My friend, who agreed with me in principle, defended Obama's policies by saying that Obama is conducting the bailouts 'under the guidance of... Bernanke, Summers, Geithner' and that he merely 'continued the bailout started by Bush'. This is a common argument. The gist of it is that things are bad, we need to fix them, but there is no need to hurry. In addition, it justifies the errors of the current president by claiming that similar errors were committed by his predecessor.
For the purpose of this analysis, we can ignore the fact that Geitner, Bernanke, and Summers were appointed by Obama himself. If someone believes that bailing out financial institutions in this way is a good policy - that's fine. What piques my curiosity is that people who think it is a bad policy are nonetheless willing to accept it and even justify it, and do not see any urgency in eliminating it.
Let's look at the bailouts. The US Government's TARP program allocated $700 billion to purchase "toxic assets" from a variety of financial institutions. Financial companies made bad investments, the US government is relieving them of these investments using public money. For the purpose of this bailout, more than $2,300 were taken from every American citizen and were given away to the banks. If you add to it the bailout of AIG, the amount is over $2,600. If you take into account all the financial obligations the US government undertook on behalf of the American people as part of the bailouts of 2008 and 2009, the amount per citizen is close to $40,000.
By any measure, this is the biggest robbery in human history (some may call it - redistribution of resources). It also represents the death of a lot of what America stands for: The government is punishing innocent people - 300 million of them - for the errors of a few powerful corporations, and at the same time allows these corporations to continue with business as usual. As Nassim Taleb said in a recent panel discussion, 'it's not communism, it's not socialism - it's the worst of both'.
Contrary to popular opinion, I am not blaming the bankers for this. The bankers are not elected officials, and we should not expect them to pursue anythign other than their own personal profit. The bankers did not take any money from the American people. The government did, and since the government is accountable to the people, the only two parties in this discussion should be the people and the government.
In any case, despite all the drama, most people don't seem to think that reversing this policy is urgent, or that Obama is particularly wrong for not acting decisively against it. Note that we are talking about people who agree that the policy is bad; they just don't think it is such an urgent matter.
To put this issue in perspective, let's examine another controversial issue: America's detention facility in Guantanamo Bay. According to a recent report by Human Rights Watch, there are currently 275 inmates in the detention facility. They are not American citizens. They allegedly took part in violent activities against American citizens. There are various reports of human right abuses that are taking place in Guantanmo. Terrible images have been leaked, showing the way in which inmates are treated in violation of American and international law. It is a terrible thing, and I personally think the facility should be closed.
One of the first things Obama did upon taking power was to announce his plan to close the detention facility in Guantanamo Bay. This issue has been a cause of Liberal (not only...) activists for a long time. It was an urgent thing, and Obama attended to it immediately and decisively. The centre - like TARP - was established under President Bush, and it was justified by concerns of National Security. Still, Obama felt comfortable to act against it - and voters were unequivocal in their support.
So how come Obama, and his supporters, do not see a similar urgency in reversing and investigating the largest robbery of American history? A robbery that not only affects each and every american personally, but also challenges the country's ideological foundations?
How come, wen we see a suspected terrorist being treated like an animal, our heart melts and the better angels of our nature spring into full attention, but when we read about some complicated financial program - we figure it is probably not such a big deal?
I guess the answer lies in the nature of contemporary culture. Our reality is dominated and mediated by images. We hardly experience anything directly anymore. And so, we are only mobilized by things that we can see, by things that can shock us - physical violence, large crowds; we are only moved by sound-bytes and strong images - short and conclusive bits of information that can be digested immediately.
In second thought, this observation also applies to the situation with Guantanamo. After all, president Obama appeared on television and said that he will close the detention centre. The detention centre, however, is still open, and some even say that the human rights abuses are getting worse. Still, the issue is now off the mainstream agenda.
The president gave a nice speech, the images were shown. What happens in reality doesn't matter that much.
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