The Return of the Shadow

A talk given at a Left Forum panel, April 2009.

It’s spring and I’ve been thinking a lot lately about reincarnation.  If I’m a good adjunct can I come back as a tenured professor?  If I stay a loyal Cub fan, can I come back as a Yankee fan?  Actually, it’s political reincarnation that I’ve been considering.  It seems like the collapse of the economy is bringing back the 1930s.  Nobel prize winner Paul Krugman says depression economics is back.  And we’re encouraged to think of our leaders in terms of avatars from that decade.  Who’s FDR?  Who’s Hoover?  FDR talked about a generation that had a rendezvous with destiny.  What’s ours?  I hope it’s not to repeat the mistakes of the Left in what was, in W.H. Auden’s words, “a low dishonest decade.”

The title of my talk is “The Return of the Shadow.”  In fact I want to describe the return of three shadows: the first is Lamont Cranston, who seems to have come back as President Obama; the second is the shadow banking industry, whose pre-Crash role the President is laboring to restore.  And the third is the shadow of the great depression, particularly the return to that decade’s way of thinking about capitalism — as chiefly a problem of finance capitalism.

Obama as FDRRecently I read a Washington Post/ABC Poll.  It showed two thirds of all Americans approving of President Obama’s economic policies.  Among Democrats, the figure rises to 90%.  The number of people who think the country’s headed in the right direction has nearly tripled since Obama took office.1  Many see him as the re-incarnation of FDR — whom historians consistently portray as our greatest 20th-century president.2  Just after his 2008 election, Time Magazine portrayed Obama as FDR, cocking his head at that unmistakably jaunty Rooseveltian angle, clenching the signature cigarette holder in his teeth.3  New York Times columnist Tom Friedman sees Obama’s economic program as a 21st-century New Deal emphasizing Roosevelt’s pragmatic spirit: wedded to neither left nor right, but willing to try whatever works.4

Obama reminds me too of a legendary hero from the 1930s: The Shadow.  For those who missed the ’90s movie re-make, starring Alec Baldwin, The Shadow first aired in 1930 as a popular radio detective show, featuring Orson Welles as Lamont Cranston, a wealthy playboy and man about town who assisted the forces of law and order.  What rendered him so valuable was his uncanny ability to cloud men’s minds so that he appeared invisible.  Only his companion, the lovely Margot Lane, was aware of his secret powers.

True, Obama is anything but invisible: but like Lamont Cranston, he uses his power to cloud men’s minds in the service of the established order — in this case the FIRE industry (finance, insurance, and real estate) and particularly the shadow banking industry.  That’s the complex of investment banks, hedge funds, private equity bankers, and monoline insurers whose leveraged trading, securitization, and innovative derivative products defined the great boom up until September of last year.  Since then, the value of the U.S. securities held by financial institutions has fallen by many trillions;5 and the institutions themselves have suffered a comparable loss of credibility.  A recent Harris poll showed that Wall Street’s approval rate is now lower than any other institution in the U.S.  Only 4% of the American people say they have confidence in Wall Street.6  Obama and Wall Street have become a couple.  But, somehow, Obama has been able to make the bond invisible.

What I would like to argue is that, in terms of policy, personnel, and political ideology, Obama is the anti-Roosevelt.  While Obama has achieved American Idol status despite his embrace of Wall Street, FDR became a charismatic folk hero, in no small part because he defined himself as the scourge of Wall Street: Roosevelt offered himself as the leader in a fight against the “economic royalists” who, he charged, “had concentrated into their own hands an almost complete control over other people’s property, other people’s money, other people’s labor — other people’s lives.”7  He shut down all the banks on the third day of his administration; days later, he took the U.S. off the gold standard shocking Wall Street’s hard money men and their representative at the Fed, whose autonomy he reduced to narrow dimensions.  When Senate leaders tried to scuttle Committee Counsel Ferdinand Pecora’s investigations into the causes of the crash, Roosevelt stopped them.  Pecora’s hearings not only exposed Wall Street’s recklessness and criminality; they demystified and even belittled the financial titans of the era — not excluding the giant of them all J. P. Morgan, Jr. — who raged against the breach of protocol abetted by Pecora who allowed a circus midget to jump into Morgan’s lap.8  FDR responded to Morgan’s concern by making Pecora head of the newly established Securities and Exchange Commission.

