From the President’s State of the Union speech:

Seven years ago, Rebekah and Ben Erler of Minneapolis were newlyweds. She waited tables. He worked construction. Their first child, Jack, was on the way.

They were young and in love in America, and it doesn’t get much better than that.

“If only we had known,” Rebekah wrote to me last spring, “what was about to happen to the housing and construction market.”

As the crisis worsened, Ben’s business dried up, so he took what jobs he could find, even if they kept him on the road for long stretches of time. Rebekah took out student loans, enrolled in community college, and retrained for a new career. They sacrificed for each other. And slowly, it paid off. They bought their first home. They had a second son, Henry. Rebekah got a better job, and then a raise. Ben is back in construction — and home for dinner every night.

“It is amazing,” Rebekah wrote, “what you can bounce back from when you have to…we are a strong, tight-knit family who has made it through some very, very hard times.”

We are a strong, tight-knit family who has made it through some very, very hard times.

This touching story of survival in the face of economic adversity was probably the single dominant thread in the President’s speech. The President referred to the Erler’s as a narrative device multiple times in the speech, complete with numerous shots of Rebekah in the audience. It truly is an impressive, though presumably common, story of how Americans worked their way through the economic collapse of 2008, the collapse of housing bubble, and the rise of debt and joblessness that accompanied it all.

Of course, you can also look at this story and see a depiction of how the American government utterly failed this family.

They were the victim of the bets of Wall Street banks, given license to gamble by bipartisan deregulation. Houses were overvalued, loans were inflated beyond what borrowers could pay, and when no one was buying houses, no one was building them. Wall Street banks were let off the hook – allowed to continue to exist despite being insolvent, while insolvent homeowners were told to quietly surrender their homes to these very same bankers. When stimulus spending was passed, it was small and limited, lest the deficit scolds be given optical license to scold the President and his new majorities in Congress.

There was no way for this family to get higher education without debt, so debt they took on. The risk seems to be paying off and the economy is rebounding. Things seem bright for the Erlers and that’s to be celebrated.

But how would the last six plus years of their lives looked differently if the government had actually sought to help people impacted by the economic crisis, instead of waiting for them to gamely dig themselves out of trouble? What if there had been stimulus spending to keep construction jobs from contracting? What if there were free community college (as the President has now proposed to the Republican controlled Congress)? What if there was a minimum wage that was a living wage? Surely all of this would have helped this family, kept them afloat and maybe brought them what they themselves earned painstakingly a bit faster and with a bit less pain.

There are many ways in which government is not like a family. Just as a government doesn’t have to balance the checkbook the way a family does, the characteristics of grit through austerity do not hold from the family to the government. Maybe this family got through it all, but I think we must aim higher than that. Maybe our country is getting through it all – though this is a highly contentious claim in my view – but again, we must aim higher.

In fairness, the President did call for Congress to aim higher, though more in the spirit of cooperation and civic duty than in pursuit of any particular set of outcomes.

I’m left with a description of a family’s trials that, while admirable, is not one that I would hold up as anything other than an example of the ways in which the Democratic and Republican parties have failed poor, working and middle class Americans.

My good family friend Avram Barlowe penned this thoughtful piece which I think merits wider reading. Avram is a teacher in the New York City public school system and a union shop steward.

What Would Carl Oglesby Say About Bob Rubin?
. . . and by extension, Bill Clinton and Barack Obama?

Coming of age under the influence of the New Left, one of the political traits I developed was an enduring mistrust of powerful liberals and liberalism. There have surely been times in my life when that mistrust was misplaced and dogmatic. And decades of neoliberalism’s slow but steady erosion of the welfare state have certainly taught me the value of certain liberal reforms and the need, sometimes, to work within the system. However, I still believe in an aspect of the New Left’s critique, which suggests that liberalism is too often an accommodation masking capitalism’s injustice. I would also argue that social democracy as we have known it, with all of its considerable benefits, in both its European and American forms, is fundamentally a concession that capitalism is rejecting in the context’s of the left’s defeat. It should not be an end in itself. I understand that fatigue in the face of reaction at home, the failure of “really existing socialism” abroad, and a pragmatism born of conditions have narrowed the horizon for many decent, serious activists, but I think these people are engaged in denial to the extent that they accept the good intentions, if not the practices, of the “centrist” liberals who run the Democratic Party.

I’ve been stewing about this in recent weeks as I’ve perused assorted bits of news, which reveal the manner in which liberal Democrats have essentially conceded to the big banks the right of risky, financial speculation and the fiscal austerity/privatization that accompanies it. (If you doubt me on this one consider as examples the latest, paltry fines paid by UBS to settle [out of court] its “LIBOR” violations and by HSBC to resolve [out of court] its laundering of billions of dollars for Columbian and Mexican drug cartels, a clear violation of the Banking Secrets Act and the Trading With The Enemy Act. In each case, according to The New York Times, the government clearly “chose not to indict . . .for fear that criminal prosecution would topple the bank and, in the process, endanger the financial system.) I’m reminded that so many of the current policy’s architects are liberal, east coast Democrats, products of prestigious educations, the best and brightest, just as were their 1960’s counterparts (except that this time several of the wise men — Jack Lew, Gene Sperling, David Plouffe, Larry Summers, Peter Orszag, David Axelrod, Rahm Emanuel — are Jewish, as are their not-so-informal guru, Bob Rubin, and myself). And when one takes a closer look at their profiles, credentials, interests and political actions, the parallels to the 60’s are rather striking.

