I think it’s time the Obama team turns the stategy reins over to me. Ever since the misbegotten selection of the clownish Joe Biden, Obama and the entire Democratic party seem off their game. (Did I not predict Biden would be a continual embarrassment? What a lost opportunity!) They have no game. They have no line of attack. It’s either been conceding that George Bush was right about the surge (as Obama admitted to Bill O’Reilly, rather than focussing on the mismanagement of the war from about Day Three in a way that required the enormous unnecessary loss of life for five years). Or it’s gotten itself obsessed with their opponent’s vice presidential pick in exactly the snotty elitist way that seems to confirm what I believe to be a mistaken impression of Obama.
What the campaign needs to do is focus on Wall Street. On what FDR called “the malefactors of great wealth”. On the fact that the Republican party through its obsessive, greedy, lobbyist driven fetishizing of financial de-regulation has allowed the economy to be turned into a casino for the super-rich which has driven us into ruin by turning the hard earned money of the rest of country into mendacious instruments of greed on a vast scale–the entire “derivatives” scam that is behind the subprime crash-threatening fiasco going on now.
Yes, it’s true that the Clintonians were in bed with them (and Biden was a shill for the credit card industry) but six years of pure Republican rule handed the economy to the hedge fund creeps, virtually turned the economy into a hedge fund, a huge financial scam. Rather than re tooling it for the new century, they retooled financial instruments for their own disgraceful enrichment.
This is the year for a populist assault on these greedheads who once again have demonstrated that their unchecked, unregulated chicanery outruns their sense of responsibility. So what if many are Democrats, the more the shame. Obama should run against them too. I think there is a vast untapped resentment out there against the sharpies who have ended up bankrupting and selling out our economy. It’s time to hold them responsible, and in a democracy a presidential campaign is the time and the way to do it.
This is a huge story and it fits into a century’s old Democratic populist narrative that could have great appeal to the people who are now drawn to Sarah Pain because of resentment against the elites who have put working people onto the street.
“Change” is no longer enough. Even if you don’t buy the “maverick” meme of the GOP ticket (I don’t), it appeals to the vast majority of the country who know that the scam artists of great wealth have screwed up and screwed up bad. And that while they won’t go broke or go to jail (most of them), they have plenty of resources to fall back on while a great majority of voters don’t.
The biggest financial scandal in American history is going on entirely unacknowledged by both campaigns, but especially by the Democratic party which is supposed to be the guardian of the little people against Big Finance. It sounds old fashioned, “Big Finance”, and maybe the Democratic Party has been too complicit and populist have appealed before. True most people don’t hate the rich, they want to be rich. But most people have a sense of decency that the malefactors of great wealth have shown they lack. And here’s where Obama can–should–be a change agent. He’s not complicit. He should get angry about this. He should denounce those in his own party who have gone along on the lobbyist greased road to ruin. It should be his big issue. Otherwise, is there any real difference between the two parties except empty slogans.
Exchange “change” for a focus on the Exchanges and you’ve got a winning issue. Don’t say I didn’t tell you so.
Ron Rosenbaum, Writer 
As an ex Commodity Trading Advisor and commodity fund operator, I still have many friends and contacts in the hedge fund industry. That industry, like academia and Hollywood, is solidly Democrat.
If your suggestion of “change” even comes close to over regulation, then watch more and more exchanges and contracts rapidly move away from the US. The Dubai Mercantile Exchange will greet with open arms.
PS. The tone of your article might lead many to believe that hedge funds are all reward and no risk. They earn their return, no free lunches.
Comment by PC14 — September 11, 2008 @ 1:05 pm |
” is there any real difference between the two parties except empty slogans? ”
You don’t know how happy I am to hear someone with a voice say that. I hope you are right and it’s not too late for Obama and the Democratic party to change their course on this issue. My guess is that the ship of kowtowing to big finance sailed a few years ago.
