It should be added that none of this gangsterism receives mention in Winship’s article. Instead he decides to criticize the “Cassandras” who expose these crimes, writing that they “may do more to harm the truly disadvantaged than to help them.” So it isn’t the banks or their millionaire clients in Congress that are responsible for the sluggish recovery, rather it’s those who, for some inexplicable reason, express indignation at the fact that “the five largest mortgage servicers by activity volume account for 60% of the industry’s total servicing volume” or the fact that in 2008 27% of US children lived in families where no parent had full-time year round employment. Apart from giving us a picture of America’s servile intellectual culture, these facts provide a graphic illustration of the corrupt criminal justice system and its grossly unequal application of the law. An unemployed worker robs a liquor store and he is thrown behind bars but when a gang of corporate executives robs an entire nation they are made to pay meaningless fines or accept toothless recommendations for “reform” or “restructuring.” Prison abolitionists across the country have spearheaded campaigns with the objective of moving the criminal justice system from a paradigm based on punishment to one based on rehabilitation. It should be noted that such a model already exists. The rehabilitation model of criminal justice has existed for decades it just so happens that this model is exclusively for world-class criminals and not small time, run-of-the-mill criminals. By this logic one can make the argument that the US prison system is overpopulated with the nation’s poor not because they are robbing people but because they aren’t robbing enough people.
But of all the notions in this article arguably the most revealing is the idea that “scaring workers (as well as consumers, investors, and entrepreneurs) only delays recovery,” and that “digging out of our current hole will require businesses to create jobs, which will happen only when consumers start feeling comfortable enough to spend money again and when investors start feeling comfortable enough to take risks again.” Indeed, it takes a great deal of effort to sustain such a paradoxical mode of reasoning without sacrificing economic analysis to the category of theological dogma. Investors “feeling comfortable enough to take risks” was one of the chief causes of the economic collapse. This is even affirmed by the Federal Reserve who wrote that the banking industry was marked by “inadequate identification of financial, reputational, and legal risks, and [an] absence of internal communication about those risks among boards of directors and senior management.” If these banks can’t even manage risk internal to their institutions what possibly could give one the idea that they could manage systemic risk that extends to nearly every sector of the economy? Perhaps, questions like these are irrelevant. After all the effects of systemic risk would only affect the general population, many of whom would only be “marginally worse off.”
“Bogeyman Economics”, while vast in its scope, is by no means exhaustive in getting at the core of what’s behind the current economic crisis. It, in accordance with long-held doctrines of class domination, shifts the responsibility for grievous crimes from the actual participants to the most defenseless in our society. Winship ends his article by stating that ” If we are to effectively confront the fiscal and economic challenges of the 21st century, we will need to begin by seeing things as they really are.” On this point he was refreshingly correct. But he forgets to recognize that “seeing things as they really are” includes seeing people as they really are and this includes seeing those 10% of children in “deep poverty”, those millions of unhoused workers in unemployment lines, and even the indignant “Cassandras” objecting to such imbalances of power. A careful study of the available data shows that America is in the grip of a deeply rooted social problem, one that considers the denial of justice to working people and the poor as a negotiable price to secure “investor confidence.” When the people have lost confidence in investors and the investors only have confidence in capital then the only defense against the complete evisceration of democracy is the concerted force of the people who have confidence in each other. We see this around the world from the ongoing rebellions in the Gulf region, to the nascent economic formations in Latin America (CELAC for example), and the current mass mobilizations unfolding in oil-rich Nigeria. I’m sure there’s a circle of multinational investors somewhere objecting to these trends under the pretext that it’s undermining their “confidence.” Isn’t it fascinating how men with such power can have such low self-esteem?