The SEC was one of the products of the Glass-Steagall Act.  Glass-Steagall vastly reduced the concentration of U.S. financial power by dividing banking into commercial and investment components, neatly splitting the House of Morgan in twain.  And reducing the investment banks’ sources of capital and the commercial banks’ penchant for risk.

Roosevelt knew clearly who he was taking on: “The real truth of the matter,” wrote FDR in 1933 to Colonel House, “is as you and I know that a financial element in the larger cities has owned the government since the days of Andrew Jackson — and I am not wholly excepting the Administration of Woodrow Wilson.  This country is going through a repetition of the Jackson fight with the Bank of the U.S. — only in a far bigger and broader scale.”9

In a word, FDR’s goal was to save capitalism from finance capitalism; Obama’s, I would suggest, is to save capitalism by saving finance capitalism.

Consider the difference in the make up of the two Administration teams.  In FDR’s White House brain trust, nary a Wall Streeter.  The three most often mentioned were all Columbia University profs.  A. A. Berle pioneered the notion of a corporation in which there had arisen a separation of ownership and control so the representatives of other people’s money had no real legitimacy.10  Rexford Tugwell was a quasi-Marxist agricultural specialist who visited Soviet Russia in 1927 and returned with a collectivist vision which he tried to realize in kolkhoz-like communities as head of FDR’s Resettlement Agency.11  And finally, Raymond Moley, who actually taught at Barnard, across Broadway.  He was a conservative criminal justice specialist who is said to have coined the term New Deal and bragged that Roosevelt’s bank take-over had “saved capitalism in eight days.”12

Jesse Jones was part of FDR’s brawn trust.  A tough Texan who headed the Reconstruction Finance Corporation, he’d gotten his start as lumberman, moving into real estate and then banking.  But he wasn’t a Wall Streeter.  It was his job to persuade banks to accept partial nationalization.  At a meeting of the ABA he offered no stress tests: “Half the banks in this room are insolvent; and those of you representing these banks know it better than anyone else.”13  Many of Obama’s backers would like to hear such straight talk from his Secretary of the Treasury.

But it’s a stretch to interpret Roosevelt’s battle against Wall Street as either anti-capitalist or as particularly innovative. Think of Roosevelt as a gardener.  He sprays to kill the weeds, not to destroy the lawn.  Rexford Tugwell acknowledged that the New Deal consisted almost entirely of programs initiated by Herbert Hoover: the Reconstruction Finance Corporation; fiscal pump priming; steep taxes on the rich; huge infrastructural projects to increase employment.14  The biggest exception of course was FDR’s campaign against financialization.  It’s a judgment that raises an important question.  Ignoring foreign policy and big areas of domestic policy, just concentrating on economic stabilization, and recognizing we’re only 100 days into the Obama presidency — to whom does Obama stand closer: Hoover or FDR?  On the evidence so far, I would say Hoover.  Except that Obama’s political skills are closer to FDR’s than Hoover’s.  And, unlike Hoover, Obama would never dream of advocating a 62% marginal tax rate on top income earners.

Another area where Obama stands closer to Hoover than FDR is his approach to the nature of politics.  In political ideology, Obama and Hoover are pluralists who articulate a politics of the common good.  FDR adopts a conflict perspective.  In his first inaugural address, FDR pointed directly to those who were responsible for the great crash: “the rulers of the exchange of mankind’s goods have failed,” he said, “through their own stubbornness and their own incompetence, have admitted their failure, and abdicated.  Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men.”  “Money changers” is not a term of endearment in Christian populist discourse.  It is redolent of William Jennings Bryan’s electrifying demand that Wall Street not crucify mankind.  And at the same time, it looked forward to Roosevelt’s 1936 acceptance speech, when he called for the overthrow of the financial oligarchy.15

FDR operates in a Schmittian political world of friends and enemies.16  By contrast, Obama targets no enemies; he lives in a Madisonian world where we must all participate in the non-partisan pursuit of the common good.  Sometimes factions impede our way.  But Obama took care in his Inaugural Address not to single out financial interests.  “Our economy,” he observed,” is badly weakened, a consequence of greed and irresponsibility on the part of some but also our collective failure to make hard choices and prepare the nation for a new age.”17

