The New Socialism
Matthew Yglesias:
Over the past 30-35 years or so, the world as a whole has retreated from the high tide of state management of the economy that was reached around midcentury, and moved more in the direction of laissez faire. But I think it’s fair to say that though the trend has been perfectly general, the political leadership in this movement has tended to come from Washington and London, where Ronald Reagan and Margaret Thatcher were the loudest and clearest exponents of it and their successors on the center-left tended to confirm, rather than reverse, a new Anglophone consensus. And yet:
The British and American plans, though far from identical, have two common elements according to officials: injection of government money into banks in return for ownership stakes and guarantees of repayment for various types of loans. […] The Treasury’s openness to direct infusions of cash is a remarkable change in tone from a few weeks ago, when the Treasury secretary, Henry M. Paulson Jr., and the Federal Reserve chairman, Ben S. Bernanke, discouraged such actions in testimony before Congress. “Putting capital in institutions is about failure,” Mr. Paulson declared on Sept. 23. “This is about success.”
This is what a lot of left-of-center economists said in the first place, but the ideological taboo against nationalization was very strong. Now, though, the forces of looming collapse in the banking sector are proving even stronger. Thus, it looks like it’ll be George W. Bush, Hank Paulson, and Ben Bernanke who bring a very strong dose of socialism to the United States of America. And yet Andy McCarthy’s busy worrying if Barack Obama is a closet Maoist.
(Via Ezra Klein.)
America: The Gift Shop
If American foreign policy had a gift shop, what would it sell? (Via Mike Soron.)
The Transfer of Wealth
According to Senator Byron Dorgan, the total amount of wealth being transferred amounts to $1.7 trillion or $12,200 per taxpayer, via Lenin. I also love this little tidbit from Section 8 of the Treasury Financial Bail-out Proposal:
“Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.”
Check out Karyn Strickler’s and Robin Varghese’s comments on this.
Bailout Talking Points
Posted at 5:22 PMThe blogosphere reacts!
- David Brooks thinks we should take this opportunity to completely overhaul the financial system by hoping for the appearance of a financial oligarchy of “bipartisan” Economic Wise Men who will fix everything. Glenn Greenwald reminds him that this was basically the guiding idea before the entire financial market collapsed!
- Kos asks why some of the planned $700 bn. bailout will go to banks that aren’t even failing. TPM has more thoughts on this.
- Doubt is cast on whether or not we’re really in a “crisis.”
- Jonathon Schwarz at A Tiny Revolution sums up what I will likely find to be the most fucked up part this entire scheme:
Whatever happens with the Wall Street bailout, I hope the recipients will take $30 million and endow a Hank Paulson Chair in Free Enterprise at AEI. Then the person in that position can spend the next forty years writing op-eds and going on TV telling us how if we just deregulate Wall Street it will make us all rich! rich! rich!
I think it’s clear that the Fed/Treasury is in the wrong: for one, the problem is not simply “liquidity,” it’s rather that the financial institutions, which had little oversight, were using bad loans as collateral. Some have used that argument to assert that the people who took out subprime mortgages are fundamentally at fault, but this perverted logic ignores the fact that the entire solipsistic speculation started with Wall Street.
Now all of the die-hard free-marketeers are becoming socialists, and so it’s at such a time that socialists should be extremely skeptical: is institutional oversight really the answer? What kind of punishment should be administered? How will a bailout close to $1 trillion affect social benefits and public programs? It seems that, if anything, this period of crisis offers us a chance to rapidly re-politicize politics against the quasi-religious view that capital needs to be “sacrificed” to the totemic Market Deity. As Glenn Greenwald writes:
This was one of the central arguments of David Sirota’s book — Uprising: An Unauthorized Tour of the Populist Revolt Scaring Wall Street and Washington: namely, that while cultural wedge issues have divided ordinary American on the Left and Right, there is a growing, angry populism among both factions against the dominant Washington establishment elite that is so transparently running the Federal Government on behalf of the tiny group of corporate elite which funds and owns them. The backlash against the Paulson plan on both the Left and Right is a function of that same anger and resentment.
The Left ought to take advantage of this populist resentment and transform it into a political movement, rather than side with liberals calling for more oversight or modifications of the Republican financial agenda, such as Chris Dodd. How they might go about this, I’m not quite sure.
The Pantheon of Capital
Premediation:
So where does the agency of the market to prompt the federal government to hand over nearly $1 trillion to bail out Wall Street come from? This agency, I would argue, in some sense comes from, participates in, the agency of premediation. The tone of this mediation is urgency. We are to be on the alert, to be concerned, and ultimately to be scared. The agents that we should fear are called “the market” or “Wall Street” or “the Dow.” “The market will not be happy if too many limitations are put on this bailout.” “Wall Street is worried that unless the Fed acts, more turbulence lies ahead.” “The Dow is demonstrating its concern about the terms of the bailout.” Not unlike the pantheon of Greco-Roman gods, these powerful creatures need to be feared and respected and pacified. The mediasphere is filled with the priests and votaries of these gods, warning the public of the danger that could come if they are angered or their will is flaunted.
…But the gods of Wall Street are in turmoil and they are still at the present moment more powerful than the collective voices of Main Street. Only when the premediation of Main Street’s agency begins to compete with the premediation of Wall Street’s agency will it be possible to imagine an economic future in which the US government acts to bail out the overwhelming majority of the American public who are threatened by this financial crisis, not the minority of those whose investments and livelihoods depend upon the financial markets.
‘All of a Sudden’
Senator Bernie Sanders:
For years now, they’ve told us that we can’t afford — that the government providing healthcare to all people is just unimaginable; it can’t be done. We don’t have the money to rebuild our infrastructure. We don’t have the money to wipe out poverty. We can’t do it. But all of a sudden, yeah, we do have $700 billion for a bailout of Wall Street.
