[A-List] Reflections on the (Unplanned) Death of an Ideology

[Leighm]

The 'IDEOLOGY' IS NOT 'dead', and the looting/attempted looting 
continues unabated.

Cf. "American steel industry needs $1 trillion bailout"


Charles Brown wrote:
> Reflections on the (Unplanned) Death of an Ideology
> By Peter Zerner and Joel Wendland
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> The financial meltdown on Wall Street has provoked a severe ideological
> crisis. Capitalism itself is under scrutiny. In the corporate media, one
> can now find regular discussions of Marxism, capitalism and socialism
> – not always positively presented to be sure, but at times the
> discussion has been thoughtful. 
>
> Even former Federal Reserve Board Chair Alan Greenspan, long an
> outspoken champion of free-market fundamentalism, told Congress in late
> October that he was in the midst of “an existential crisis.”
> Greenspan confessed that he had “made a mistake in presuming that the
> self-interests of organizations, specifically banks and others, were
> such that they were best capable of protecting their own shareholders
> and their equity in the firms." 
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> Another example of this trend is the recent Reuters analysis by Bernd
> Debusmann who writes that “Capitalism as we used to know it is on its
> deathbed. And those who predicted that the old brand, the unfettered,
> American-promoted system, was a danger to the world, are being
> vindicated. They include Karl Marx, whose thinking on banks seems oddly
> contemporary these days." 
>
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> On the other end of the spectrum, consider the confused display of
> logic in this op-ed from the Washington Post in October: "Is this the
> end of American capitalism?” The answer is that “we are not
> witnessing a crisis of the free market but a crisis of distorted
> markets." In the Post’s opinion, the collapse of the current system is
> not a capitalist crisis, because we are not living under “true
> capitalism.” The Post's editors, however, seemed unable to elaborate a
> vision of true capitalism. 
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> Former World Bank chief economist Joseph E. Stiglitz has offered more
> thoughtful observations. In a recent article in Vanity Fair entitled
> “Reversal of Fortune,” Stiglitz lists the chief characteristics
> of the ideology of free-market capitalism as practiced in the US:
> "special interest pressure, populist politics, bad economics, and sheer
> incompetence," characteristics which he views in turn as the root causes
> of the current crisis. 
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> Stiglitz hammers away at the anti-government ideology behind right-wing
> economic policy. “[This] ideology proclaimed that markets were always
> good and government always bad.... [but] the fact is that key problems
> facing our society cannot be addressed without effective government." In
> his criticism of neoliberalism, Stiglitz displays an independent streak
> and goes much further than most orthodox American economists dare. 
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> Like their counterparts among the nation’s CEOs, most US economists
> have long abandoned any pretense of practicing objective science.
> Instead, for the past three decades they have preferred to view the
> American economy through rose-colored glasses. Why shouldn’t they?
> When things go wrong, there is no price for their academic mistakes.
> This is perhaps the most distinctive feature of today’s no-fault
> capitalism. On the one hand “robbing with a fountain pen” often goes
> unpunished; on the other, acting as academic cheerleaders for
> neoliberalism carriers no risk for today’s practitioners of the
> “dismal science.” Among those who prophesy about the future of
> the American economy, there are always far more Pollyannas than
> Cassandras. 
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> Joseph Stiglitz is different. Having seen at close hand the damage
> wrought by the IMF and its neoliberal policies, especially among the
> world’s poorer nations, Stiglitz listened to his conscience and
> resigned his position as chief IMF economist in 1999. Since then he has
> criticized the neoliberal dogma of free-trade, an ideology which has
> served as a convenient fig leaf to conceal the multitude of crimes
> perpetrated by unregulated corporate greed operating on a global scale.
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> In Vanity Fair, Stiglitz points to the unspoken secret of US
> capitalism. "Our economy,” he wrote, “rests on public investments in
> technology, such as the Internet.” Advances in modern technology, he
> noted, have been the driving force behind the modern American economy
> and will continue to be so in the future. All these revolutionary
> developments – for example, information technology, alternative energy
> and space technology – have resulted from publicly-financed
> cooperative efforts between the US government and university and
> corporate research centers. 
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> Such advances, in turn, are transformed, for good or for ill, into
> lucrative sources of profit for US corporations and are exported
> throughout the world. All of these technological breakthroughs, however,
> resulted from carefully planned, government-backed efforts which
> harnessed the scientific and managerial talents of large numbers of
> individuals working together to achieve a common goal. The future of the
> American economy and the achievement of economic security for the
> American people lie in precisely this kind of planning and
> problem-solving. 
