Pottersville Revisited
A few nights ago, as I was watching It’s a Wonderful Life for about the twenty-third time (I’m still not sure if partial viewings count toward the total), I paid special attention to the part where George Bailey finds himself in Pottersville. This nightmarish sequence, lovingly arranged by George’s guardian angel, has burned itself into our collective memory. Today it seems more relevant than ever.
Where exactly was Pottersville? It occupied precisely the same space as George’s hometown, Bedford Falls. It even looked vaguely like Bedford Falls. But instead of a wholesome little burg filled with characters Norman Rockwell might have painted, the town had morphed into a dark and seedy sinkhole of vice, cruelty, fear and alienation. Why? Because George Bailey — the earnest, ever-striving, ever-frustrated hero — had never been born. And his absence allowed the resident plutocrat, Mr. Potter, to spread his tentacles over every last enterprise in town.
Most of us have come to regard this eternal Christmas classic as a study in good versus evil, of community spirit versus capitalistic greed. It’s a tale about the virtuous “little guy” bravely fighting corrupt private interests, in unambiguous black and white.
And yet… it turns out that director Frank Capra was a staunch Republican who routinely voted against FDR. Jimmy Stewart, almost indistinguishable in real life from George Bailey except for his spectacular Hollywood career, was a veteran Republican, too. And let’s not forget that George Bailey himself was an active practitioner of private enterprise. So maybe It’s a Wonderful Life isn’t quite the anti-capitalist screed some of us have come to believe it is.
Here’s what I think Capra is telling us: there are good capitalists and evil capitalists… capitalists who enrich the community and capitalists who enrich themselves at everyone else’s expense. When the latter breed of capitalist is allowed to triumph, the result is Pottersville — in short, economic and spiritual devastation for the “99 percent.”
Moral of the story: The good capitalists — the George Baileys of the world — are indispensable bulwarks against the unrestrained greed and ruthlessness of the big-money interests. In short, the George Baileys have to prevail or we’re toast.
Am I sounding a call to arms for America’s moderates? You bet I am. Capitalism and its rewards have been shifting inexorably away from Main Street toward Wall Street. The Mr. Potters have seen to that. Now it’s time to fight back… to revive Main Street and cage the wild beast that is Wall Street. Moderates have to play a pivotal role in the struggle of the 99 percent against the 1 percent, or we could be in for some epochal ugliness in the years ahead.
As I write this, in the closing month of A.D. 2011, the great American middle class has been ravaged by chronic corporate downsizing and outsourcing. The “job creators” refuse to create jobs even as they sit on overstuffed cushions of cash, and their unapologetic greed is generating rancorous rumblings among the masses. The fortunate few live like Bourbon aristocrats while the rest of us watch our nest eggs crack and ooze ominously. College tuitions have soared so high that only rich kids can emerge from their four-year adventures without decades of debt dangling over their futures. And of course the poor are suffering as much as ever, with this one important difference: they have considerably more company now. That fellow living out of his car down the street used to be a contender.
To make matters worse, Wall Street and its media mouthpieces have hypnotized millions of ordinary folks into believing that unfettered corporatocracy is good for them. (Never underestimate the power of patriotism, religion, freedom and taxation to convince Middle Americans that they should cheer for the elite.)
The Republican front-runners for the 2012 presidential nomination have been a succession of clowns and robots, growing progressively nuttier in their pronouncements before their campaigns implode. But they keep coming at us. The thought that one of them might actually stumble across the finish line should be enough to wake all moderates from their slumber.
Now that Herman Cain’s quirky campaign has self-destructed, the laurel wreath of GOP leadership has descended upon the oversized head of Newton Leroy (yep, you can look it up) Gingrich. Almost a caricature of the arrogant ruling-class apologist, Gingrich has gained notice — not all of it positive — by mocking jobless “Occupy Wall Street” protesters and calling for child labor in poor communities. The ultimate Beltway insider, Newt has made a fortune playing for both sides of the K Street-Congress power axis. Yet he’s imaginative enough to position himself as a maverick in his race for the White House. (Remember, the Tea Party is supposed to be a grass-roots movement of ornery outsiders, and Newt plays the role like a pro.)
As a radical moderate, I believe that a Gingrich presidency would be unhealthful for most living things. The man still faces long odds, of course, and chances are that his wayward tongue will eventually trip him up. He’s compelling as a speaker and pontificator, but he’s not easy to like: cocky, bullheaded and unsympathetic — especially with his legacy of having divorced his first wife while she was bedridden with cancer. He surprised a lot of us when he stood up for illegal immigrants who have led blameless lives in this country… but a cynic would dismiss his high-minded overture as a calculated appeal to moderates, whose votes he’ll have to lasso if he wants to capture the presidency. He’ll have to convince those moderates that he’s not the reincarnation of Mr. Potter.