The President repeated the idea that everyone’s responsible for the collapse of capitalism in his recent New Foundations address.  “This recession was not caused by a normal downturn in the business cycle.  It was caused by a perfect storm of irresponsibility and poor decision-making that stretched from Wall Street to Washington to Main Street.”18

One of this president’s ideological bedrocks is the communitarian idea of responsibility.  Communitarians believe our society puts too much emphasis on rights and not enough on responsibility.  Perhaps.  But if power is to be held accountable, responsibility must be proportionate to the amount of power actually held.  And if investments have turned out badly, the responsibility belongs to the investing class and not the working class.  Workers produced cars, not structured investment vehicles.

Obama’s posture towards the investing class is far more protective than adversarial.  Consider his now famous words to the Wall Street chiefs led by Morgan’s Jaime Dimon, at a White House meeting in late March: “Gentlemen: don’t you realize that my administration is all that stands between you and the pitchforks.”19

Perhaps sensitive, though, to critics like former IMF chief economist Simon Johnson, who charges the administration is in thrall to a financial cabal,20 Obama’s advisers tried to portray the meeting in adversarial terms.  But when Dimon looked across the table at the five aides Obama brought with him, he didn’t see adversaries; he saw colleagues and clients: while Tim Geithner, the Treasury Secretary, never worked on Wall Street, he was chosen by directors of the New York Federal Reserve Bank — most notably by Dimon, himself — to be the New York Fed president.  And recall one of Geithner’s most controversial actions: his refusal of the open credit window for Bear Stearns, which he pushed into arms of Morgan.  Dimon got Bear originally for $2 a share.  And the Fed agreed to guarantee $29 billion of $30 billion in dodgy Bear assets.21  It would be hard for Dimon to construe Geithner as an adversary: he was alternately his beneficiary and his benefactor.

The president’s top White House aide at the meeting was Larry Summers, head of the National Economic Council.  In his Wall Street stint after leaving Harvard, Summers earned $5.2 million working for the hedge fund D. E. Shaw between 2006 and 2008 — albeit working only 1 day a week.  He supplemented his part-time job with $2.7 million in speaking fees from Wall Street companies that received government bailout money.  Just one speech to Goldman Sachs netted Summers $135,000.22

The president also brought along his chief of staff, Rahm Emanuel, who has an unusual background in both ballet and Chicago politics.  But it was the latter vocation that enabled him to jetée into the investment boutique of Wasserstein Perella.  In his two years he made $18 million.23

A fourth aide accompanying the president was another Chicagoan, Valerie Jarrett.  She’s often said to be one of Barack Obama’s closest advisors.  As CEO of Habitat, Jarrett emerged as a prominent figure in the urban renewal, gentrification, and rehabbing of the South Side that saw the demolition of tens of thousands of public housing units.24  In recognition of her achievements, Jarrett was appointed the first African American chair of the Chicago Stock Exchange.

The fifth Obama aide in the room, Council of Economic Advisors chair Christina Romer, had no Wall Street ties.  But then only professional economists meet the qualifications for the job.  Unlike the Fed chair, no Wall Street figure has ever been appointed to chair the CEA.

There’s an array of other Wall Street people whom Obama has placed in top White House and regulatory positions.  There’s Mary Schapiro, formerly the top New York Stock Exchange regulator now in the top job  at the SEC.  Mark Patterson, who worked as a lobbyist for Goldman Sachs; he serves now as the second ranking official on the NEC.  Gary Gensler is a former Goldman trader and Clinton Department Treasury aide, who’s been nominated to run the Commodity Futures trading Commission.  His nomination has been blocked, however, by Senator Bernie Sanders.  The Vermont socialist charged Gensler “worked with Senator Phil Gramm and Alan Greenspan to exempt credit default swaps from regulation, which led to the collapse of A.I.G. and has resulted in the largest taxpayer bailout in U.S. history.  He supported Gramm-Leach-Bliley, which allowed banks like Citigroup to become ‘too big to fail.'”25