Watch the video interview here. (Via Daring Fireball.)
Paulson Bailout Plan a Historic Swindle
William Greider in The Nation:
Financial-market wise guys, who had been seized with fear, are suddenly drunk with hope. They are rallying explosively because they think they have successfully stampeded Washington into accepting the Wall Street Journal solution to the crisis: dump it all on the taxpayers. That is the meaning of the massive bailout Treasury Secretary Henry Paulson has shopped around Congress. It would relieve the major banks and investment firms of their mountainous rotten assets and make the public swallow their losses—many hundreds of billions, maybe much more. What’s not to like if you are a financial titan threatened with extinction?
If Wall Street gets away with this, it will represent an historic swindle of the American public—all sugar for the villains, lasting pain and damage for the victims. My advice to Washington politicians: Stop, take a deep breath and examine what you are being told to do by so-called “responsible opinion.” If this deal succeeds, I predict it will become a transforming event in American politics—exposing the deep deformities in our democracy and launching a tidal wave of righteous anger and popular rebellion. As I have been saying for several months, this crisis has the potential to bring down one or both political parties, take your choice.
(Via A Tiny Revolution.)
Vote for Obama
Shaviro over at Pinocchio Theory argues that, despite the fact that the Democrats will more than likely disappoint anyone who thinks anything will actually “change” beyond a pathetic return to Clintonian neoliberalism, one should nevertheless vote for Obama:
It is not stupid to vote for McCain/Palin; rather, it is evil. Republicans are intrinsically, and necessarily, morally depraved. Anyone who votes for McCain/Palin, or supports them, by that very fact demonstrates that he or she is a person utterly devoid of basic morality, and lacking in any respect for others. To vote for McCain is to shit on human civilization, and show utter contempt for human values and human hopes. And not in spite of the Democrats’ hypocrisy, but rather precisely because of this — because their hypocrisy is, as it were, the compliment that vice pays to virtue — the only moral thing to do in this election is to vote for Obama.
(Via I cite.)
The Free Market
Atrios over at Eschaton:
The entire financial system is practically collapsing and they’re lamenting the possibility of more regulation. I don’t think the sports/referee metaphor is perfect, but it’s probably good enough. People who prattle on about “the free market” are usually too stupid to have a clue how complicated and pervasive the “rules” had to be to to get a well-functioning modern market system: sophisticated concepts of contracts and enforcement, property rights, legal entities, proper accounting, bankruptcy, limited liability, etc… etc…, did not descend from the heavens but were, in fact, created.
Toyota Brown
Posted at 11:42 PMSo although many people seem to be dreaming of the slightly more exciting Republican nominee, last night I had the strangest dream involving Obama and McCain. It took place at a surreal convention center; the decor reminded me of a mix between a David Lynch film and a vibrant Nintendo videogame. Anyhow, the video being broadcast was showcasing, in a cartoony, almost socialist realist form, all of the various ways in which Barack Obama was better than McCain, making the case for how easy it should be for him to win. A typically stupid “dream as a fulfillment of a wish,” as Freud said.
Then John McCain took the stage with someone who was apparently an old buddy of his from their rock and roll days. The guy had sagging, but tight white skin, numerous piercings, shades and a soul patch, reminiscent of Tommy Lee. His nickname for McCain was “Toyota Brown,” the origins of which were not explained, except that it was referred to as a term of endearment from when John McCain, too, was evidently a hard rocker in the mid- to late-70’s.
Which is all to say that from now on I’ll be referring to John McCain as “Toyota Brown” on this blog, and hope others follow in my footsteps.
Change We Can Believe In
While John McCain is out and about touting how the “fundamentals” of the economy are strong (as to what he means by “fundamentals,” I’m sure he has a very thorough answer), because to say they aren’t means that you are insulting hard-working Americans (unlike, say, actively voting against workers’ rights), McCain’s economic council is busy pretending that they had nothing to do with bringing about one of the worst economic crises in U.S. history. Worth mentioning in particular is Phil “A Nation of Whiners” Gramm’s special role:
Gramm orchestrated the Gramm-Leach-Bliley Act in 1999 which “destroyed the Depression-era barrier to the merger of stockbrokers, banks and insurance companies.” He also pushed the Commodity Futures Modernization Act in 2000, which made legal “the mortgage swaps distancing the originator of the loan from the ultimate collector.” The Nation writes that “those two acts effectively ended significant regulation of the financial community.”
So basically, if this chart of Obama’s and McCain’s respective tax proposals hadn’t already convinced you that it’s in your best interest to vote for Obama, then McCain’s surreal ineptitude regarding the economy, as well as his cadre of buffoons, should perhaps be some food for thought.
Vote for Change
The Obama campaign has a nifty, Katamari Damacy-esque website where you can register to vote quickly and easily, unlike the McCain campaign, which could only conceivably win if they were to actively discourage new voters from registering. I followed the instructions and was able to register to vote absentee in my county in about 10 minutes tops. I think the process for normal voting is a bit shorter, since you don’t have to take a detour through state and then county websites. (Via Bitch, Ph.D..)
The Palin-Whatshisname Ticket
Hopefully this will be the last post in a while that contains the name “Palin” in the title, but this article by Frank Rich on the unbelievable phoniness and absurdity of the McCain campaign is probably one of the better op-ed columns I’ve read in the New York Times in quite a while. If you’re lazy, though, here’s the conclusion:
As Republicans know best, fear does work. If Obama is to convey just what’s at stake, he must slice through the campaign’s lipstick jungle and show Americans the real perils that lie around the bend.