If that’s the case and the Democrats can’t/won’t escape the steely grasp of big business politics, the question becomes what can the average vote who actually cares about this issue do about it?
The answer used to be, vote 3rd party. The mere utterance of that phrase in Demo circles has become blasphemy of the highest order, second only to the name of the arch-fiend himself, Ralph Nader.
So I leave it up to any conscientous voter to decide how best to use their vote. If you care about the fact that big business increasingly controls and corrupts national politics, you need to make a decision. The way I see it, you have 3 choices. 1. You can stick it out and continue to hope that the Democrats will come around. 2. You can transfer your hope to the ‘return to Reagan’ Republicans who say they can help the small business succeed, thus enraging the corporations (yeah right). Or 3, you can swallow your fear and vote for a 3rd party candidate who opposes a corporate government but who you know has almost no chance of winning.
The arguments for option three are becoming ever more convincing. If, as you say, there might not be a significant difference between the major parties anymore, is the difference in four years between a Democratic or Republican president worth sacrificing your ideals for? It’s a big question and one many wish they had answered “yes” to in 2000 when they voted for Nader. But were those votes for Nader really wasted? Maybe not. In theory, it should have taught the Democrats that their big business policies were costing them many supporters. What it actually did was teach them to adopt the Republican tact of ‘scaring’ the voters into electing their candidate out of the fear that the alternative (another Republican president) is so disastrous that we can’t afford to consider it. The net result was a Democratic party even more similar to the Republicans than they were before. Which is as good a reason as any to withdraw support from either major party. If enough voters desert them, all the corporate money in the world won’t win them an election and they’ll have to come back around to listening to the little guy. At least, that’s the idea.
Comment by Kasey Rasmussen — September 11, 2008 @ 1:12 pm |
All the big hedgies, such as Stephen Cohen of SAC Capital, are giving to Obama. Why? Because his tax policies mean that more elite capital will flow to the hedge funds and offshore for tax avoidance purposes. The Clintonians not only mimicked the Wall Street Republicans they superseded them with new financial instruments (fundamentally ways to maximize leverage to black hole proportions). Terry McCaulliffe actively recruited pirates like Garry Winnick and Larry Ellison; these folks see themselves as enlightenered liberals precisely because of the abracadabra of abstract capital formation. Why do you think Obama vaguely repeats the change mantra ad nauseum and focuses only on narrow policies based on taxing income rather than a wealth tax and cracking down on commodities speculation, et al.? It is a plain fact that McCain is a slightly better bet to bring down the hedgies. Obama is the real deal stylistically. On actual economic policy, he is a fraud.
Comment by charlie finch — September 11, 2008 @ 1:46 pm |
The money is already moving abroad. It is a matter of slow or fast pain for the U.S. economy. The immediate results may be brutal, but are necessary. Commodities speculators must take delivery on said commodities. There must be stiff margin requirements for hedge fund speculations. Offshore holdings by U.S. citizens and corporations should be punitively taxed. Illegal immigrants should be registered and put on the tax rolls and made legal at their worksites. Many financial instruments, such as the S&P 500 “basket of stocks” play and a whole host of derivatives plays must be outlawed. Glass Steagall (firewall between investment and commercial banks) must be reimposed. Tariffs on select imports to allow US manufacturing products to regain a US market. The United States must rearm economically, because we are already being killed by globalization. Hedge speculators who make the “capital flight” argument are merely saying “heads we win, tails we lose”
Comment by charlie finch — September 11, 2008 @ 2:33 pm |
Not only would this line of attack be misdirected, if aimed at the GOP, but also a snoozer. Futures contracts, options and other derivatives are not going to get any traction with the American voters. The topic is way too complicated and certainly obscure enough to offer very generous opportunities for either party to turn it into an issue that does nothing more than bring on instant headache, caused by confusion, to the average voter.
