Monday, March 23, 2009

Robert Reich Points Out Potemkin Village On Top Of Capitol Hill

It is amazing to watch how quickly Congress can get together to act on a particular issue. For the most part, specifically on legislation that counts, the process gets bogged down nearly every single time. Yet when there is something out there that where Congress can get on a soapbox and passes a law that is extremely popular yet does nothing to get at the crux of the problem. Robert Reich knows the system well, and is not hesitant at all to expose what is going on here.

From The L.A. Progressive:

When the public isn’t looking, Congress reverts to its old ways. The Obama-supported plan to allow distressed homeowners to renegotiate their mortgages under the protection of bankruptcy has run into a Wall Street wall. Although Citigroup temporarily broke ranks a few months ago when it was receiving one of the most generous bailouts, the rest of Wall Street has remained adamantly opposed, and apparently Democratic leaders have decided not to push back.

Meanwhile, Obama’s plan to limit itemized deductions for the richest 1.2% of taxpayers (including the top 1.9 percent of small business owners) to 28%, starting in 2011, is also in trouble on the Hill. Wealthy contributors and friends of congressional leaders involved in setting tax policy have balked. So Congress is telling the White House to look elsewhere for the $320 billion it needs over 10 years to finance half of the tab for health care reform. Congressional leaders have also informed the White House that they don’t have the votes to pass Obama’s proposal for treating the earnings of hedge-fund and private-equity managers as income rather than capital gains.

Angry populism thrives on stories about the rich and privileged who use their influence to get cushy deals for themselves at the expense of the rest of us. AIG’s bonuses provide a perfect example. It’s too bad the same populist outrage doesn’t extend to issues involving far more money, affecting many more people, and entailing far more insidious abuses of power. Congress’s potemkin populism over AIG’s bonuses disguises business as usual when it comes to the really big stuff.

The "really big stuff" is exactly what counts and what Congress is desperate to avoid. This can also be said about who we prosecute for grand economic crimes. A diarist at OpenLeft discusses why Bernie Madoff gets life in prison while the other titans of finance are allowed to be free and keep their dubiously acquired money. Too often, we allow our leaders to pick (guilty) scapegoats while the majority of those responsible for the mess we are let off scot free.