No account of the financialization of the Obama Administration would be complete, though, without mentioning the Hamilton Project: a think tank jewel within a think tank jewel box.  Nested inside the Brookings Institution, the oldest and biggest Democratic Party-oriented policy research center, Hamilton has been widely identified as the intellectual power center of the Obama administration.26  But the extent and nature of the influence is worth noting.  Initially, the reaction has been one of surprise at the seeming implausibility of naming a Democratic think tank after the ideological founder of the Republican Party.  But it’s not so implausible if you recall that Hamilton was a principal in the deal with Jefferson, whereby, in exchange for agreeing to shift the seat of government from Philadelphia to D.C. to benefit real estate speculators, the Federal government rewarded speculators in state securities who had bought them at 15 or 20 percent and them redeemed at par.27

It was a deal that could serve as a precedent for Obama’s legacy assets plan, wherein private speculators will be able to purchase the legacy — formerly known as “troubled” and before that as “toxic” assets — with government loans that are 94% forgivable.  Some of the avowed participants in the plan sit as advisors of the Hamilton Project.  They also overlap with the informal brain trust made up of prominent hedge fund operators who counsel Larry Summers, a Hamilton Project advisor.28

The founder of the Hamilton Project was Robert Rubin, Summers’ former boss at Treasury where he was judged as “the greatest secretary of the Treasury since Hamilton” by Bill Clinton and as “bail-out Bob the Bubble Blower” by financial writer Kevin Phillips.29  Back in 2006, Rubin organized a couple of dozen leaders of the shadow banking industry.  Each threw in a little over $100,000 — basically parking space money.  His recruits included Howard Berkowitz of BlackRock, which now handles the disposal of bad Bear Stearns assets; Quadrangle’s Steve Rattner, who’s now under investigation for bribery; and Roger Altman of Evergreen Partners, who served as Undersecretary of the Treasury under Clinton.  It was Altman who brought  Senator Barack Obama into the project.  At Hamilton’s inaugural event, in the Spring of 2006, Obama was the featured speaker.  His remarks were brief, but not merely ceremonial or superficial.  He showed recognition of Rubinesque parameters about entitlements and deficits.  And perhaps most important, he presented himself to the assembled hedge fund hotshots as a man of the Left who recognized the futility of the Left’s adherence to New Deal programs which he admitted had long ago lost their justification — “as they were written.”30

Since Obama began campaigning in 2007, the Hamilton Project has had a dizzying turnover of top staff joining the Administration.  The first director of the Hamilton Project was Peter Orszag — he’s now head of the OMB.  He was replaced by Jason Furman, who was then pressed into service as the Obama campaign’s chief economic spokesperson. Furman is now the No. 2 official on the National Economic council.  Jason Bordoff, Hamilton’s policy Director, served as an Obama campaign surrogate.  Doug Elmendorf, who replaced Furman, now serves as head of the Congressional Budget Office — which could impact the CBO’s watchdog role.

So much for Obama’s personnel and his political ideology — what about the policies?  The priorities of the financial stabilization program seem to run as follows: revive the shadow banking system and its practices.  Get securitization moving again; stave off any Glass-Steagall type inquiries; keep hostile hands off the insolvent commercial banking sector, which got that way because they imitated the practices of the investment banks and hedge funds.  Notwithstanding stress tests and admonishments to bank credit card companies, the slogan seems to be “Let zombies be zombies.”

The centerpiece of the Obama bank rescue strategy is the “Private-Public Investment Program” (PPIP).  Bloomberg has estimated the cost at $1trillion.31  Provenance according to Newsweek‘s Michael Hirsh is that it arose out of conversations that Warren Buffet, the Sage of Omaha and largest stockholder in Wells Fargo, had about toxic assets with Bill Gross of PIMCO, the giant bond fund, and Lloyd Blankfein, the CEO of Goldman Sachs.32  The consensus of critics is that the plan can’t work without massive over-payment for assets.  It uses leverage to overcome the legacy of leverage.  It’s the taxpayer who provides the over-payment.33

The Auto Task Force.  There were no members of the Task Force with a background in the automobile industry.34  Instead the two lead members are former Lazard partners.  This may be relevant: Rahm Emanuel was brought into the Wasserstein firm by Bruce Wasserstein himself, who’s also the head of Lazard.  Perhaps coincidently, the Task Force insists that Chrysler merge with Fiat — whose financial advisor is Lazard — which would earn a fee on the consummation of the merger.  Lazard has been seeking a Chrysler-Fiat hook-up since the mid-60’s.35