The remote control gets picked up real fast as Joe Biden, during the VP debate, responds to the question: “Senator Biden, what is you party’s position on margin requirements for derivative instruments.”
Comment by PC14 — September 11, 2008 @ 2:58 pm |
It’s probably time to stop hyping The Secret Parts of Fortune to my friends, I guess.
Anyone who has spent time in finance knows that the higher you look, the more Democrats you see. They’re simply more sympathetic to the very concept of market-rigging.
Mr. Rosenbaum, take a couple weeks and research these greedheads of which you speak. They’re voting Obama right along with you. Your basic ignorance is pretty shocking.
Comment by oh boy — September 11, 2008 @ 7:54 pm |
Okay, I take it back, I’m going to keep hyping The Secret Parts of Fortune. Great collection.
Comment by oh boy — September 11, 2008 @ 8:04 pm |
“..not going to get any traction with the American voters.”
I disagree, and think this line of attack could gain traction. The problem is that the hedge fund guys are a huge part of Obama’s fundraising and the campaign needs to squeeze every penny between now and November….
Comment by Jim,MtnViewCA,USA — September 11, 2008 @ 10:04 pm |
If I recall, Chelsea Clinton “works” at one of those hedge funds. I say “works” because I don’t know if she actually does anything, or just gets paid to lend her name and her parents’ connections to whomever her nominal bosses are. But, no matter, it’s all a GOP scam anyway according to Rosenbaum!
Sigh. Take some time and read the post which makes explicit that Dems are complicit in this as well. But it’s the Repubs who presided over it when in power. I’m all in favor of Obama attacking his own party members for their complicity. There are more voters of both parties hurt by hedge fund greedheads then those doing the hurting. By far. r.r.
Comment by Dennis — September 12, 2008 @ 12:19 am |
From the NYT, 9/11/3003.
New Agency Proposed to Oversee Freddie Mac and Fannie Mae
By STEPHEN LABATON
http://query.nytimes.com/gst/fullpage.html?res=9E06E3D6123BF932A2575AC0A9659C8B63&sec=&spon=&pagewanted=print
The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.
Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac….
”The regulator has not only been outmanned, it has been outlobbied,” said Representative Richard H. Baker, the Louisiana Republican who has proposed legislation similar to the administration proposal and who leads a subcommittee that oversees the companies. ”Being underfunded does not explain how a glowing report of Freddie’s operations was released only hours before the managerial upheaval that followed. This is not world-class regulatory work.”
Significant details must still be worked out before Congress can approve a bill. Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.
”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”
Representative Melvin L. Watt, Democrat of North Carolina, agreed.
”I don’t see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,” Mr. Watt said.
Comment by edh — September 12, 2008 @ 5:38 am |
Just like a politician to screw up and then blame someone else.
The problems on Wall Street are caused by Idiots in Washington. You’ve got Senators screaming about racism when people with bad credit can’t get mortgages. You’ve got the government rewarding political staffers with Fannie Mae jobs and then driving out good mortgage buyers.
We need less regulation and less government, not more. But no one ever blames a muddle headed leftist Dem who’s “trying” to help people. The people who screwed up aren’t hedgies, anyways. They’re the Anthony Mozillos of the world. Of course the tanned one (head of Countrywide) got lawmakers on his side by giving sweetheart loans. And then Barack is the #3 recipient of Fannie Mae donations, after Dodd and Kerry but before Clinton. Hilary only received 99k, while Dodd received 133k. Barack needs to deal with the beam in his own eye before anything else.
Further, you should learn something about your subject before pulling out one of the good ol Marxist lies. People who blame banks killed more than 100M people last century, you’d think that you’d be more than a little bit ashamed of that. I guess you just want to get the genocide cranked up again.
