THE VEIL OVER CAPITALISM
Normally, the Veils of Power conceal well the inner workings of American capitalism. But when that economic system nearly collapses into itself, as happened in the Great Depression of the 1930s and in the second CheneyBush term, it's fairly easy to see the outlines of how that system behaves.
Simply stated, greed controls all. CheneyBush, true believers in laissez-faire capitalism, permitted greed to flourish in the financial/investment sector devoid of oversight. So what if firms were selling bundled derivatives around the globe based on nothing but a Ponzi-like belief in constantly rising real-estate values? Everyone was making out like bandits. Spread the wealth. The wondrously stable "free-market" economy could handle whatever blips came its way.
But it wasn't a mere blip in late-'07 and 2008. It was a perfect storm of economic awfulness, involving all sectors of banking, real estate, investment, etc. The resulting recession/depression, which we're still in and won't leave anytime soon, is basically punishing the poor and ruining the American middle class, all while the still-unregulated large banks and big investment houses took the bailout money and ran with it, and have returned to much the same risky financial adventurism that nearly took down the U.S. and world economies. (While, of course, still awarding themselves unconscionably huge bonuses.)
Even former Fed Chairman Alan Greenspan had to publicly admit that he, and by implication the American economic system, had been operating for more than four decades on a false theory that "free market" capitalism always corrected itself and didn't need governmental regulation. But there has been no such "correction" and, unless the government passes and enforces some regulation of their misbehavior soon, prepare for Great Depression#2.
THE EMPEROR APPEARS NAKED
What happens when veils are removed? One sees the system exposed, all the warts, jerry-rigged structures, thievery, manipulation, corruption, etc. We saw American capitalism naked, and it wasn't a pretty sight. Still, these financial players ("too big to allow to fail") rule the roost, along with similar behemoths in the fields of energy, pharmaceuticals, insurance, the military-industrial complex, etc. Despite the low opinion in which they are regarded by the masses, they exert enormous political influence and continue to operate mostly as they wish even today.
Congress takes no effective action even while smoldering rage and resentment and desire for political vengeance is building around the country, especially on the Left and Right but also in the middle, as ordinary citizens see their retirement funds shrink or disappear, as states can't fund social or educational services, as municipalities run out of money to maintain the infrastructure of basic civil life.
When the system collapsed in the 1930s, and socialism gained ground in the public imagination, the patrician FDR realized that capitalism was doomed unless it could be reformed, with serious financial oversight, more anti-trust laws, and firewalls between regular banks and investment houses (the "Glass-Steagall" Act). In taking these reformist actions, regarded by Republicans in those days as near-traitorous acts of class-betrayal, President Roosevelt saved the American capitalist system.
But, quite obviously, CheneyBush, locked into their ideology of rampant greed and free-market illusions, exhibited no such wisdom, and celebrated the repeal of Glass-Steagall, and here we are several years later still trying to climb out of the Republican-generated economic pit.
Economists tell us that we should expect at least a 10% unemployment rate (that's the officially-reckoned rate, it might be as much as 20% out in the real world) for at least five to ten years. To close that employment gap, the economy might best need another huge stimulus infusion to help create jobs that the private sector is not willing or able to do. But good luck with that. Obama probably won't touch that third-rail now, and the 2010 midterm elections don't offer all that much hope either for stable majority control for the Democrats.
At the very least, if Obama can keep in mind the FDR/New Deal lessons, and if he wants to save an already-shaky capitalism from imploding, he's got to lead the charge for major, systemic reform, get it passed, and enforce the hell out of it. Continuing to play footsy with the financial big boys will not do, and will lead to him being a one-term president for sure. One suspects he knows this already, but is politically incapable of moving and fighting.
WHAT CAN PROGRESSIVES DO?
So why am I somewhat hopeful, given all this chaos and corruption and failure at the top?
Because the veils have been removed.
Most of us political junkies were aware of (or at least suspected) most of these revelations before, but now the inner workings of the corporatist-capitalist state have been revealed for the entire citizenry. Most of the anger and frustration in the body politic is inchoate at this point or has gone into the demagoguery of the tea party sort. But this scattered and growing rage and resentment is a wake-up call to those of us on the progressive left to get our asses in gear, create ourselves a wide, deep movement, and use this new public knowledge and frustration to organize for the battles now and to come.