Yves Smith wrote a smart blog piece this week on Jack Lew, Obama’s Secretary of Treasury nominee, that examines Bob Rubin’s influence in the Obama Administration. (Lew, by the way, worked with Rubin in the Clinton Administration and later was one of a group of former Clintonites recruited by Rubin at Citigroup.) It includes a telling description of Rubin’s liberalism:

“Rubin was admired by everyone for his low-key personal style. Rubin always had a big heart and a gentle manner: He was a liberal Democrat who, as a young trader at Goldman Sachs, used to show up at New York community meetings on the inner-city poor. Later on he opposed Clinton’s welfare “workfare” reform—a much-criticized compromise with the GOP—as too harsh. . . .

In the year 2010, in an interview with me a decade after his star turn as Treasury secretary, as the floodwaters of the subprime disaster lapped at his executive suite in the Citigroup building on Manhattan’s East Side, Rubin mulled over the consequences of what he had wrought. ‘We have a market-based financial system, and yet we have a whole bunch of institutions that are too big or too interconnected to fail,’ Rubin said in puzzled tones. “Yet the market-based system is the way to go. How do you reconcile all that? The fundamental theory of the [market] case is premised on the notion that failure or success reaps their own rewards. But now that’s not happening.”

The quotation cited here is quite an admission. One wonders why someone capable of it and someone apparently concerned with the plight of marketplace “losers” doesn’t renounce the present system and call for or seek an alternative. The answer, of course, is that he and others like him are deeply vested in the system, ideologically, emotionally, and, perhaps most important, materially.

Now consider for a moment one of the New Left’s defining moments, the words spoken by SDS leader Carl Oglesby’s at the first national March on Washington protest against the Vietnam War:

“We are here again to protest a growing war. Since it is a very bad war, we acquire the habit of thinking it must be caused by very bad men. But we only conceal reality, I think, to denounce on such grounds the menacing coalition of industrial and military power, or the brutality of the blitzkrieg we are waging against Vietnam, or the ominous signs around us that heresy may soon no longer be permitted. We must simply observe, and quite plainly say, that this coalition, this blitzkrieg, and this demand for acquiescence are creatures, all of them, of a Government that since 1932 has considered itself to he fundamentally liberal.

The original commitment in Vietnam was made by President Truman, a mainstream liberal. It was seconded by President Eisenhower, a moderate liberal. It was intensified by the late President Kennedy, a flaming liberal. Think of the men who now engineer that war those who study the maps, give the commands, push the buttons, and tally the dead: Bundy, McNamara, Rusk, Lodge, Goldberg, the President himself. They are not moral monsters. They are all honorable men. They are all liberals.”

I know some will argue that it’s wrong to compare the horrors of Vietnam to our current economic problems. But substitute the casino economy and growing inequality for Vietnam and the liberals yesteryear for the liberal leaders of today and you have an analogy that fits. As Yves Smith notes, “we have created a free-market system dominated by institutions so huge and systemically important that they no longer have to play by free-market rules.” Bob Rubin and proteges such as Larry Summers, Tim Geithner, Peter Orszag and Jack Lew — honorable, liberal men all — have done as much as anyone to create that system. And the lives of ordinary people are being damaged and destroyed in order to preserve a power structure, just as they were in the Vietnam War.

To those who would deny this or question the wisdom of placing the system on trial even as we fight to defend and advance reforms, I would ask you to consider as well the closing of Oglesby’s speech in today’s light as well:

“Let me then speak directly to humanist liberals. If my facts are wrong, I will soon be corrected. But if they are right, then you may face a crisis of conscience. Corporatism or humanism: which? For it has come to that. Will you let your dreams be used? Will you be a grudging apologist for the corporate state? Or will you help try to change it – not in the name of this or that blueprint or ism, but in the name of simple human decency and democracy and the vision that wise and brave men saw in the time of our own Revolution?And if your commitment to human values is unconditional, then disabuse yourselves of the notion that statements will bring change, if only the right statements can be written, or that interviews with the mighty will bring change if only the mighty can be reached, or that marches will bring change if only we can make them massive enough, or that policy proposals will bring change if only we can make them responsible enough.

We are dealing now with a colossus that does not want to be changed. It will not change itself. It will not cooperate with those who want to change it. Those allies of ours in the Government – are they really our allies? If they are, then they don’t need advice, they need constituencies; they don’t need study groups, they need a movement. And it they are not, then all the more reason for building that movement with the most relentless conviction.

There are people in this country today who are trying to build that movement, who aim at nothing less than a humanist reformation. And the humanist liberals must understand that it is this movement with which their own best hopes are most in tune. We radicals know the same history that you liberals know, and we can understand your occasional cynicism, exasperation, and even distrust. But we ask you to put these aside and help us risk a leap. Help us find enough time for the enormous work that needs doing here. Help us build. Help us shape the future in the name of plain human hope.”

Carl’s words are hardly a program for working within and beyond the system today, but the approach and spirit they represent remain highly relevant. ‘Nuff said for now.