This last paragrah has to qualify as the most ignorant and malicious I’ve ever seen. People who eat fish killed more than 100M people last century, therefore anyone who eats fish is a mass murderer. A classic that should be taught in high shcool logic classes (and blog history). Furthermore the ignorance of American history is fathomless. Non Marxist democratic populism has been a very American deomocratic political tradition for more than a century and a half since that communist Andrew Jackson (does that name ring a dim bell?) ciriticized the National Bank. Clearly we need educational reform as much as financial reform. Both parties screwed up and deserve blame. Phil Gramm’s deregulation legislation that enabled investment houses and banks to run wild didn’t help. Nor did Democrats. Sweep them all out.r.r.
Comment by hey — September 12, 2008 @ 5:41 am |
PC14 has it right. One might expect people with that much money to be reliable Republicans – and who knows how they’ll actually vote – but at least publicly they are as far to the left as any studio executive or talent agent. A number of my hedge fund/private equity friends spent the other evening at the tasteful riverside cottage of one John Bon Jovi, having paid almost $31k apiece for a grip and grin with Obama.
Besides, the whole blaming Wall Street thing was tried in the 1930s. Didn’t work out so well.
Comment by ronbo — September 12, 2008 @ 5:50 am |
Oh, if only we had the right president, then he would know which levers to pull and which buttons to push in the precise order that would keep the milk and honey flowing in the economy! It’s so simple! The government runs the economy like it was a machine, right?
Or do I have “President” confused with “God-King”?
Oh well. In any case, we must do everything we can to prevent recessions, bubbles and imbalances in the economy. Those are unnatural and useless events. Right?
Comment by K T Cat — September 12, 2008 @ 5:51 am |
Perhaps you’ve missed it, but the Giant Financial Scandal right now is the near-death experience of Fannie and Freddie- whose scam artist former bosses are now with the Obama campaign. But then, why not? F&F were created according to liberal dogma, and their reckless overleveraging a direct result of the promised Treasury backstop. When will people ever learn?
Comment by Bill — September 12, 2008 @ 5:57 am |
There’s also the little matter of Joe Biden’s son and brother being involved in hedge funds.
Hedge fund executive Hunter Biden has had anything but a quiet introduction to his career in finance.
The 38-year-old son of Democratic vice presidential candidate Sen. Joe Biden is caught up in several lawsuits regarding the acquisition and operation of Paradigm Companies, an investment firm that operates a fund of funds – a hedge fund that invests in other hedge funds.
Biden also appears to be feuding with partner James Park, the son-in-law of the Rev. Sun Myoung Moon, Court papers show.
Biden, also a Washington lobbyist, took control of Paradigm in August 2006 and was, for a brief period, its president – getting paid $1.2 million a year despite no experience in the sector, according to charges in one of the suits.
Months later, Anthony Lotito, a consultant, sued Biden, James Biden, his uncle, and Paradigm for allegedly cheating Lotito out of fees related to the purchase. Biden has denied the charges and the suit is awaiting trial.
The old class warfare line about the Republicans being the party of rich fat-cats is once again proving to be a lie. Go after the hedge fund operators if you want, just be prepared to accept the collateral damage to big money players (and donors) on the Democrat side.
Comment by Larry J — September 12, 2008 @ 6:49 am |
“They have no game.”
But Ron, they do have a “game.” And I can tell you exactly what their “game” is:
1) Raise taxes on most people and create new government programs with the money.
2) Abortions for any girl who wants one, no matter what age, without their parents consent, in total privacy, paid for by the government.
3) Judges who will interpret the Constitution as it relates to life in America today, instead of by the plain meaning of its words.
4) Habeaus Corpus for Osama bin Laden. Lawyers for al Queda. 3 hots and a cot for beheaders.
5) No drilling for oil in America. Windfall profits taxes on oil companies.
6) Ban gun ownership through bureaucracy, since they failed in the courts.
7) Politics of personal destruction.
8) No war, even if we’re attacked by Muslims.
9) Eviscerate missile defense
10) Not Barry Obama (Christian name). Barack Hussein Obama (Muslim name).