But I’m convinced he is. And it all boils down to this: the George Baileys among us need to rouse ourselves to action and defeat the Mr. Potters before they defeat us. We need to regulate the excesses of Wall Street, force corporations to put ordinary employees on their boards, and — most important of all — break the sinister and mutually lucrative alliance between lobbyists and our elected representatives. We’ll break it by Constitutional amendment if possible, by civil unrest if necessary. But break it we will, even if it means evicting every incumbent from the halls of Congress. The current arrangement cannot stand if we’re to continue describing our nation as a democratic republic. I don’t know about you, but I have no intention of spending the rest of my life in Pottersville.
Rick Bayan is founder-editor of The New Moderate.
17 Responses to “Pottersville Revisited”
But the Moderates like Romney and Romney could win where Gingrich will never win in the general election. I say Nominate Gingrich for the loss.
It’s a Wonderful Life is, of course, timeless, and you have beautifully conveyed its relevance to today’s America.
My own take is not dissimilar, and even when I was at my most cynical, It’s A Wonderful Life was never corny. On one very lonely Christmas Eve, it helped me through the long night, while with every passing year its message — considered too simplistic by the movie’s few critics then and now — continues to humble and inspire me.
That message reverberates even more strongly in these troubled times: Each of us, no matter how insignificant we may seem, has the power to make a difference. And that the true measure of our humanity has nothing to do with fame or money, but with how we live our life.
Well, I don’t think there is much moderation in either party, but the issues of Pottersville has been on my mind recently.
If you watch the movie, one thing is does is point out the link between home loans and people’s savings. (George points out the bank doesn’t have all money on hand, some of it was lent to people to build homes). Well, there are some who argue in favor of stopping foreclosures and other means of forcing the “evil banks” from taking people’s homes. But this money didn’t fall from heaven, it is people’s savings.
Lending institutions should never be allowed to loan more than they can absorb as a total loss, by enforced law.
In my opinion the U.S. Government should bail out the homeowners not the banks, but in doing so the banks will reap a reward from that bail out…called an absorbable loss to breakeven on original expenditure. Nothing more.
Good point, David.
The good-vs-evil lens is profoundly unhelpful. If banks and lobbyists are fundamentally evil and must be forced to do good, regulators are in an impossible position. They have to oversee banks, so they have to know as much as the bankers about how to run banks well, plus they need to understand this higher social calling, plus they need to be incorruptible in a way the bankers apparently weren’t.
Obviously if we could find people like that, there would be no point in keeping the bankers around. We could simply let the regulators take deposits and write loans themselves, and free them of the additional burden of bending wicked citizens to the yoke of responsibility.
As you point out there are Potters and Baileys. It is ironic and strange how the Baileys, according to polls, seem hell bent on allowing the Potters to define the problems, solutions and who will represent Wall Street’s interests. After reading most any account of the subprime meltdown, it becomes evident many of the players involved felt better (any) regulation might have saved Wall Street from itself. Many of the Baileys, who would have never participated in the original sin of subprime securitization, let alone the follow on multipliers of collateralized debt obligations, credit default swaps, synthetic CDOs and the rest of the sad litteny of other “instruments” were finally pressured to sell that dangerous junk in a kind of Wall Street arms race instigated by the Potters. A little regulation, many Baileys mused, might have kept the honest players honest. Capitalism works best when the price of stupidity and recklessness is the soup line for the participating player or company, not the country. The way to maintain the integrity of our financial system is to even the playing field through regulation. So far, the Potters have insured Wall Street remains effectively unregulated, according to Sunday’s 60 Minutes no one has gone to jail and according to Dylan Ratigan we still have 700 trillion dollars of secret outstanding credit default swaps. In the “Never Never Land” which is today’s Wall Street, credit default swaps are as good as money or capital to deleverage a balance sheet. Finally the Potters have made sure the several giant banks remain, “too big to fail.” What seems to be lost on the Baileys is the fact Potterville is one crisis away from making everyone poor. If Europe takes its legislative cues from the U.S. Congress and the markets decide a resolution to the crisis in Greece, Spain, Portugal and Italy is becoming impossible, 2007 could look like a mild recession.
Until the Baileys speak up with their money (Supreme Court speak for speech) and power, the Potters may not be the only ones falling into the financial abyss, they could take the Baileys and the rest of the world with them.
This is merely a discussion of Social Capitalism. It already exists in various places around the world, and, to lessor degree, here.
Mr. Welch…700 trillion? I mean really.
