Written by Thom Hartmann
Whenever a politician or commentator bloviates about the brokers at AIG who are getting bonuses, we should all be remembering Lynndie England and Charles Granger. AIG brokers are to the financial meltdown what England was to the Iraq war.
Certainly she did things that were deplorable. But she thought they were legal (England, operating under orders to “soften up terrorists,” even thought she was helping defend our nation). And to the extent that John Yoo’s memos were law, arguably her actions were legal (although the Bushies never wanted it tested, so threw them to the wolves).
But the important point is that the real criminals of the Iraq War were not those like Lynndie England: they were George W. Bush, Dick Cheney, and Donald Rumsfeld (and their neocon buddies).
Like Lynndie England, the brokers at AIG are the small fish. Sure they shouldn’t have been doing what they did, and it’s insane that they were compensated the way they were. And even worse is the fact that those compensation packages were worked out in September and October of last year by the Bush administration, and that that convenient little fact is almost always ignored by politicians and commentators in their faux populist outrage.
But the real criminals of the AIG mess – and the entire financial meltdown that was set up between 1999 and 2006 and crashed starting in 2007 – were Grover Norquist, Phil and Wendy Graham, Tom Delay, and, sadly, Bill Clinton.
The philosophy that it’s possible to bomb people into democracy and torture them into being on our side drove the Bushies. It was wrong, flawed, and frankly insane, and we’re paying a huge price for it.
Similarly, the philosophy that playing the game of business and investment without rules (the technical term is Laissez-faire Capitalism) has driven our government since the election of Ronald Reagan, and went on steroids during the last two years of the Clinton administration and throughout the Bush administration. It’s equally wrong, flawed, and insane, and we’re paying a multi-trillion dollar price for it not unlike we are for the war.
The intellectual forefathers and mothers of the insane conservative economic policies that have brought us to where we are include Ludwig Von Mises, Freidrich Von Hayeck, Milton Friedman, Alan Greenspan, Tom Freidman, Robert Rubin, Larry Summers, and Ayn Rand. Phil and Wendy Gramm pushed through the Gramm/Leach/Bliley Act (which allowed banks to get into the gambling business) and the Commodity Futures Moderinization Act (also known as “the Enron Loophole”), and Bill Clinton merrily signed them into law.
But just as it’s inconvenient to hold the defense contractors and the senior politicians responsible for the Iraq debacle, and instead blame it on Lynndie England, our sound-bite corporate media prefer to focus on a few IAG traders, instead of the people who made what they did both possible and legal.
Instead of passing a 90 percent tax that is limited to the traders, let’s be realistic. Ever since Ronald Reagan rolled back the top marginal income tax rate on millionaires and billionaires from 74 percent to 29 percent, our government has been disastrously in debt, sliding deeper each and every year (the so-called “Clinton surplus” was a mirage created with phony numbers, although it was still a hell of a lot better than what we have now).
David Stockman bragged, back during the Reagan administration, that the goal of Republicans was to rack up such a huge federal debt that Democrats would never be able to push forward the “socialist” programs that Americans want, like stable Social Security and single-payer national health care. He called it “starving the beast.” Grover Norquist suggested it would force government to become so small it could be “drowned in a bathtub,” leaving the corporations in charge. George W. Bush actually, finally, made it happen.
Thus here we are, ten-plus trillion dollars in debt, and trying to blame our problems on Lynndie England and a few traders at AIG.
Let’s call out and name the real criminals, and get about the simple and straightforward solutions of putting our country back together.
Roll back the Reagan tax cuts that have done so much damage over the past 28 years. Pull out of insane trade agreements. Re-regulate banks so they’re functionally public utilities again. Give oversight to the SEC on all forms of speculative investment and bring back the .25 percent STET tax on each unit of investment vehicle traded.
None of this is rocket science. From 1937 until Ronald Reagan began his wrecking-ball efforts at the stability and solidity of our nation’s economy, we didn’t have a single bank panic. Reagan dropped income tax rates and the almost immediate result was a bubble and crash in the stock market followed by the S&L crisis, which has been repeated over and over again with startling regularity ever since (just as they were during the 150 years preceding Roosevelt putting into place the regulatory structures and high marginal income tax rates of the New Deal that stabilized us).
Republican President Dwight D. Eisenhower embraced a 91 percent top marginal tax rate on millionaires and billionaires and strong regulation of banks, including the STET tax, and the nation prospered.
It’s time to return to sanity and quit swatting at the little guys, while the real criminals and thieves walk away with our nation and our wealth.
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About author
Thom Hartmann is a Project Censored Award-winning best-selling author, and host of a nationally syndicated daily progressive talk show carried on the Air America Radio network and Sirius. www.thomhartmann.com His most recent book, just released, is Screwed: The Undeclared War on the Middle Class and What We Can Do About It. Other books include: The Last Hours of Ancient Sunlight, Unequal Protection, We The People, and What Would Jefferson Do?