I could go on and on, but I think you get the point.
Everyone keeps saying that the Democrats are unable to get their message across to the American people because of some poor strategy on their part.
I’m here to tell you that the message got through loud and clear.
America, I would argue, understands exactly what the Democrats game is.
We’ve decided to take our ball and go home.
Comment by jetski — September 12, 2008 @ 6:55 am |
You write, “Or it’s gotten itself obsessed with their opponent’s vice presidential pick in exactly the snotty elitist way that seems to confirm what I believe to be a mistaken impression of Obama.”
See, this is the problem I have arguing with Obama supporters. You deny or explain away every statement that clearly evidences something negative, without having any basis for doing so. Whatever happened to Occam’s Razor? Why isn’t it abundantly clear that the reaction of Obama and his campaign to Palin is, indeed, reflective of their snotty elitism? Not only is there no evidence to the contrary that would support your “mistaken impression” view, there’s abundant evidence that it’s true. (“Cling to their guns and religion” anyone?) Why, when Michelle says it’s the first time she’s been proud of her country, do supporters try to explain that she’s not really hateful and resentful about America because she didn’t really mean it was the first time she’s been proud of her country? Why isn’t it clear that she meant exactly what she said? There’s no evidence to the contrary.
Comment by Mike — September 12, 2008 @ 6:59 am |
Turning the economy into a casino is one thing, but turning it into the first casino in history in which the house always loses is something else again.
Comment by Richard Klein — September 12, 2008 @ 7:35 am |
Charlie Finch wrote:
>>Many financial instruments, such as the S&P 500 “basket of stocks” play and a whole host of derivatives plays must be outlawed.<<<
Huh? Can you explain the basis for this a little more clearly? What is it about the S&P 500 derivatives that bothers you so much?
Comment by dcc — September 12, 2008 @ 7:45 am |
If you buy a hot dog for a dollar, then the hot dog guy buys a candy bar, the deli guy buys a newspaper, the news vendor buys a cup of coffee, the coffee guy buys a lottery ticket, the lottery guy buys a key chain…it’s all the same dollar. The hedgies take that dollar and multiply it to an almost infinited multiple of its debt function. Yet, all you, the average fella, has is that dollar in your pocket (plus a mortgage and other debts, which the hedgies turn into assets). Obama/McCain better figure a way to turn that dollar into a dollar again throughout the US economy and also explain what they are doing to us.
Comment by charlie finch — September 12, 2008 @ 10:03 am |
Newsflash, Rosenbaum: Obama IS EXACTLY what he seems to be. It is you who has the mistaken impression of him, if you think the impression he is currently making is mistaken. He’s an empty suit who wants to call himself President and have all the perks of the job, but does not have a clue how to be a truly effective leader outside of his own little echo chamber. He’s as fit to be Commander-in-Chief as I am…which is to say, he ain’t.
Comment by Amy — September 12, 2008 @ 10:29 am |
It is now well understood that FDR’s populist (arguably Fascist) focus on “the malefactors of great wealth” was one of the main factors that extended a market downturn into the Great Depression. You cannot expect the markets to grow the economy when you keep the markets in turmoil.
Comment by Wayne — September 12, 2008 @ 10:38 am |
I concur with your idea. The deregulation-corruption-bailout cycle is a huge strain on our economy. Obama should be talking this up, along with some well-placed solutions. Republicans have trouble talking about this because of their hard-line black and white stance against all regulation. Democrats, by very definition, should be railing against too much deregulation.
Comment by Matt — September 12, 2008 @ 2:10 pm |
Ron,
The Democrats are the party of “Big Finance.” Have been for at least 25 years. When bank/derivative supports are bruited in Congress the names usually mentioned are Barney Frank, Dodd, Biden, Schumer. The Republicans are just naturally inclined to support anything that seems “pro-Business.” To use old-fashioned terms, the Urban Liberal Left/Democratic party is the “party of finance capital,” the Repubs “party of manufacturing capital”. They are also the party of knee-jerk apologists for anything that happens in the markets.
