Martin Kenney
by Martin Kenney
Sat Jan 31st 2009 at 10:39pm UTC

Focus on the Ball Not the Eyes

I was always a defender when I played soccer. The best advice I was ever given as a defender was to focus on the ball not the offensive player’s eyes, upper body, or feet. Your peripheral vision takes those things in. In Washington, D.C. parlance, Deep Throat always had it right – follow the money. Any time you hear a politician, remember to watch the ball and the ball is the money.

Ignore the Middle East, abortion, whatever your hot button issue. These, though vitally important, are peripheral. The overwhelming issue that will structure all of the rest of our decisions for the next decade or even half century, is the reorganization of the economy. It is in dire shape. The pie is imploding and powerful interests are motivated to protect their slice and the current arrangements. To do this in this environment, they must have access to the monies and regulatory powers of the state. Remember, when in a high stakes situation where everyone is rushing you to make the most serious decisions of your life (our lives) and you (we) cannot figure out who is going to be the victim, it is probably going to be you (us).

So don’t focus on Obama’s statements condemning Wall Street bonuses, telling you he cares about you, etc. These are part of the drama. Focus on real behavior. For example, his appointment of Geithner (was he giggling while being “grilled” by the Senators?), Summers, and the sub-secretaries – all deeply implicated in the current catastrophe – or the rush to get the second tranche of the earlier bailout (which has not had a positive effect and for which most of the money is unaccounted for or has been paid out in bonuses to those most directly responsible for the current situation). Neither of these and his other economy-related actions have been to benefit you.

But there is an even more significant “tell.” Do you wonder why Obama is letting the Republicans and Democrats do whatever they want with the stimulus package? The answer to me is quite obvious – he doesn’t care about it and what it does. Look through it – it is chump change for everyone. $1,000 tax break per couple, some money for states and cities, money for the road builders, some for solar energy, some for university students, but all of it chump change. The simple reason is that he doesn’t care about the stimulus because it doesn’t matter.

The big prize is what his funders in the financial sector want and that is the bad bank where they can pour the multi-trillions of dollars of bad loans onto the taxpayer without losing their jobs, their stockholders being wiped out, and some of them having to do the perp walk. It is the next banking bailout where the massive transfer from the taxpayers to the wealthy is going to occur. Watch the ball. Don’t listen to the words, believe the “shocked” indignation, or accept that Obama and the Congressional Democrats do not know what is going on.

Why is it important for us to be skeptical? We are going to have to rebuild this place, and there are only so many resources. If they are squandered today, they will not be available tomorrow. Rich has written in indignation about the spending on highways instead of mass transit and remarked upon how we have to put our cities together in new ways for a new set of people. This will not be possible if we are rushed into fundamental decisions about who will benefit in this crisis.

If you watch the ball, you are much less likely to be faked out.

13 Responses to “Focus on the Ball Not the Eyes”

  1. Michael Wells Says:

    Martin,

    I share some of your doubts about the structure of the stimulus. But I’m not sure why you’re so quick to impugn Obama’s motives or those of the D’s in Congress. They’ve inherited a multi-front disaster from Bush, the Republican Congress and the financial industry among others. They’re making political deals, that’s what politics is about. They’re trying to make their way through a minefield in the dark. I don’t see any evidence to make me believe they don’t care about the results.

    Geithner’s taxes are small potatoes if he can do the job. As Lincoln said when told Grant, his only winning general, was a drunk “Get me his brand, I want to give it to my other generals.”

    The misuse of the earlier bailout was before Obama was President.

  2. Nashvilian Says:

    “The big prize is what his funders in the financial sector want and that is the bad bank where they can pour the multi-trillions of dollars of bad loans onto the taxpayer without losing their jobs, their stockholders being wiped out, and some of them having to do the perp walk.”

    The big prize, politically, is the blueing of the political landscape as noted in the next entry. How else explain the increase in entitlement spending that will be nearly impossible to roll back if and when government stimulus is no longer necessary? Smells like permanent political stimulus to me.

    And no, Geithner’s (and now Daschell’s) taxes are NOT small potatoes. He stole tens of thousands of dollars from Americans by willfilly avoiding taxes. And before anyone gets on the “so-and-so got away with the same thing” bandwagon, I suggest we all come to the immediate understanding that it’s the trust in our financial system that has been so badly broken. It’s restoring trust that’s going to turn the financial sector around. Now is THE time for people with good character to be in charge. We’ve had plenty of intelligent, well educated and self-serving crooks give a hand in getting us to the precipice. We deserve better.

  3. Brian Says:

    Michael,

    Geitner is from Goldman Sachs. Rahm Emanuel was an investment banker before being a congressman, and as a congressman was among the highest recipients of donations from the financial industry. In 2006, he was responsible for channeling corporate and financial donations to his chosen candidates, who are now in Congress. Obama’s campaign funding mostly came from the financial community and from lawyers (which means lobbyists, which means corporate lobbyists). And, as Martin points out, there is Summers, whose record should be familiar. That’s alot of data. Martin is right, words are cheap.