The Administration’s cap and trade plan for reducing carbon 2 emissions resembles in rationale and principle the architecture of a Hamilton Project discussion paper.  The aim is to avoid taxes and regulations.  But the means are just as important: an auction system whereby corporations must buy rights to pollute — generating a bonanza for the trading community, who earn commissions for performing the trades.36

It’s the handling of the TARP (Troubled Asset Relief Program), though, that provides the most obvious evidence of the Administration’s tilt towards the FIRE industry.  First the AIG bonuses.  Despite the Administration’s effort to blame Senator Christopher Dodd (D. Conn.) for allowing the $450 million payments, it turned out that Dodd’s original bill actually tried to prohibit them.  Dodd was a plausible fall guy since he was the no.1 recipient of AIG campaign funds during the 2008 election cycle.  But it was Treasury officials’ objections to the prohibition that made bonuses possible.37  Second, there’s the administration’s legal money laundering of billions through AIG in order to remunerate the counterparties — banks and shadow banks.  Goldman Sachs got the most — $13 billion — in order to make good on AIG’s obligations to Goldman; but several other foreign banks scored nearly as well.38

What conclusions can we draw from the Obama-FDR comparison?  It’s that so far Obama appears more as the avatar of Herbert Hoover than of FDR.  No more than Hoover could break with the financial orthodoxies of the Mellon era can Obama separate himself from those of the Age of Derivatives.  This resemblance may become clearer if the recovery of the last month proves to be a false dawn.  Like the recovery economists thought they saw in the first quarter of 1930.  Or Japan in 1992.

But I don’t want to draw the seemingly logical conclusion that, because Obama is misperceived as FDR’s avatar, we socialists should rally around a more authentic Rooseveltian reincarnation.  After all, FDR used the fight against finance capital to save capitalism and marginalize the Left.  He channeled the anger against capitalism into rage against finance capitalism, transforming incipient class-consciousness into a kind of communal populism, with Americans united as one people against a comparative handful of despised Wall Street despots.

I’m not suggesting either that we start scattering rose petals in bankers’ paths either.  Or that we should oppose banking and securities reform.  But I’m skeptical of the centrality of finance capital in the crisis and hostile to the idea that our political focus should be getting rid of finance capitalism.  Transforming finance is a necessary but utterly insufficient condition for getting to the kind of society we socialists want.

It’s tempting to take on the financiers because they’re such an easy target and because of that other specter: the third shadow I’d like to describe after Lamont Cranston and the shadow banking revival — that’s the return of the shadow of depression economics and depression-style thinking about capitalism.

Many look to the 30s as a Golden Age for the Left.  Well, perhaps not in Germany or Italy.  At least in the U.S., where the Left went from marginality to being in the center of everything that was exciting.  It was the era of the popular front.  And populism.  The socialist principle that workers had special interests that couldn’t be submerged in national unity was quietly scuttled.  Communists tacitly or openly supported FDR.  They worked within the Democratic Party.  They got jobs in the administration.  Even Marxist economists like Harry Magdoff and Paul Sweezy.  Not to mention Harry Dexter White.  Communists also got CIO organizing jobs with a founder of that organization John L. Lewis — who, when asked how he could hire communists, replied, “Who gets the bird, the bird dog or the hunter?”39

But it was all a political bubble — one that burst with the outbreak of the Cold War.  The Left lacked two of the three basic requirements for a real Left: an independent party; and an independent base in the labor movement.

You may think I’m being over-intellectual, but at least part of the reason for the lack of an independent politics was the third missing leg: the lack of an independent analysis of capitalism.  During the 1930s, Left, Right, and Center all adopted strikingly similar analyses: capitalism had developed into a new, decadent stage, dominated by finance.  We’ve seen the priority Roosevelt gave to fighting Wall Street.

