Rob Kall draws our attention, today, to the way senators and congressmen are responding to news that what is going on right now with our economy could become worse than the Great Depression in not just years or months but hours or days.
I heard this sentiment expressed by Sen. Chris Dodd, the man who could have done way more to head off what happened on Wall Street this week. Dodd expressed this on Hardball yesterday and also shrugged off any criticism from McCain that he was tied into Freddie Mac and Fannie Mae because out of all those in Congress he has received the most money from them.
Well, it’s kind of like what Dennis Kucinich said in a debate during the Democratic primary season. He said this in the debate on MSNBC moderated by Tim Russert in October 2007:
“Well, I'm -- I'm glad to hear people take a stand for integrity. When people get money from New York hedge funds and then they attack another person for getting money from Washington interest groups, you know what? They're both right. So I'm not going to get in the middle of that one.”
Sure, it’s odd for McCain, who takes money from Wall Street, to criticize Dodd and Obama for taking money because it’s politically expedient. But, that’s the way you move on this political terrain. Nobody in Washington (besides Kucinich, Feingold, or Paul) is doing anything because it is morally righteous to take such an action.
So, back to this whole idea that if we do not act, than within days we will experience financial Armageddon. The danger of buying into such thinking is that something could be pushed through that is far more damaging to us than the current economic policies we have.
Sure, the free marketers, the super capitalists have had their way with Wall Street, K Street, Washington, and more, but there is much to be changed for their benefit still.
In response to Katrina (and this is from Naomi Klein’s Shock Doctrine), Milton Friedman has this idea that instead of spending billions on the reconstruction and rebuilding and improvement of New Orleans’ existing public school system, “government should provide families with vouchers, which they could spend at private institutions, many run at a profit, that would be subsidized by the state. It was crucial, Friedman wrote, that this fundamental change not be a stopgap but rather ‘a permanent reform’.”
Such an example should lead us to wonder what the capitalists are dreaming of pushing through at this moment when Americans are on edge fearing a repeat of a horrific Great Depression their parents or grandparents lived through. It is this “memory” that makes people “trust” that our government is doing what’s necessary to prevent something worse from happening.
Take note of how the capitalists in this country responded to 9/11. Naomi Klein writes:
“…the White House was packed with Friedman’s disciples, including his close friend Donald Rumsfeld. The Bush team seized the moment of collective vertigo with chilling speed---not, as some have claimed, because the administration deviously plotted the crisis but because the key figures of the administration, veterans of earlier disaster capitalism experiments in Latin America and Eastern Europe, were part of a movement that prays for crisis the way drought-struck farmers pray for rain, and the way Christian-Zionist end-timers pray for the Rapture. When the long awaited disaster strikes, they know instantly that their moment has come at last.”
I believe the moment has come at last, and it is in these times when such a moment has come that the capitalists will push through “reforms” to take care of the shock. While we are in awe, we must not let the awe take hold of our capacity to think. Mentally, we must remain aloof and alert to the “reforms.” We must demand specifics which describe what is being done.
Simply trusting in government to do the right thing because we Americans think they “know history” or because people do not want another Great Depression is dangerously naïve.
Naomi Klein’s recent writing posted on her website tells us the following:
Whatever the events of this week mean, nobody should believe the overblown claims that the market crisis signals the death of "free market" ideology. Free market ideology has always been a servant to the interests of capital, and its presence ebbs and flows depending on its usefulness to those interests.
During boom times, it's profitable to preach laissez faire, because an absentee government allows speculative bubbles to inflate. When those bubbles burst, the ideology becomes a hindrance, and it goes dormant while big government rides to the rescue. But rest assured: the ideology will come roaring back when the bailouts are done. The massive debts the public is accumulating to bail out the speculators will then become part of a global budget crisis that will be the rationalization for deep cuts to social programs, and for a renewed push to privatize what is left of the public sector. We will also be told that our hopes for a green future are, sadly, too costly.
What we don't know is how the public will respond. Consider that in North America, everybody under the age of 40 grew up being told that the government can't intervene to improve our lives, that government is the problem not the solution, that laissez faire was the only option. Now, we are suddenly seeing an extremely activist, intensely interventionist government, seemingly willing to do whatever it takes to save investors from themselves.
This spectacle necessarily raises the question: if the state can intervene to save corporations that took reckless risks in the housing markets, why can't it intervene to prevent millions of Americans from imminent foreclosure? By the same token, if $85bn can be made instantly available to buy the insurance giant AIG, why is single-payer health care – which would protect Americans from the predatory practices of health-care insurance companies – seemingly such an unattainable dream? And if ever more corporations need taxpayer funds to stay afloat, why can't taxpayers make demands in return – like caps on executive pay, and a guarantee against more job losses?
I would pay particular attention to the last paragraph. We have the power to awaken people to the contradictions which this system perpetrates by simply attending to the question Naomi Klein raises.
If government can bail out corporations, why can’t government bail out us, we the people who are losing our homes?
It’s a simple question. One that I believe is worth answering scientifically. But, my intuitions tell me the problem isn’t that government hasn’t the money to take care of the foreclosure crisis and Wall Street. The problem isn’t that Wall Street must be saved to stop the foreclosure crisis from becoming worse. The problem isn’t the availability of money (unfortunately) because the government will keep telling the Federal Reserve to print more money.
Correct me if I am wrong, but the problem is that whether the government will come down on the side of the people or Wall Street is a political question. It’s a question of moral fortitude and courage.
The politicians shocked or not, are buying into the awe of the moment. Maybe the politicians wish for the fervor and uproar to die down so they can return to the campaign trail.
No matter what is motivating those in the Legislative Branch to show they are panicked, we are in danger when a branch that is supposed to check and balance another branch is giving the Treasury Department a blank check to do whatever they deem necessary to get us out of this mess.
