A Voluntary Return To Sanity? Not Likely!

Election campaigns are  minefields of lies, half truths, misrepresentations, promises that will never be kept and waves of mind numbing punditry uttered by lobotomized talking heads.

One choice piece of punditry issued in the last week of Canada’s election came from the wiseacre who suggested that fretful Canadians needed to see the Toronto Stock  Exchange stabilize for a couple of days to reassure them and thus bolster the Harper conservatives dramatic bottoming out in the polls.

Such an outlandish comment can only lead to two possible conclusions: Either he was deliberately trying to play down the extent of the crisis or he was totally ignorant of just how devastating the events of the past few days were. The prime minister himself was obviously caught flat-footed when he suggested that this was a good time to buy into the market.

Our avuncular prime minister no doubt looked to the heavens and asked himself how he could be so unlucky as to have The Great Wall Street Crash of 2008 happen half-way through an election campaign that was supposed to earn him a majority. God might have answered it was punishment for breaking his promise to hold fixed term elections. But of course He does not attend to such minor parochialisms but is busily colluding in the big bailout; an event of ecumenical proportions as not only did the US kick in a trillion or so other countries kicked in big bundles of cash to shore up their national banks; all to the total sum of over two trillion dollars: An astounding thunderbolt of unanimity among nations when it comes to bailing out a bunch of crooks, incompetents and less than diligent politicians charged with protecting the rather archaic concept called the public good.

How did this all come about?  Quite simply, it goes back to the parable of the fox being left in charge of the hen house and now there is one bloody mess to be cleaned up.

The somewhat longer version is that some thirty odd years ago some billionaire American industrialists decided corporate America was not getting a fair shake and they set out to correct this grievous injustice. Capitalism as they saw it was captive to government regulation. Free enterprise had to be freed and capitalism required an endless flow of capital. For them government was the enemy.  The economy had to be deregulated, privatized, left to self-regulate and thus the free market economy was born.  To achieve this lofty goal they generously established and funded Right wing think tanks to spread the gospel. Their partners in the crime were the politicians-the legislators, - more that willing to betray the public trust, who compliantly retreated from governance leaving regulations unenforced or rescinding them as necessary and becoming courtesans to corporatism.

One of the first casualties of this neoliberal/neoconservative free market economy was the social welfare state, only to be replaced with the corporate welfare state which has now led us to wreck and ruin. Its demands on the public purse make those of the social welfare state look like chump change.

The bailouts are only fingers in the dike. The crisis will take as long to undo as it did in developing. The reality is the US economy is a basket case. The question is: How long are its citizens, its foreign creditors and the global financial community going to remain passive to this corruption, stupidity and utter incompetence on the part of both politicians and financial managers.

When the great crash of 1929 happened its devastation was limited as economies then were national but now in the age of globalization where they are highly integrated the collapse of the world’s supposedly leading economy is like an economic tsunami ripping around the globe. The bailouts are futile and there will surely be a global recession. While average Americans will bear the brunt of this recession so too will its trading partners; Canada for one as the US is our major trading partner.

As America’s political and financial leadership has utterly failed in their obligation to Americans they have also failed their allies as this financial disaster will not respect borders or take prisoners. America’s allies then become de facto stakeholders in the recovery.

The speed and utter lack of real scrutiny with which the Wall Street bailout was legislated is mute testimony to the profound cowardice of politicians and the depth of their betrayal. Like the Iraq war both US legislatures, and both presidential candidates rubber stamped the 700 billion dollars in blood money without a second thought.

George Bush lamented that it was un-American to be bailing out banks but he failed to mention that his lame administration made a major contribution to the crisis.

Barack Obama could have scored a decisive debating point against John McCain had he pointed out that had Bush succeeded in privatizing Social Security millions of US pensioners could have seen their pensions wiped out. But then Obama’s campaign has received over 10 million dollars in Wall Street donations. Obama talks reform but as yet there is no indication he is willing to confront the very powerful and unyielding status quo should he be elected.  To make any difference at all he will have to have very strong support from the Democratic Party and they are clearly part of the problem.     

A pall hangs over the candidacy of John McCain as there are concerns over the state of his health and his choice of vice-presidential running mate remains controversial.  He is yesterday’s man and clearly not up to the rigors of being a reform-crisis managing president. Barack Obama becomes the last man standing and the winner by default.

In a CounterPunch interview;

(http://www.counterpunch.org/whitney10162008.html) with Mike Whitney, University of  Massachusetts Professor of Economics, Robert Pollin states:

Whether or not this crisis will mean the end of the neoliberal era will depend on political mobilization-specifically, how successful the left will be in building coalitions behind an agenda that combines egalitarianism with a stable financial system. I would say this: If the left is unable to defeat neoliberalism now and build some version of social democracy or “leashed capitalism”, then we will never do it.

Pollin states the challenge, but it also falls on the shoulders of the Right; conservatives. This calamity was born out of corrupted liberal/conservative values.  It points the way for conservatives to get back to being conservatives in the true sense of the word. To destroy the middle class which is now happening in America is to destroy the country and politicians of every stripe should be able to grasp this essential fundamental. The crisis came about not just from an errant neoliberal philosophy but a breakdown in political discipline and regulatory structures.

Economists like Pollin now assume a critical role in the recovery as he sensibly states:

We need to create its basic principles and then some – that is, to create a regulatory system focused on financial stability and channeling credit to socially productive activities , like affordable housing, job expansion, and building a clean energy economy….

But the real issue whether it be through public or private ownership-is to move financial institutions and markets in the direction of egalitarianism. That won’t occur automatically by any means even with publicly owned financial institutions.     

Pollin’s shift towards anything resembling egalitarianism marks a momentous defeat and reversal for America’s political and financial elites. They are not going to stand down gracefully.  

Nor can America see this crisis in just national terms. Because of its hegemonic power the damage goes far beyond its borders and it can not expect allies to stand idly by and not be part of the dialogue; nor should allies allow themselves to be marginalized- as this also contributed to the crisis.

The G8 countries must now do crisis management that goes beyond posturing, photo ops and delivering soporific political homilies to their various constituents.  They must put ideology on the back burner, seek counsel with leading economists, scorn partisan think tanks, and show nimble and superior leadership.

As a matter of urgent necessity a new age of multilateralism is upon us.

Crises can birth what is new and better- rebirth or renaissance- but we cannot for a minute assume our leaders-financial and political-are going to make the necessary changes voluntarily. They are going to have to be horse whipped into doing so.