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> Markets, by themselves, have been decisively proven to be extremely
> inefficient regulators of economic life. As Stiglitz says, "We learned
> from the Depression that markets are not self-adjusting," adding that
> sporadic government interventions in the economy such as interest rate
> adjustments, are insufficient to prevent recurring economic crises. We
> are now faced with a wide range of interconnected economic problems,
> foremost among them the housing and financial crisis. But today’s
> economic crises are so systemic and widespread that they cannot be
> solved by simply adjusting interest rates. 
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> Because markets aren't self-adjusting and because a healthy, dynamic
> economy requires public financing and governmental regulation of the
> financial markets, it is obvious that the US is in dire need of a form
> of economic therapy far different from the free-market quackery
> practiced by the Bush administration. 
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> In his article, Stiglitz not only rejects the cult of free-market
> fundamentalism, but he also criticizes more orthodox proponents of
> limited government intervention by the Federal Reserve Board, as well as
> sporadic emergency bailouts like the Wall Street rescue package proposed
> by Bernanke and Paulson. As Stiglitz notes, the so-called “free
> market” comes with an enormous hidden price tag, which the American
> people are now being forced to pay. Part of the reason the costs are so
> high is that Washington lobbyists and special interests have bought
> access to the halls of Congress and the regulatory bodies that were
> originally designed to keep an eye on the criminal activities those who
> hire the lobbyists and buy the votes in Congress actually engage. They
> have essentially gamed the system and have, in Stiglitz’s words,
> “bent the rules to benefit themselves." 
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> This unfettered free-market system ran rampant during the Reagan-era
> and Republican one-party rule under George W. Bush. Under Bush, the
> corporate components of Bush’s true base, Halliburton, Blackwater USA,
> Big Oil, and the insurance and pharmaceutical companies have all lined
> up at the trough for no-bid government contracts, huge tax breaks,
> exemption from government oversight and a shooting spree in Iraq. It was
> during this new golden age of political corruption that Donald Diamond,
> the Arizona real estate tycoon, paid for John McCain’s help in
> acquiring a lucrative stretch of public land on the California coast, so
> he could erect McMansions on it. In the 1980s another Arizonan, Charles
> Keating, received special Senate favors from his
> “till-death-do-us-part” friend John McCain, along with four other
> US senators, enticing them by means of lavish campaign contributions to
> look the other way as his Lincoln Savings and Loan engaged in massive
> fraudulent activity. 
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> People before profits: An idea whose time has come 
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> The economic crisis we face is the direct result of the anarchy of a
> financial system guided purely by self-interest and profit. 
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> But if the self-interested quest for profits of the corporations and
> the wealthiest Americans has been proven to be responsible for the
> current financial chaos, what kinds of policies are needed in its place?
> Stiglitz calls for carefully-planned government intervention, reinforced
> oversight of the financial markets, massive investments in basic
> infrastructure, and new programs and regulations that allow homeowners
> who are faced with foreclosure to pay off their debts in a reasonable
> fashion and stay in their homes. 
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> Another respected economist, James K. Galbraith of the University of
> Texas (son of John Kenneth Galbraith, the prominent progressive
> economist of the Kennedy-Johnson years) recently addressed the crisis of
> capitalism in an article in Harper's Magazine simply titled "Plan." In
> it he advocates just that – a planned economy. Galbraith viewed the
> present system as a “mixed economy.” As it now exists, corporate
> interests dominate this mixed economy. With the rise of free market
> fundamentalism, corporate interests have totally overwhelmed a formally
> vital public component of the economy that has lain essentially dormant
> for decades since the time of FDR (with a brief attempt at resuscitation
> during the years of LBJ’s Great Society program). 
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> Galbraith seems to agree with Stiglitz that rigid adherence to policies
> based entirely on free market fundamentalism comes with a great price.
> In his view, those who have wielded power for so many years in US
> political and economic circles, fervently believe in using "the
> government to build monopolies, to control resources, to block
> regulation, to crush unions, [and] to divert as much as possible from
> taxpayers into private pockets." 
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> Obviously the solution to the present economic crisis is not a retreat
> to some more “authentic” or “original” form of capitalism, like
> the Washington Post op-ed writer dreams about. Nor does it lie in simply
> beefing up regulation and oversight of the financial markets and banks.
