America Loves a Race


John Edwards is surging on populist themes, but Matt Cooper thinks American business should not worry too much if he wins.
Edwards’ Senior Economic Adviser Leo Hindery is mentioned in the Cooper article. I’ve had numerous discussions with Hindery — who is not anti-global but is pro-American industry and pro-American middle class.
The real question that has to be struggled with at some point is whether the multinational corporation should receive benefits, access, privileges, and the imprimatur of being American if they turn out be tools of other nation states. I don’t believe they should — but in my book, this makes rational sense as a centrist American. If the populists think that way too, all the better.
— Steve Clemons


14 comments on “America Loves a Race

  1. Carroll says:

    I can probably get away with inserting this on this thread because it mentions one of SC’s interest, Japan…LOL. But really, it makes a good point about what the candidates should be talking about…our own mess here at home…and how we keep having these disasters brought on us by our supposed “elite’ minds minding and not minding the store
    Blindly Into the Bubble
    When announcing Japan’s surrender in 1945, Emperor Hirohito famously explained his decision as follows: “The war situation has developed not necessarily to Japan’s advantage.”
    There was a definite Hirohito feel to the explanation Ben Bernanke, the Federal Reserve chairman, gave this week for the Fed’s locking-the-barn-door-after-the-horse-is-gone decision to modestly strengthen regulation of the mortgage industry: “Market discipline has in some cases broken down, and the incentives to follow prudent lending procedures have, at times, eroded.”
    That’s quite an understatement. In fact, the explosion of “innovative” home lending that took place in the middle years of this decade was an unmitigated disaster.
    But maybe Mr. Bernanke was afraid to be blunt about just how badly things went wrong. After all, straight talk would have amounted to a direct rebuke of his predecessor, Alan Greenspan, who ignored pleas to lock the barn door while the horse was still inside — that is, to regulate lending while it was booming, rather than after it had already collapsed.
    I use the words “unmitigated disaster” advisedly.
    Apologists for the mortgage industry claim, as Mr. Greenspan does in his new book, that “the benefits of broadened home ownership” justified the risks of unregulated lending.
    But homeownership didn’t broaden. The great bulk of dubious subprime lending took place from 2004 to 2006 — yet homeownership rates are already back down to mid-2003 levels. With millions more foreclosures likely, it’s a good bet that homeownership will be lower at the Bush administration’s end than it was at the start.
    Meanwhile, during the bubble years, the mortgage industry lured millions of people into borrowing more than they could afford, and simultaneously duped investors into investing vast sums in risky assets wrongly labeled AAA. Reasonable estimates suggest that more than 10 million American families will end up owing more than their homes are worth, and investors will suffer $400 billion or more in losses.
    So where were the regulators as one of the greatest financial disasters since the Great Depression unfolded? They were blinded by ideology.
    “Fed shrugged as subprime crisis spread,” was the headline on a New York Times report on the failure of regulators to regulate. This may have been a discreet dig at Mr. Greenspan’s history as a disciple of Ayn Rand, the high priestess of unfettered capitalism known for her novel “Atlas Shrugged.”
    In a 1963 essay for Ms. Rand’s newsletter, Mr. Greenspan dismissed as a “collectivist” myth the idea that businessmen, left to their own devices, “would attempt to sell unsafe food and drugs, fraudulent securities, and shoddy buildings.” On the contrary, he declared, “it is in the self-interest of every businessman to have a reputation for honest dealings and a quality product.”
    It’s no wonder, then, that he brushed off warnings about deceptive lending practices, including those of Edward M. Gramlich, a member of the Federal Reserve board. In Mr. Greenspan’s world, predatory lending — like attempts to sell consumers poison toys and tainted seafood — just doesn’t happen.
    But Mr. Greenspan wasn’t the only top official who put ideology above public protection. Consider the press conference held on June 3, 2003 — just about the time subprime lending was starting to go wild — to announce a new initiative aimed at reducing the regulatory burden on banks. Representatives of four of the five government agencies responsible for financial supervision used tree shears to attack a stack of paper representing bank regulations. The fifth representative, James Gilleran of the Office of Thrift Supervision, wielded a chainsaw.
    Also in attendance were representatives of financial industry trade associations, which had been lobbying for deregulation. As far as I can tell from press reports, there were no representatives of consumer interests on the scene.
    Two months after that event the Office of the Comptroller of the Currency, one of the tree-shears-wielding agencies, moved to exempt national banks from state regulations that protect consumers against predatory lending. If, say, New York State wanted to protect its own residents — well, sorry, that wasn’t allowed.
    Of course, now that it has all gone bad, people with ties to the financial industry are rethinking their belief in the perfection of free markets. Mr. Greenspan has come out in favor of, yes, a government bailout. “Cash is available,” he says — meaning taxpayer money — “and we should use that in larger amounts, as is necessary, to solve the problems of the stress of this.”
    Given the role of conservative ideology in the mortgage disaster, it’s puzzling that Democrats haven’t been more aggressive about making the disaster an issue for the 2008 election. They should be: It’s hard to imagine a more graphic demonstration of what’s wrong with their opponents’ economic beliefs.


