It is said that America is a place that allows for second chances. Let’s examine a few areas of focus and explore their centrality not only to the ongoing American recovery, but to the character of American life, its capacity for renewal, and the place of the United States among the community of nations.
After decades of stability in the finance sector, the economy suffered from a series of deregulations, first with credit card interest rates in the late 1970s, then with savings and loans in the 1980s, the failure to regulate derivatives in the 1990s, the 1999 repeal of the Depression-era Glass-Steagall Act – which for over 60 years had maintained a firewall between commercial banks and investment banking – to the rise of unregulated payday loan and other short-term nonblank loan and check-cashing firms that prey on the poor and marginalized.
Likewise, President Franklin Roosevelt’s vision for a United Nations, as part of an attempt to champion diplomacy and the rule of law over colonialism and the rule of might, could not prevent the world’s descent into a terrifying Cold War, which saw a World War II ally, the Soviet Union, become a nuclear-armed foe capable of unimaginable destruction. For four decades the world was locked in a Manichean, seemingly apocalyptic struggle between the Soviet Union and the Western powers.
Also soon after World War II, representatives of powerful multinational firms and Wall Street interests epitomized by the Dulles brothers came to dominate our foreign policy and intelligence services, and the US, which had so recently led the fight against fascism, imperialism and authoritarianism, would all too often act as the ‘muscle’ behind a new global corporate colonialism driven by moneyed interests determined to target and undermine non-aligned nations and populist leaders as ‘pro-communist.’
And all too often the U.S. would become involved in political intrigues and moral atrocities including overthrowing legitimate governments, backing authoritarian regimes, and interfering with national elections in Iran, Southeast Asia, Central and South America as part of an effort to advance corporate interests but under the banner of ‘fighting communism and promoting economic freedom.’
Part of this postwar corporate neocolonialism involved co-opting authoritarian oil-rich Middle East regimes to service a fuel-hungry American Empire that lacked the political will to achieve energy independence and sustainability.
President Jimmy Carter’s goal of achieving energy independence from an unstable Middle East – signaled when he ordered solar panels installed on the White House roof – was soon undermined when his successor Ronald Reagan ordered the solar panels be taken down, a move that presaged the events of that decade: a return to large, gas-guzzling American cars, the growing popularity of even more-fuel-thirsty trucks, continued intrigue in Middle East politics, and a popular culture transfixed by the exploits of Wall Street greed-is-good corporate raiders and the scheming oil oligarchs of the TV drama Dallas.
The abuses in the energy sector reached a corrupt climax with Enron, whose securitization of the California energy markets foreshadowed and mirrored what would later occur in the housing and finance sectors.
After the dot-com bubble burst in 2000, many investors worldwide withdrew from the stock market and were directed to investments backed by American real estate. Soon, unsound sub-prime mortgages were packaged into securities, marked triple-AAA by corrupt ratings agencies, and sold to an unsuspecting global market.
Living in South Florida – Ground Zero of the housing bubble – I saw the lending, legal services, and land development sectors working hand-in-glove to feed this market:
Real estate developers and their zoning lawyers pushing for unlimited new development obtained by easy credit;
The easing of growth management regulations to allow unregulated sprawl beyond the capacities of local communities’ transportation, school, and water and utilities infrastructures, and
The campaign financing of “pro-business” candidates for local and state political offices who could be relied upon to allow the housing bubble to grow unchecked despite the urgent wishes of communities seeking to rein in uncontrolled development and its impacts on underfunded and overcrowded school districts, inadequate water management systems, and overburdened roadways.
Growth management laws and lending procedures were relaxed, and real estate development became a means to move – and sometimes launder – money and securitize financial instruments that would then be offered to an eager global market.
The captured media promoted the myth of endlessly rising property values and ignored warnings of overexposure until it was too late – they were too dependent on advertising revenue from real estate and banking interests to look closely and impartially at what was actually occurring.
Reckless speculative investment by some of the largest players in the financial sector – and by investors with little margin for risk but who were encouraged to buy on margin – led to huge exposure to unregulated markets in exotic financial instruments such as derivatives, mortgage backed securities and reverse swaps.
Another type of investment involved betting on investors and homeowners defaulting on their obligations.
It was truly a house of cards.
And when the overheated housing market began to cool from double-digit annualized growth rates, investor confidence flagged and the developing crisis of confidence led to the Crash of 2008 and its aftermath:
- A global economy in free fall;
- More than 400 American banks failing, part of a crisis that necessitated the $800 billion Troubled Asset Relief Program (TARP) of 2008;
- The collapse of investment banks and other non-bank financial entities;
- Up to 800,000 Americans losing their jobs a month – almost 10 million during the 2007-2009 recession;
- Many thousands of firms going bankrupt;
- A housing bubble bursting and taking trillions of dollars of home equity with it;
- Six million Americans losing their homes to foreclosure;
- The loss of $13 trillion in household wealth;
- The credit, housing, and finance markets seizing up;
- Two iconic automakers facing insolvency;
- The stock market tanking, and
- Millions of retirement and pension accounts devastated, etc.
