From TPM Reader DZ …
It is very important I feel to frame the bigger picture here and SG fills in an important part of the puzzle regarding AIG. I agree with him that this a hoax for the Wall St. buddies to get out. Now for the bigger picture- Wall St has become ascendant over the last 8 years not just financially but politically. They are the ones who have the political clout now even though it doesn’t come through in the most direct ways.
This is not some conspiracy theory that “they” have some detailed plot to take everything over but a recognition that the psyche of Wall St. and corporate finance has infiltrated the previous as well as the current administration. Additionally, as the facts show, all the supposed economic growth over the last 10 years was on Wall St. such that they have become the biggest economic force in this country. Collective greed inevitably throws its weight around and we are seeing that now. Geithner is a creature of this financial structure and as such he is completely blinded by what he knows. Obama has been good at getting a lot “experts” but in this case virtually all the experts are beholden to what got us in trouble in the first place. Volcker may be the only exception but he seems to have been effectively marginalized to the detriment of us all.
The biggest oversight in all of this is the mantra that what is good for Wall St. is good for the country. This is highly delusional at this moment in time. Wall St. has and still is extorting trillions of taxpayer dollars and the government is an accomplice in the crime. I am making this point to illustrate just how pervasive and how much political power the collective psyche of Wall St. actually has.
I don’t agree with everything DZ says here. And some of it is more expressive than prescriptive. But I wanted to reprint his email because I think his overall point is critical. Some of our current predicament can only be understood in broader terms of political economy. The financial sector has grown far out of proportion to the function it is supposed to serve in the economy (the efficient allocation of capital) and has, for what it’s worth, demonstrably failed in that core function. This swollen and unhealthy condition has led to vast concentrations of money, which have in turn purchased great political power in Washington. As DZ says, not based so much on specific contributions or transactions or the purchase of people, but the purchase — or at least the long-term leasing — of minds, the basic mentality about whose interests are the key ones in the economy, how the economy is supposed to function and where its leadership should come from.
Josh Marshall is editor and publisher of TalkingPointsMemo.com.