So did National Socialism.  Big swaths of Mein Kampf were devoted Hitler’s theory of capitalism — views he developed, he says, from Gottfried Feder.  It was from Feder that Hitler says he learned to distinguish between productive and fictitious capital.40  What’s good is the national economy; what’s bad is the domination of international finance and stock exchange capital.  Hitler gives the clearest reasons why the attack on finance capital makes political sense for those committed to capitalism: “The sharp separation of stock exchange capital from the national economy offered the possibility of opposing the internationalization of the Germany economy without at the same time menacing the foundations of an independent national self-maintenance, the struggle against all capital.”41

In other words, you foreground the struggle against finance capital in order to background the struggle against capital as such, uniting the volk against the mainly Jewish plutocrats.  Workers’ concerns are submerged in the new unity.  They’re exploited not by their immediate bosses but by the Jewish international financiers — who of course exploit all patriotic Germans.

Mussolini didn’t make the same equation between Jews and plutocracy.  But in an important article written the same year as Roosevelt’s campaign against Wall Street, Mussolini sharply separated finance and industry in a stage theory of capitalist development.  First there was the “heroic stage” marked by the industrial revolution in Europe.  But capitalism wound down during its second stage — the era between 1830 and 1870 was static — and beginning in 1870 turned decadent, a stage he termed “supercapitalism.”  What prevailed now was “decadent” capitalism dominated by finance, speculation, and consumerism.  Mussolini was against supercapitalism but for heroic capitalism.  Only fascism, he argued, could make capitalism heroic again.42

By far the most developed analysis of finance capital remains that carried out by Lenin in his pamphlet Imperialism, written a little more than a decade prior to the Great Depression.  Because of bank control of lending, industrial capital had become subordinated to the banks; competition had given way to monopoly and produced huge surpluses of capital which had to be exported to less developed countries, causing a scramble among the developed countries for control.  Imperialism, war, and the corruption of the First World labor movement were the main consequences, all indicating that capitalism had reached its highest, last and arguably its worst stage.43

What’s wrong with this?  I can’t do the critique justice but two things.  We should be skeptical of the idea that there is a decadent stage of capitalism, which bars even the possibility of revival.  Just because so many people thought it so in the 30s didn’t make it true.  The Left shouldn’t underestimate capitalism’s powers of resilience.  It’s important to have an exit strategy in case the crisis turns not to be final.  Second, we should also be skeptical of the idea that the ultimate cause of crises lies in the FIRE sector: that bankers brought down an otherwise healthy capitalism.  Sometimes, the pain you feel in your throat doesn’t come from your throat; it comes from acid reflux in your stomach.  Similarly, asset inflation and leveraged finance are reliable symptoms of the overproduction of industrial capital.  Surplus profits earned by manufacturing in China, and elsewhere, flowed back to the U.S.: $5 trillion in seven years.  It’s this flow that lowers interest rates and causes the financial wilding too easily attributed to Greenspan and his too easy monetary policy.  It’s especially significant that the flow of industrial surplus capital came in despite low interest rates.44  The finance capital analysis led to support for the notion that capitalism was basically okay except for the hypertrophy of finance and could be remedied by some version of either state capitalism or state socialism.  While the New Deal variant was by far the least awful, we don’t want to go there again.

How do we escape from the wheel of political re-incarnation?  We need to ask ourselves: if we abolished the stock exchange and all forms of finance capital, would exploitation remain?  Yes, because the means of production would still be monopolized.  Would inequality remain?  Yes, because we would still have centralization and concentration of capital?  Would poverty remain?  Yes, because workers would be still competing with each other.  Would instability remain?  Yes, because capitalism would remain an unplanned system.  Nirvana may be beyond our reach, but I think we can have a better rendezvous with destiny if we fight capitalism and not just finance capitalism.


1  Jon Cohen and Dan Balz, “Blame for Downturn Not Fixed on Obama: 6 in 10 Back His Handling of Economy,” Washington Post, March 31, 2009, A01.

2  “Historical Rankings of United States Presidents,” Wikipedia.

3  “The New New Deal,” Time Magazine Cover, November 24, 2008.

4  Thomas Friedman, “Obama’s Big, Bold Bet,” New York Times, April 4, 2009.

5  NYU professor Nouriel Roubini’s estimate is $3.6 trillion.

6  “Major Institutions,”

7  “A Rendezvous with Destiny,” Speech before the 1936 Democratic National Convention, Philadelphia, Pennsylvania, June 27, 1936.