> Galbraith emphasizes that planning is the best solution. For him, the
> role of government should be to provide continuous oversight of the
> American economy and the inevitable excesses of capitalism. 
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> Only a democratically-based government that is responsive to the needs
> of the American people can provide the necessary planning and monetary
> resources to adequately address the problems that inevitably arise in a
> capitalist economy. Some of the negative consequences of unrestrained
> capitalism we are currently seeing are millions of home foreclosures,
> rising unemployment, plant shutdowns, market chaos, and a dwindling
> supply of natural resources like oil and water. Government planners,
> with the interests of the American public, not profits, at heart, should
> be at work providing real-time solutions to the nation’s economic
> problems. Galbraith highlights the environmental crisis we face and
> points to the direct impact of global warming and dependence on foreign
> oil on the faltering economy. 
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> Systematic planning can address the many problems we face as a nation
> – social problems such as the lack of good-paying jobs and secure
> financial futures, environmental problems like global warming and a
> rotting infrastructure, the abysmal state of our health care system, and
> the problems of racial, ethnic and sexual discrimination. Each of these
> problems has grown steadily worse during the past eight years of the
> Bush administration, which has exhibited a total lack of strategic
> planning (Iraq/Katrina/the subprime mess) and a haughty disdain for
> contemplating the needs of any sector of American society apart from the
> extremely wealthy. And for those who do not subscribe to the official
> dogma of unfettered free market capitalism, any input into the
> formulation of economic policy has been effectively blocked. 
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> Galbraith also stresses that we need a government where the voices of
> working people are heard and programs implemented that offer viable ways
> to revive the American economy. Such new approaches could be harnessed
> to end our long reliance on non-renewable fossil fuel and provide for
> massive investment in renewable energy alternatives. The direct result
> of this planning process would be to strengthen environmentally-friendly
> industries and create new jobs. Intellectual foresight and planning is
> also needed to create a universal health care system that ensures equal
> and complete access to medical care for all the American people. 
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> The money we need to revive our economy should come from rescinding the
> tax breaks to the wealthiest two percent of taxpayers, while at the same
> time providing tax cuts and stimulus packages for the rest of us. We can
> also free up more federal dollars for domestic needs by ending the war
> in Iraq, which has become an Augean stable of graft and corruption that
> is costs $10 billion a month. 
>
> Preserving the environment, preventing wars, finding ways to reduce the
> bloated military budget and creating jobs are the intellectual and moral
> challenges of the 21st century that require more than what the so-called
> experts have to offer. The task at hand also demands the direct,
> grassroots input of millions of “ordinary” Americans, who have
> first-hand knowledge of the problems we face. 
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> A new economy can only be built if it is based on hard work, democracy
> and careful planning. It can never arise out of a self-interested desire
> for the acquisition of enormous personal wealth – the hallmark of
> free-market capitalism. But planning for American’s economic future
> should not be the exclusive domain of government bureaucrats or
> university professors, a 21st century version of Plato’s philosopher
> kings. 
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> Effective planning requires the leadership and active participation of
> America’s working people. Leadership for a new economy should come
> particularly from the organized labor movement, whose leaders and
> rank-and-file members have direct experience with the problems working
> families face. These dedicated working-class leaders are ready, willing
> and able to work together with government and business to find ways to
> protect the economic interests of the essential core of democracy, the
> American people. 
>
> To engage and defeat this many-headed economic monster demands a boldly
> different, multifaceted approach. Succeeding in this Herculean task
> requires a concerted national effort and careful economic planning.
> Essential to its success is the adoption of a grassroots strategy,
> working from the bottom up, a massive effort akin to the mobilization
> sparked by the Obama campaign, relying on the input of the American
> people to tell us what our national priorities ought to be. Such an
> effort will obviously require a massive injection of federal dollars,
> rationally allocated and carefully planned. 
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> There has never been a better or more urgent time to re-evaluate the
> economic system we live in. With Barack Obama in the White House and the
> Democrats firmly in control of Congress, now is the time for us to make
> the basic changes in the economy that will put an end to the reign of
> no-fault, free-market capitalism we have suffered under for the last
> eight chaotic years – and finally put the interests of the American
> people before corporate profits. 
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> --Peter Zerner is managing editor of Political Affairs. Joel Wendland
> is editor of Political Affairs. 
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