Normally, the Veils of Power conceal well the inner workings of American capitalism. But when that economic system nearly collapses into itself, as happened in the Great Depression of the 1930s and in the second CheneyBush term, it's fairly easy to see the outlines of how that system behaves.
Simply stated, greed controls all. CheneyBush, true believers in laissez-faire capitalism, permitted greed to flourish in the financial/investment sector devoid of oversight. So what if firms were selling bundled derivatives around the globe based on nothing but a Ponzi-like belief in constantly rising real-estate values? Everyone was making out like bandits. Spread the wealth. The wondrously stable "free-market" economy could handle whatever blips came its way.
But it wasn't a mere blip in late-'07 and 2008. It was a perfect storm of economic awfulness, involving all sectors of banking, real estate, investment, etc. The resulting recession/depression, which we're still in and won't leave anytime soon, is basically punishing the poor and ruining the American middle class, all while the still-unregulated large banks and big investment houses took the bailout money and ran with it, and have returned to much the same risky financial adventurism that nearly took down the U.S. and world economies. (While, of course, still awarding themselves unconscionably huge bonuses.)
THE EMPEROR APPEARS NAKED
What happens when veils are removed? One sees the system exposed, all the warts, jerry-rigged structures, thievery, manipulation, corruption, etc. We saw American capitalism naked, and it wasn't a pretty sight. Still, these financial players ("too big to allow to fail") rule the roost, along with similar behemoths in the fields of energy, pharmaceuticals, insurance, the military-industrial complex, etc. Despite the low opinion in which they are regarded by the masses, they exert enormous political influence and continue to operate mostly as they wish even today.
Congress takes no effective action even while smoldering rage and resentment and desire for political vengeance is building around the country, especially on the Left and Right but also in the middle, as ordinary citizens see their retirement funds shrink or disappear, as states can't fund social or educational services, as municipalities run out of money to maintain the infrastructure of basic civil life.
When the system collapsed in the 1930s, and socialism gained ground in the public imagination, the patrician FDR realized that capitalism was doomed unless it could be reformed, with serious financial oversight, more anti-trust laws, and firewalls between regular banks and investment houses (the "Glass-Steagall" Act). In taking these reformist actions, regarded by Republicans in those days as near-traitorous acts of class-betrayal, President Roosevelt saved the American capitalist system.
But, quite obviously, CheneyBush, locked into their ideology of rampant greed and free-market illusions, exhibited no such wisdom, and celebrated the repeal of Glass-Steagall, and here we are several years later still trying to climb out of the Republican-generated economic pit.
Economists tell us that we should expect at least a 10% unemployment rate (that's the officially-reckoned rate, it might be as much as 20% out in the real world) for at least five to ten years. To close that employment gap, the economy might best need another huge stimulus infusion to help create jobs that the private sector is not willing or able to do. But good luck with that. Obama probably won't touch that third-rail now, and the 2010 midterm elections don't offer all that much hope either for stable majority control for the Democrats.
At the very least, if Obama can keep in mind the FDR/New Deal lessons, and if he wants to save an already-shaky capitalism from imploding, he's got to lead the charge for major, systemic reform, get it passed, and enforce the hell out of it. Continuing to play footsy with the financial big boys will not do, and will lead to him being a one-term president for sure. One suspects he knows this already, but is politically incapable of moving and fighting.
WHAT CAN PROGRESSIVES DO?
So why am I somewhat hopeful, given all this chaos and corruption and failure at the top?
Because the veils have been removed.
Most of us political junkies were aware of (or at least suspected) most of these revelations before, but now the inner workings of the corporatist-capitalist state have been revealed for the entire citizenry. Most of the anger and frustration in the body politic is inchoate at this point or has gone into the demagoguery of the tea party sort. But this scattered and growing rage and resentment is a wake-up call to those of us on the progressive left to get our asses in gear, create ourselves a wide, deep movement, and use this new public knowledge and frustration to organize for the battles now and to come.
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