This mania for short-term private gains has eroded our ability to maintain long-term value of the public commons, and a symptom of this unwillingness to maintain long-term value of our public assets is Republican opposition to healthcare and finance reform, fiscal stimulus, renewable energy, and President Obama’s American Jobs Act, which would have created millions of jobs repairing and upgrading our nation’s infrastructure – once the envy of the world but, after decades of disinvestment, now reduced in some cities to unpaved dirt roads and tainted water supplies.
Another symptom is the eagerness of state officials in Michigan and elsewhere to exploit a manufactured economic crisis by privatizing, at fire-sale prices, vital infrastructure projects such as water systems – which represent a massive public investment and commitment to the general welfare, and, notably, massive revenue streams – to politically well-connected special interests.
This is part of a larger problem: the financialization of the economy, which enriches only a very few at the very top at the expense of the many.
There was a similar financialization in the healthcare sector, which began with the Health Maintenance Organization Act of 1973 that fueled the rise of HMOs and led the trend away from non-profit insurance carriers.
Whereas healthcare providers who saw patients as revenue centers were once in the driver’s seat in terms of healthcare decision-making, newly-empowered third-party payers such as HMOs instead increasingly saw subscribers of their services as cost centers, and did everything short of medical malpractice to limit costs by denying them timely and appropriate health care.
On the provider front, huge investor-owned firms began to consolidate and acquire hospitals across the country – and immediately began to shut down almost as many – to achieve “corporate efficiency” which reversed the gains in community healthcare access achieved in previous decades.
Another trend that began in the 1970s was granting private pharmaceutical firms exclusive rights to commercial patents for medications that were developed with taxpayer funding: public investment, private profits.
The Affordable Care Act, despite being a negotiated compromise, in just several years has already expanded healthcare access, provided healthcare coverage to more than 24 million Americans, reduced the uninsured rate to just nine percent, slowed medical inflation, and significantly extended the actuarial life of Medicare.
On the energy front, President Obama’s efforts to reverse the most reckless and short-sighted energy policies of the past are also bearing fruit. Domestic oil and natural gas production reached record levels during his term, American automakers had agreed to voluntarily double the fuel mileage of cars and trucks in the next decade, and solar and wind energy is booming.
And the Cash for Clunkers Act removed older, gas-guzzling automobiles from the road while spurring demand for newer energy-efficient autos and helping to revitalize the flagging American auto industry.
The Department of Defense, the nation’s largest energy consumer, had become the largest renewable-energy laboratory and demonstration project, conducting large-scale experiments with the potential for widespread commercial application and greater energy independence.
President Obama also marshaled tremendous resources through the American Recovery and Reinvestment Act – the stimulus program. As part of this massive effort, we committed $90 billion into clean energy – an unprecedented amount of funding into wind, solar, and other renewables – energy efficiency in every form; advanced biofuels; and electric vehicles, of which there are now more than one million on America’s roadways.
The stimulus produced the world’s largest wind farm, a half dozen of the world’s largest solar arrays, and America’s first refineries for advanced biofuels. It created a battery-manufacturing industry for electric vehicles almost entirely from scratch.
It financed net-zero border stations and visitors’ centers, an environmentally-friendly new Coast Guard headquarters, and jump-started three long-awaited mega-projects in Manhattan alone – the Moynihan Station, the Second Avenue Subway, and the Long Island Railroad connection to the East Side.
And it would have jump-started a multibillion-dollar rail tunnel to New Jersey and a high-speed rail system in Florida to similarly reduce reliance on polluting autos as well if Republican Governors Chris Christie and Rick Scott hadn’t killed those projects.
President Obama also promoted the use of diplomacy to solve problems and bring people of various nations together.
When he convened the US-Africa Leaders Summit — and brought along 500 business men and women to forge greater economic ties with one of the world’s fastest growing regions — President Obama reached out to these nations as equals.
Predictably, many Republicans mocked the trip as another one of Obama’s endless, taxpayer funded vacations, but that effort culminated in the renewal of the African Growth and Opportunity Act, which allowed sub-Saharan countries to sell their goods in the United States duty-free and forge stronger ties with American interests.
An historic agreement to limit Iran’s nuclear program in exchange for lifting economic sanctions provided the potential to prevent a nuclear arms buildup in an already unstable Middle East and ease regional tensions, and also possibly free up Iranian oil and gas for the European market, with the potential to undercut Russia’s ability to use its own oil and gas supplies as a geopolitical weapon to counter economic sanctions imposed by America and an energy-dependent Europe in response to Russia’s incursions into Ukraine and its illegal annexation of the Crimea.
Through years of negotiations and diplomacy, Obama managed to enlist the world’s great powers in the effort, overcame criticism that he would fail to engage the hostile and untrustworthy Iranians, and countered accusations that he was ensuring an Iranian doomsday bomb and exacerbating an existential threat to our ally Israel.
And finally, an agreement to limit Iran’s nuclear program to peaceful purposes — unprecedented in the scope and aggressive intrusiveness of its inspections and enforcement regime – had been passed unanimously by the United Nations Security Council and upheld by Congress.