  2. Francis says:

    What?!! My comment was not meant as anti-Jewish at all. I said the U.S. LOVES Jews. What part of that is beyond your comprehension?!! I would apologize for them being taken that way, but that would do a disservice to my intent, which was pro-Israel. Let me add that I’m Jewish, and love the United States for standing up for Israel, especially during the Bush administration. Do a better job parsing very straight-forward comments next time!


  3. PissedOffAmerican says:

    Me thinks Francis morphed into DC to spread a little division.
    But hey, I’ll bite. Care to show me an “anti-jewish” comment here, DC?


  4. DC says:

    Why so many comments on this site are anti-Jewish, while Steve Clemons is so far removed from that perspective that it is a shame to mention it, is beyond me. No other mainstream political blog contains such vitriol. It is out of place here.


  5. Francis says:

    And that race is the Jewish race! Thank God.


  6. Carroll says:

    Would anyone be shocked if they looked into all the nooks and crannies where US Multi Nationals have gotten big breaks from this gov. to the disadvantage of US workers and revenue.
    North American Free Trade Agreement (NAFTA) signed in 1993.
    This act decreed that goods could be produced in Canada or Mexico and sold to the United States with no import duties, whatsoever. No other sector was so profoundly affected by this act as the auto industry. In fact, automobile and auto parts trade make up 20% of all intra-NAFTA trade.[18]
    “The measure was both simultaneously a huge blow to American industrial auto workers, and a huge boon for American multinationals who were able to utilize low wage Mexican labor, to produce products to be sold to the U.S. market.”
    Now they will argue that if US multi’s weren’t doing this the foreign countries would be forming their own industries to do it and US based companies and products wouldn’t be competitive…and the answer to that is if foreign good were taxed with import duties to make their prices more in line with US goods..the consumer, not the multi nationals would be the “deciders” in the so called free market. Just making the prices even somewhat closer on foreign and domestic goods would keep both the foreign producers and the US producers both in business as the US has a large enough variety of both price and quality buyers to support both levels.
    And the fact that they argue that this provides jobs in struggling foreign countries and better prices for US consumers doesn’t matter, it’s like telling US labor we are cutting their legs off but not to worry they can buy some low cost prosthetics from China.


  7. rich says:

    “The real question .. . is whether multinational corporations should receive benefits, access, privileges . . if they turn out to be tools of other nation states.”
    Where do you stand on corporate receiving same but refusing to shoulder a reasonable proportion of the overall tax burden?
    I refer, of course, to the practice of ‘incorporating’ in Bermuda or the Caymans (i.e., filing a piece of paper) while retaining operations, offices, and residency on American soil–thus evading taxes but retaining the “access, privileges” of an ostensibly American corporation.
    Plain and simple, this is tax evasion. If I pointed out the Constitution, as a higher law, guaranteed my right to travel, and then slipped over the county line and skipped for Rio without coughing up my taxes . . . it’d rightly be viewed as tax evasion.
    No lawyer can argue theres any difference. That no one with Establishment credibilty has insisted this be redressed only speaks to the overt willingness to divide America, sapping the country of its due resources, but worse, of its unity of purpose and moral compass (just/righteous compass).


