BAILOUTS AND ASSAULTS: IF WHAT YOU’RE DOING ISN’T WORKING, DO SOME MORE OF IT.

Sometimes I wonder if the power of rational thought has totally abandoned our political decision makers. Anybody with an even faintly scientific or experimental frame of mind knows that if something doesn’t “work,” it doesn’t work, and any amount of repetition of the same effort at solution of a problem will only make the problem worse. So it is with a couple of areas of huge public concern today: the attempt to “rescue” the American economy by massive bailout payments to its investment firms; and the attempt of Israel, supported by the U.S. (but almost no one else) in trying to “defend itself” by raining the hell of destruction onto the people of Gaza.

First to the bailouts: the U.S. political leaders of both major parties rushed themselves and one another last September into an “emergency” allocation of mega-billions of funding in the attempt to restore liquidity into the banking system, to deal with the crisis in the housing market and other sectors of the productive economy. Among other recipients of this rescue effort was Bank of America, which has now taken two bites of $15 billion and $10 billion from bailout funding and is now asking for an additional $15 billion of such funding. Between its earlier grants and the current request, it spent much of its bailout funding (as did other firms) in a buy-out merger with another investment firm, Merrill-Lynch. Since Merrill Lynch posted a fourth quarter loss of $15.3 billion as it was being acquired by BA, the bank now finds itself with the necessity of asking for new bailout funding to help it “integrate Merrill Lynch after acquiring it” as Treasury Secretary Henry Paulson promised in December that such additional help would be forthcoming if the ML merger were completed. With a new President and Treasury Secretary going into office next week, any bets on whether the Bank of America will obtain this new grant? (A clue: a credit card company, MBNA, owned by BA, is the top contributor over the years to the campaigns of the Vice-President to-be, Joe Biden).

With Citigroup and other investment giants ready to do similar numbers on the U.S. Treasury, logic and experience would certainly suggest that a different approach is needed than more repetitions of the conclusion that U.S. corporations, financial and otherwise, are “too big to fail” and must be rescued and even encouraged to grow even larger (and more protected from failure) lest their failure should result in job losses to the detriment of the whole U.S. economy. The “trickle down” economic philosophy that a rise in production will “raise all boats” in an economy, enshrined in the regime of Reaganomics and carried through the presidencies of both Bushes and Clinton and anticipated into the “third” Clinton term under Obama’s nominal leadership, has not, as Paul Street eloquently shows, worked to do anything except create fabulous wealth for the Few with their yachts and other luxury extravagances along as the Many try to keep their economic heads above water in their leaky rowboats. Even a “liberal” economist like Paul Krugman can’t bring himself to condemn the bailouts for their regressive effects on income distribution, but rather on grounds that the proposed bailouts are simply inadequate in their scale, given the huge size of the American productive economy and the depths of its problems. More of the same, the liberal guy cryeth.

Now to Gaza. Israel’s approach to its “national security” has focused on the necessity of weakening the power of regional entities that threaten that security by diplomacy in a pinch but by a “first resort” to military power, abetted by the ultra-generous military assistance of its “staunch ally,” the United States. No U.S. President since Jimmy Carter has made any credible pretense of impartiality in the conflict between Israel and its neighboring Arab/Muslims states as well as the Muslims within its own occupied territories. The current IDF exercise in Israel’s “self defense” in its attempted annihilation of Gaza has reached the point of world opinion as both condemning the operation on moral and legal grounds, but increasingly on pragmatic grounds that, once again as in Lebanon in 2006, Israel has launched a battle it cannot win and which, far from “defending” Israel from Islamic terrorism, is actually generating conditions that will contribute greatly to its insecurity. Would this not lead any logical and practical person into a conclusion that Israel and its staunch ally should find another approach to this problem: for example, finding ways to recognize the legitimate grievances of Arab peoples, just as they insist that these people recognize THEIR legitimate defense needs? Most Israeli citizens, victims of a propaganda campaign that allows them to live with themselves by assurances that the IDF is exercising humanitarian “restraint” by, for example, allowing 10 minutes for Gazans to leave their homes before they are bombed, allows domestic support in Israel for the assault to remain quite high. And even outside Israel, apologists for the country like Clifford May, the President of the Foundation for Defense of Democracies, argue (in a way resembling the Krugman comments about more stimulus funding being needed) that not more but less restraint in the Gazan operation should be exercised by the IDF. His proof that not enough force is yet being exercised? That Hamas is still raining its rockets on Israeli territory and will only cease to do so when the price they have to pay for their militancy is further raised.

Lest such a view be dismissed as the raving of a militaristic adjunct of the Israel lobby, we must never ignore the tremendous influence of that “lobby” on U.S. politics: both parties whose members of Congress have voted overwhelmingly in favor of a resolution of totally one-sided and unconditional support for Israel in the Gaza operation and, just yesterday, a “memorandum of understanding” was signed between the foreign secretaries of the U.S. and Israel which commits the U.S. to support an enhanced effort to help Israel in suppressing the flow of arms to Hamas from outside Gaza. President-elect Obama, he of the “one President at a time” reticence to express more than the most tepid of concerns about the Gaza situation, comes into office as something of a “clean slate” in terms of Israeli relations, but little in his pattern of appointments or any utterances about the problem suggest that he will not be joining the decades-long exercises in futility which make U.S. policy the hand-maiden of the self-defeating policy of the state of Israel. We can “hope” but let us keep dry our powder for criticism where criticism is warranted.

Jerry D. Rose – Editor, The Sun State Activist