Easing travel restrictions and normalizing relations with Cuba marked the end of the Cold War in the Western Hemisphere and promised to relieve isolation for Cuban citizens, marginalize hardliners, strengthen the hand of reformers, and undercut attempts by Russia and Venezuela to forge wider hemispheric links.
Under President Obama, we reached an agreement with China, the world’s largest carbon polluter, to reduce its greenhouse gas emissions — a first for China — and provide 20 percent of its energy from renewable sources by 2030; we secured an understanding with India on greenhouse gas emissions; and enlisted 190 countries, including China, to reach a historic agreement, the Paris Accord, to address climate change.
President Obama also assembled a 65-nation coalition of allies — and adversaries — to combat the ISIS terrorist group, and overcame ethnic and regional rivalries in order to stand up a regional fighting force that had the potential to serve as the model for wider regional cooperation, including eventually transitioning into an ongoing regional peacekeeping force and a regional economic development and trade partnership.
President Obama’s attempts to broker a peace treaty between Israel and Palestine, his success in rallying Western Europe to sanction Russia for its invasion of Ukraine, his success in getting Syria to surrender its chemical weapons without a fight, his determination to assemble a coalition to combat the terrorist group ISIS on their home turf, and his ongoing attempts to address Iran’s nuclear ambitions through diplomacy marked a renewed attempt to organize a world community around something besides preemptive war and an attempt to dominate and exploit other peoples:
He strove to reaffirm and uphold the principles that inspired us to save the world from fascism and authoritarianism, and strengthen a community of nations with the capacity to coexist and resolve problems peacefully.
Free trade agreements under negotiation with European and Asia-Pacific powers promised to establish enforceable worker and environmental protections — standards that typically are not championed by the free trade advocates and have not been enforced in past agreements – and blunt the Empire’s efforts to outsource jobs and factories, exploit impoverished citizens in developing countries, pit countries against each other in competition for jobs and investment, and escape the labor costs and worker and environmental regulations of developed Western nations.
And Wall Street reform has had an impact: Systemically large (“too big to fail”) financial entities are facing greater scrutiny, and banks must meet higher reserve ratios, pass stress tests, make out ‘living wills’ in the event of their failure to avoid damage to the broader economy, and limit proprietary trading.
And a consumer financial protection bureau has been established to root out fraud and abuse.
Healthcare, finance, housing and energy: all represent functions vital to a thriving, dynamic society – We the People – and all were hijacked by the Empire of the investor classes in their greed for short-term profits that benefit only a very few at the expense of the many.
And all were given a second chance to return to their original, vital function.
But all that progress is now at risk under an administration that has overturned or undermined consumer protections and regulations designed to protect the public from predatory business practices and the environment from pollution and profiteering, and alienated longtime allies and security and trading partners.
And so now here we are, facing a restive and anxious set of allies around the world who are now as uncertain of our commitments to them as we now are of our own place in the world — and in an international order which we ourselves largely created and have led for over 70 years.
And our adversaries are increasingly becoming emboldened, more adventurous, and eager to exploit those doubts that we have engendered by our lack of clarity and direction.
And in this rapidly changing state of affairs the world is being forced to call into question our previous assumptions and position of moral authority, status, and fitness for leadership.
And because of Trump’s moves to upend and withdraw from existing agreements and alliances, and because of the ambivalence he has displayed toward allies and security and trade partners, the world is now undergoing a realignment that threatens to leave the U.S. increasingly isolated diplomatically, economically, culturally, and militarily.
In just two years under Trump, the U.S. has gone from the recognized, respected, and undisputed Leader of the Free World to something akin to rogue superpower status.
And in the event of a miscalculation or ill-conceived policy that leads to a general economic reversal or collapse, a widespread outbreak of war, or humanitarian crisis, the U.S. could find itself a pariah nation.
I believe in giving our nation a second chance after it has squandered so many opportunities to tap into American innovation, enterprise and genius in an effort to build a just, equitable society with the capacity to solve problems and ensure a rising quality of life for its citizens.
In addition, I believe in giving our national economy a second chance to rebuild upon a strong basis of local prosperity, cultural optimism, personal self-worth and productive achievement while rejecting the illusory pursuit of speculative gains and short-term profits that benefit only a very few at the expense of the many.
And I believe in giving our nation a second chance to once again assume the mantle of global leadership and resume its role in upholding the principles that promoted peace, justice, democracy and prosperity.
We face a choice between two competing visions and sets of values. One calls for us to work within and strengthen a hard-fought community of nations and shared values, and to coexist and resolve problems peacefully without a desire to dominate and exploit other peoples.
The other calls for us to look to other nations with suspicion, to enact policies that provide additional benefits and privileges to the richest and most powerful, that limit redress and representation among the most marginalized and powerless, and that act as the ‘muscle’ behind a new global colonialism driven by moneyed interests and unaccountable dealmakers loyal to no country’s flag and which do not enjoy the consent of its people.
To that end, I believe we must reject the illusory goal of an American Empire and strive to re-power and fulfill the promise of an American Century.
But on behalf of We the People, is there still hope, and time, for a second chance for America?