  4. Martin Says:

    Michael,

    I think Brian and Nashvillian have it right. Michael, keep your eye on the ball…the question about Geithner has always been whose job he will be doing there. And I am answering that for you.

    Martin

  5. Jim H Says:

    Funny how the company keep speaks so much about who you are. A lot of my liberal friends tried to brush off Rev. Wright, Ayers, and his marxist mentor. Not even two weeks into his administration we’re seeing an unfit cast of characters front and center – Geithner and Daschle.
    The blueing of America? Yeah, this will be short lived.

    Great column Martin, this is the first time I couldn’t find something from you to disagree with. This “stimulus” bill is anything but, and everyone can see that.

  6. Michael Wells Says:

    Maybe I shouldn’t have mentioned Geithner, he’s a distraction. Again, I’m not arguing if the stimulus is a good idea or will work. I certainly haven’t a clue. I’m saying that when we jump from policy to personalities, from facts to assigning motivation, we do a disservice to both ourselves and our argument.

    I like this quote from ethicist Michael Josephson “We tend to judge ourselves by our best intentions and judge others by their worst actions.” Or as another famous ethicist said “Let he among you who is without sin cast the first stone.”

  7. Martin Says:

    Michael,

    Geithner is not the distraction, he is the “tell.” You will find this out very clearly when Daschle pulls out for the irrelevant Health Secretary position.

    They got Geithner through and will abandon Daschle to show how “moral” they are.

    Follow the money

  8. Wil Says:

    I like Obama, but the stimulus package is a disaster for the general population. It’s true that the thousand dollar tax credits are meaningless, and that the trillion plus dollars will go to either banks or pork barrel projects. The problem with government is that is run by politicians. It’s a pity that there can’t be more diversity in the types of people in office, there are so many smart inventors, academics, engineers, that could do a much better job than these same people who caused the problems in the first place…. Regarding Daschle, Geithner, and others, what they have done, and how they conduct their affairs is important. Now we can see how much trouble we are in.

  9. Buzzcut Says:

    Martin, I know you’re a leftist. And I’m slightly to the right of Attila the Hun.

    Yet… why do I agree with everything of yours I’ve read here?

    Have you read Arnold Kling’s analysis of the financial crisis, bailout, and stimulus? Deeply libertarian, his recomendation is to let the insolvent banks fail, and let the FDIC clean them up. In another words, let the banking system built in the ’30s do its job.

    He’d also outlaw a great deal of the recent “financial innovation”, like securitization, credit default swaps, etc. His writing on credit default swaps is outstanding.

    When you’ve got leftists and libertarians agreeing on something… that’s a sure sign of the Apocalypse.

    I agree, Geithner’s taxes should have knocked him out of the running for TS. Daschle should be put to pasture as well. I’m no fan of taxes, but blowing them off and not paying them is unacceptable from anyone.

  10. Wendy Says:

    Intriguing, thought provoking essay. Can I ask for a point of clarification?

    At the end you express concern that $800 Billion or more in “stimulus” is taxpayer money being “squandered” when it really might be needed elsewhere.

    Yet, earlier you insist that the stimulus is not Obama’s focus – instead he wants to fix the banking system.

    Are you suggesting that Obama & team really need to be managing both issues? Or are you arguing that if his team can fix the banking / financial system, then keeping congress distracted playing in their sandbox with $800 billlion is worth it.

    Thanks

  11. Nikolai Kondratieff Says:

    Martin,

    Your analysis is once again spot on. The road to hell is paved with good intentions. I think Obama genuinely believes he can clean up Washington and get a stimulus package that can help revive the flat-lined economy. The problem is, he can’t. When there’s one rotten apple in the barrel you throw out the apple. But in this case it’s the whole barrel. Geithner and Daschle are just two high profile examples. Greed, moral turpitude, avarice, and the self-righteousness and mendacity of the leadership on Wall Street and in D.C. is beyond repair, beyond comprehension by hard-working, law-abiding citizens, and truly beyond the pale of acceptability. Yes, it’s astounding that Geithner is now TS. Not only did he defraud the agency he’s now sworn to uphold, but he has also been the FOMC’s lapdog for years and has aided and abetted the Wall Street’s implosion. But on the other hand these vignettes just reinforce the belief among those of us who have our eyes open, that the U.S. hasn’t even begun to feel the pain yet. The sooner we get through the “really bad stuff” the sooner this country can get back on it’s feet and truly provide unfettered access to the stuff that American dreams are made of.

    NK

  12. Jeff Says:

    I guess my question is… How does this effect me? I can’t afford the car payment I have so how am I going to benefit from a tax cut for buying a new car? I’m not married so I’m left out of that tax cut. Why can they not just divide the money equally amongst all the taxpayers so we could pay off our debt in turn giving the money to the banks and freeing up our earned money to spend elsewhere? seems like a win-win situation…. Or am I completely off?

  13. Josephson Institute Says:

    Thanks for sharing Michael’s quote!

    We started posting audio of his commentaries on a new youtube channel – http://www.youtube.com/josephsoninstitute. If you end up posting any of the videos, share the link with us via twitter at http://www.twitter.com/josephson0.

    Thanks!

    Dan