8  See Ron Chernow, “Where’s Our Ferdinand Pecora,” New York Times, January 5, 2009.

9  FDR to House 21.XI. 33.

10  Adolph A. Berle and Gardner Means, The Modern Corporation and Private Property (New York: Harcourt, Brace and World, 1968).

11  Wolfgang Schivelbusch, Three New Deals (New York: Metropolitan Books, 2008), 134-5.

12  Bernard Baruch is sometimes cited as part of the Brain Trust.  Certainly he advised the President.  And he was a Wall Streeter.  But a renegade Wall Streeter who believed in state control of industry and who was known as “The Lone Wolf of Wall Street.”

13  Conrad Black, 277-8.

14 “1930s Engineering,” PBS.

15  “A Rendezvous with Destiny,” op. cit.  “These economic royalists complain that we seek to overthrow the institutions of America.  What they really complain of is that we seek to take away their power.”

16  Carl Schmitt, The Concept of the Political (Chicago: University of Chicago Press, 1996), 26.  “The specific distinction to which political activity and motives can be reduced is that between friend and enemy.”

16 “Barack Obama’s Inaugural Address,” Transcript, January 20, 2009.

18  “A New Foundation,” Remarks of President Barack Obama, Washington D.C., April 14, 2009.

19  See Politico.

20  See Atlantic.

21  William Cohan, House of Cards (New York: Doubleday, 2009) 113-20.

22  Louise Story, “A Rich Education for Summers (after Harvard),” New York Times, April 5, 2009; Jeff Zeleny, “Financial Industry Paid Millions to Obama Aide,” New York Times, April 2, 2009.

23  Michael Luo, “In Banking Emanuel Made Money and Connections,” New York Times, December 3, 2008.

24  Binyamin Appelbaum, “Grim Proving Ground for Obama’s Housing Policy,” Boston Globe, June 27, 2008.

25  <>, March 20, 2009.

26  By everyone from Simon Johnson, former IMF chief economist; John Snow, former Treasury secretary; to Mike Davis writing in the New Left Review.

27  Paul Johnson, A History of the American People (New York: Harper Perennial, 1999), 217.

28  Story, op. cit.

29  See Kevin Phillips, “Jefferson, Jackson and Robert Rubin’s Hamilton Project,” TMP, May 17, 2006.

30  “Launch of the Hamilton Project: Restoring America’s Promise of Opportunity, Prosperity and Growth,” Brookings Institution, 2006.

31  Gabrielle Coppola, “Geithner’s Plan May Blunt Junk Appetite, Peters Says (Update1),” Bloomberg, April 6, 2009.

32  Michael Hirsh, “Whose Plan Is This?” Newsweek, April 3, 2009.

33  James Keller, “Game Theory Exposes PPIP as Fraudulent,” Real Clear Markets, April 9,  2009.

34  “Obama’s Auto Task Force Lacks Expertise,” Seeking Alpha, March 26, 2009.

35  William D. Cohan, The Last Tycoons (New York: First Anchor Books, 2008), 170.

36  Robert N. Stavins, “A U.S. Cap-and-Trade System to Address Global Climate Change,” Hamilton Project Discussion Paper, Brookings Institution, October 2007.

37  Rich Edson, “Amid AIG Furor, Dodd Tries to Undo Bonus Protections in the ‘Dodd Amendment’ Rules,” Fox Business, March 17, 2009.

38 Mary Williams Walsh, “A.I.G. Lists Banks It Paid With U.S. Bailout Funds,” New York Times, March 16, 2009.

39  <>

40  Adolf Hitler, Mein Kampf (New York: Houghton Mifflin Co., 1945), 209.

41  Ibid, 213.

42  Simonetta Falasca-Zamponi, Fascist Spectacle (Berkeley: University of California Press, 2000) 137-9.

43  Robert C. Tucker (ed), The Lenin Anthology (New York: W. W. Norton & Co., 1975), 204-274.

44  See the argument in my “In Defense of Wall Street and Washington,” New Politics, 2009.

Robert Fitch is the author of Solidarity for Sale: How Corruption Destroyed the Labor Movement and Undermined America’s Promise and The Assassination of New York.  “The Return of the Shadow” is the text of the talk that he gave at a Left Forum 2009 panel.