way. In a crisis, a leader in full control of the government has to act decisively, and be seen doing so, or risk being replaced by someone promising such action.
Trump hammered Obama on corruption and favoritism, painted Hillary Clinton as the sequel agent of Wall Street, and won making promises of sweeping action. This, Sirota says, is how “hope and change became MAGA and mayhem.” In an interview with Useful Idiots, he explained how the series was intended to be a wakeup call for Democrats, who continue to head off real examinations of their recent past, inviting, perhaps, repeats of the same self-inflicted disaster. Many disasters followed the 2008 financial crisis. But possibly the worst was the mass popular disillusionment that resulted from Barack Obama’s failure to help the victims and punish the wrongdoers — a failure that led to Donald Trump.”
In retrospect I’ve come to believe that the Obama Administration was the culmination of the Democrats long march from a party that represented workers to one that represented finance. Wall Street definitely knew something the rest of us didn’t, as the amounts of money Obama raised from investment banks attested. Then there’s the fact that one month before the presidential election of 2008, the giant Wall Street bank Citigroup submitted to the Obama campaign a list of its preferred candidates for cabinet positions in an Obama administration. This list corresponds almost exactly to the eventual composition of Barack Obama’s cabinet.
My liberal friends are worried about me because of my relentless focus on the Democrats even though the Republicans are worse. I get that people are deeply scared of an authoritarian GOP and growing threats to our democracy but as I’ve said before–we know Republicans are evil. It’s their brand. But, if we’re to have any chance of turning this sucker around we need a party that represents us not a bunch of mealy-mouthed traitors. Are the Democrats a political party that’s capable of fighting for justice or simply the lesser-evil?
The timing for this series is almost perfect as the Democrats are gutting the Build Back Better series of policies that were aimed at helping Americans hammered by the economic disaster brought on by the pandemic. This behavior is completely at odds with the response to the Great Depression, and not really adequate to the crises that we face. It’s the opposite of the cautionary tale in meltdown: the FDR story. Franklin Roosevelt came into office at the start of Great Depression and made very explicitly clear, that he understood the connection between economic policies and democracy. Basically, if you get into office making economic promises and you try to deliver on those promises, that’s the best way to fight off the rise of fascism. If you don’t deliver for people, right-wing authoritarians and fascists are able to make an argument, an anti-democratic argument, “Hey, they didn’t solve your problems. Democratic institutions won’t solve your problems. We will.” FDR explicitly made clear that his New Deal was not only morally necessary, not only economically good policy, but absolutely crucial to tamping down public support for fascism in America, which was on the rise at the time.
The latest Democratic betrayal shows that no progress can be made without changing the institutional structure of American politics.
Perhaps it’s a Whig moment?
To have that happen we need to make sure that the Democratic Party loses so irrevocably in 2022 and 2024 that it goes up in a puff of smoke, never to be seen again.
Burn it all down.