“Capitalism works best when the price of stupidity and recklessness is the soup line for the participating player or company, not the country.” – DRW
Well that would do the trick allright, but we live in a society where economic class (not to be confused with real class) can make all the difference between serious accountability and a gentle slap on the wrist. And btw, I have no problem with good vs evil comparisons. Neither willful nor clueless dispensing of conscience, nor the casting off of social responsibility qualifies one for the “good” portion of that equation. If the result of sociopathy isn’t “evil”, it’s a damned close approximation.
$700 trillion is almost certainly an overstatement. But the Wikipedia article on the shadow banking system estimates that it was $10 trillion just in the United States before it blew up and I wouldn’t be at all surprised if that was an underestimate. In fact it was/is so hidden that no one, not even the companies involved had that good of an idea of how much was involved. Double that amount seems more than a little likely.
Yes, Virginia, there is $700 trillion floating out there in the stratosphere.
From Market Watch:
‘There’s a $700 trillion elephant in the room and it’s time we found out how much it really weighs on the economy.
Derivative contracts total about three-quarters of a quadrillion dollars in “notional” amounts, according to the Bank for International Settlements. These contracts are tallied in notional values because no one really can say how much they are worth.
But valuing them correctly is exactly what we should be doing because these comprise the viral disease that has infected the financial markets and the economies of the world.
Try as we might to salvage the residential real estate market, it’s at best worth $23 trillion in the U.S. We’re struggling to save the stock market, but that’s valued at less than $15 trillion. And we hope to keep the entire U.S. economy from collapsing, yet gross domestic product stands at $14.2 trillion.
Compare any of these to the derivatives market and you can easily see that we are just closing the windows as a tsunami crashes to shore. The total value of all the stock markets in the world amounts to less than $50 trillion, according to the World Federation of Exchanges.’
….
‘Few know what derivatives are worth. I spoke with one derivatives trader who manages billions of dollars and she said she couldn’t even value her portfolio because “no one knows anymore who is on the other side of the trade.”‘
http://www.marketwatch.com/story/the-700-trillion-elephant-room-theres
They need to do more than speak and more than pitch tents in parks. They need to fight for specific fixes.
And that’s where the rubber hits the road. How do you propose to fix the problems, beyond vague calls for more regulation?
FTR, I checked, Here is the transcript from today’s Dylan Ratigan Show:
> well, we’re back and breaking down the dark, unregulated world of swaps. we started yesterday defining what a credit default swap is, and really, broadly, with bill fleckenstein, what a swap is. think of it like an unregulated insurance product, where you can bet on whether people, businesses, or even nations will default on future loan payments. our goal with these segments is to help prepare you for the release of our book,” greedy bastard$!” next month. today we’re talking about why the unregulated swaps market and its $700 trillion — $700 trillion — it dwarfs every other liability that we have — is so dangerous and so devious. and more importantly, what we can do about it. you might find the answer remarkably simple. let’s bring in henry blodgett, editor and chief of the business insider, and barry ritholtz with phusion iq. henry, i’ll start with you. we’ve watched basically every financial security in the world posted to enexchange, traded publicly, it becomes a more transparent, it becomes a narrower spread, means it’s cheaper and easier to transact in, and we have this one market, which happens to be the largest market on planet earth, that is traded in complete blackness with no capital required if you’re a aaa financial institution. is there any possibility benefit to keeping that market in the blackness?
I don’t know any “Virginias” …..
There is no “700 trillion dollars” in debt that cannot be paid. There is no “collapse imminent”. There are only rich people whom will be paying much higher taxes real soon.
…and I hope they hit Donald Rump real hard.
So Allen,
Ratigan, Marketwatch are liers, misinformed, leftwing mouthpieces,,what?
Dr. J. How about a little start. Break up all financial institutions that are currently too big to fail.
I’ll vote for that, RC. Restoring Glass-Steagal seemed like a no-brainer after the meltdown, but somehow it was beyond Congress’s ability, and the Occupiers couldn’t muster enough focus to push for it.
Hey, maybe if we moan about simplistic lessons from 1940′s movies, that will be almost as good. I have to tell you I’m shocked–shocked!–to discover gambling going on on Wall Street.
1. Reinstate Glass Steagall
2. Make all savings bank local (State, the way it used to be)
3. Make all investment banks partnerships (So that when they go on a gambling spree and lose, the Partners also lose their shirts.)
4. Make all Insurance companies Mutual Companies.
5. Facilitate the existence of credit companies, either owned by municipalities or states so that the poor can have access to basic financial services.
6. Reinstate the basic mortgage rules 20% down, monthly payment under 1/3 of gross income.
7. Make the lender keep at least 20% of the loan.
8. Have communities build low income housing.