Obama won’t change. Indeed, he the Goldman Sachs, etc. are betting on him big. And there is one more “market” to exploit, derivatives already plotted out. You know about the subject. It will be the “Cap and trade” of carbon credits and offsets. They are predicting a 1/2 $trillion market based on hot air.
Comment by J — September 12, 2008 @ 8:14 pm |
“Ever since the misbegotten selection of the clownish Joe Biden, Obama and the entire Democratic party seem off their game.”
Well put Ron, but actually the Dimocratic party has been off it’s “game” for a long, long time, maybe since it’s very inception; That is, of course, a huge topic for several text books and novels. You’re correct, to a degree, that the capitalists (malefactors of great wealth) are by no means perfect, and when you combine the lust for money with the lust for political power a deadly cocktail is, no argument here, the tragic result. On the other hand, the news is hardly all bad, economically, since FDR’s day, many decades ago. The record isn’t without it’s stains, which you only focus on, and life “ain’t” perfect, but more people, everywhere, are certainly better off, due directly and indirectly to the essential stimulation of “creative capital”, particularly American style, since FDR. In fact, the “left” has a pathetic record, generally, in generating wealth and security for the masses. Community organizing and government programs will never, can never be a credible substitute for free enterprise capitalism. Every once in a while I still like to check in on you to see if you’re talking about anything extremely relevant. Obama? You? Are you kidding? Stick to Shakespeare…
Comment by Barry Poladsky (Perfected Democrat) — September 12, 2008 @ 10:47 pm |
Sen Obama can’t take on Wall Street as suggested. Several of his close advisers on economic matters are former executives and associates of Fannie Mae and Freddie Mac. They have vigorously opposed, before Congress, the regulation of the two chief mortgage lenders, as well as other financial institutions responsible for the sub-prime crisis. They were the ones who helped keep the watchdogs in the kennels. Expect nothing from Obama in the way of change, just talk!
Comment by goedel — September 13, 2008 @ 12:55 am |
Wow . A lot of commenters piling on Rons Party here. I suspect his blind faith in Socialism is creating doubt about his devotion to the principles of capitalism.
Why did Roger dole out a paid parking space on PJM to Ron?
Comment by WR Jonas — September 13, 2008 @ 10:47 am |
the tragedy of Obama (win or lose in November) is that the Democratic Party is – to its core – racist. Obama has all the attributes of the ideal Black Guy: Harvard educated, cool manners, great oratory.. and he is good looking in a Caucasion manner (as a friend noted, his ancestry is EAST African). And he was played the Democratic Racist game really well, working his way up and through the Chicago political machine, never making any waves that are more than skin deep. He has never questioned the verities of Leftist assumptions, and I think has found them irrelevant anyway, to his real passion: Making It to the Top.
The Democrats have seen him as nothing more than a vehicle to prove to themselves that -by jove! – they are not racists, like those republicans!
Have you never heard something so cynical and heartless and RACIST as Biden’s remark that Obama ‘cleans up’ well??? Obama has lived with this hypocrisy every day since he moved to Chicago.
Comment by heather — September 14, 2008 @ 12:16 pm |
No, I don’t think Biden’s “a cleaned-up Obama” was racist. However, he’s not cleaned up–he still smokes, he pretends to be a great author and speaker, but he doesn’t know a reflexive when he hears/sees one. He stutters–very typical of a life long smoker/driker, degenerate. He will not stop smoking, and if he does, there’ll be another degenerative obcessive compulsive habit–there always is, unless the underlying personality changes. This man tolerates, permits, anti-social behavior, hangs w/low rent, poorly educated, poorly motivated, ignorant human beings and he encourages their degenerate thinking.
Comment by nancy — December 12, 2008 @ 4:35 pm |