  8. FGF says:

    The fact that Edwards hasn’t gotten his due from the media for his electability – beyond Iowa – has been an annoyance. That he consistently outperforms all other Democratic candidates in head to head polls against every GOP challenger isn’t worth much I suppose. If he gets the nomination will his campaign have financial issues in the general? Maybe, others know more about that than I do. But his broad appeal to Independents is a very undervalued asset.


  9. DonS says:

    Dan, ALL excellent points. My thought is not that much can be done to curb corprate excess (not to mention the radical skewing of income distribution in general), but politically its an issue that a symnbolizes a republic off the tracks.
    As a trial lawyer who made megabucks himself fighting the big guys, not only can Edwards think on his feet, come prepared every day to do battle, and ferret out strengths and weaknesses in strategy, etc. etc., he may just have some righteous indignation in his blood.


  10. Don Bacon says:

    US corporations securely established their positions at the top of the economic food chain fifty years ago, and have been consolidating their positions ever since. They don’t have to worry about any national politician, they have all been bought. The best examples are the Dem plans to expand the trillion dollar medical insurance industry without any serious consideration of single-payer plans characteristic of other advanced countries.
    The Fourteenth Amendment guaranteeing equal protection of the laws was used, oddly enough, to halt the Florida recount in 2000 and give the presidency to GW Bush. Different counting procedures damaged him, the story was told.
    Corporations, while they have long ago been provided the equivalency of personhood by the Supremes, with the accompanying benefits of personhood, are nevertheless allowed to trample the rights of US citizens who have been demonstrably damaged by corporate actions. But the American people are not worthy of the same equal protection consideration that Bush received from the Supremes. That’s not right, but no politician would endanger his financial status by saying so.
    Bush and the corporations win, the people lose–the idea that is America.


  11. DonS says:

    Edwards certainly has been sounding populist on the coprporate exccess issue — and not a moment to soon I say. There is political hay to be made in the obscene culture of corporate executive pay (even,or especially, those execs who have been instrumental in fleeecing the public at large).
    That said, Edwards also sounds reasonable even, heaven help us, down to earth. I heard a long clip from a speech to an environmental group that was entirely sensible, informed and presented in a no nonsense way. No theatrics either, I might add.
    Having been on the campaign trail in ’04 is a valuable experience, too, I would think.
    I guess what I’m saying is that I have been listening for threads of common sense as a quality not injected by focus groups or handlers. With his wife’s cancer diagnosis, his defeat in the election, and the time to reflect on that, we may just have an individual who has evolved some and garnered some maturity over and above the usual political schtick.
    Anyway, we know its just a keystroke or two away from the critical mass that takes an also ran into the media darling and gets the buzz started in the country. Or vice versa.


  12. Carroll says:

    I am liking Edwards more and more. I am also sure he understands the “balance’ necessary between labor and capital. That balance has been out of whack for a long time.
    Keeping all the playing fields level is the number one job of a democratic government as far as I am concerned.


  13. DC says:

    I think Edwards’s rhetoric has been directed less against big corporations than the elites who benefit from running them. Doing away with their tax cuts, for example. He’s also targeted specific industries, such as insurance/health care. So, generally speaking, I agree his policies would not necessarily be unfavorable for business.


  14. FaceOnMars says:

    Steve, your postition seems reasonable enough to me; however, do we apply the same metric to large organizations of do-gooders who strive to make the 3rd stone from the sun a more equitable and sustainable environment for all?


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