I'm at least as appalled by what I'm hearing about the bailout as my partners here at the Blue Voice are.
While the bailout is necessary, I'm sure the Cheney-Bush crowd will use this as one more humongous bite at the apple to practice their predator state ways, syphoning megabucks to their cronies and enhancing the power of the Executive at the expense of the Congress, the courts, the Constitution and the people. One more set of scandals to add to the truly sorry history of this bone-deep corrupt, lawless administration.
My faith in the Democratic Party right now is based not so much on what the Party is at the moment, but rather on the reality that it's the only Party working people have to exert pressure against the predatory business interests that have run things these past seven-plus years. I suppose we aren't far enough along yet that we can say things like "the working and middle classes" ("middle class" is standard, but "working class" is still a bit racy) have to use the Democratic Party to fight predatory capitalists. But we may be there soon.
I'm generally not an early-adapter on new word usages, "Christianist" being one fairly recent exception. But the failure of the private finance system does call for a new political vocabulary for Americans. Two obvious examples: The Democrats need to eliminate the term "free market" from their vocabulary, except when it's used as a cuss word. And the term "nationalization" needs to become a regular part of the vocabulary.
The Republicans, during these past two decades when the've whined like babies, WATBs to be more exact, and also screamed like banshees about the evil of "political correctness" in political speech, have actually succeeded in putting over their own twisted version of PC, in both the "political correctness" and "patriotic correctness" meanings of the abbreviation.
The business press is at least willing to toss the word nationalization out there to describe what we've been doing. Freddie Mac, Fannie Mae and AIG were nationalized. Our fool pundits who agonize over whether "lipstick on a pig" is PC for Democrats in describing the world-historic disaster of Republican economic policy tippie-toe around the obvious. I suspect that the bulk of our political class, including the kept scribes and TV yakkers that we still pretend are independent journalists, are actually not capable of grasping the magnitude of what's happening with the world financial system right now. That's why I find Chomskyian theories of history so dubious: they assume an extreme level of competence on the behalf of a ruling class, a competence that is scarcely in evidence in the world in which we live. (Did I say "ruling class"?)
European observers, working in an environment where the capitalists business leaders aren't so entirely self-destructive as ours, where the political class isn't infantilized, where the political vocabulay isn't defined by bigoted morons like Rush Limbaugh and where they actually have an independent press, at least they can sometimes see the obvious. Sandro Pozzi wrote last weeks in El País (El Congreso se moviliza para salvar a Wall Street 26.09.2008) about the pending mega-bailout planned by the Cheney-Bush administration, the one as of this writing that our "country-first" Republicans in the House just rejected, apparently hoping to bring down the entire economic system:
Si finalmente se llega a un acuerdo y se pone el plan en marcha, será la mayor intervención pública en la historia de Estados Unidos.
(If the rescue plan is finally put into place, it will be the largest public intervention [in the economy] in the history of the United States.)
Georg Hoffmann-Ostenhof writes in the 22.09.2008 Profil (Austria) - which I could link if Profil didn't have such a 1990s online setup - about "Die Schwarze Woche":
Ebenso klar ist aber auch, dass in der vergangenen "schwarzen Woche" eine Ära endguültig zu Ende ging: Es ist Schluss mit der nun fast drei Jahrzente andauernden weltweiten Dominanz des amerikanische Wirtschafsmodells, des Laissez-faire-Kapitalismus.
Wie kann weiter jenes Dogma aufrecthterhalten werden, wonach der Staat das Problem und nicht die Lösung sei und der Markt, bleibt er nur ungestört, schon das Richtige tue? Wie glaubwürdig sind diese Ideen, wenn die Hohepriester der neoliberalen Ideologie in diesen düsteren Tagen gezwungen sind, so massiv wie noch nie staatlich in die Wirtschaft zu intervenieren? Mit der Rettung der AIG, der weltweit großten Versicherung, und der Hypotheken-Giganten Freddie Mac und Fannie Mae hat die amerikanische Regierung die größten Verstaatlichungen außerhalb der kommunistischen Welt durchgezogen.
[But it's also just as clear that in the past "black week", an era has finally come to an end: It's over with the nearly three decades long dominance of the American economic model, laissez-faire capitalism.
How can anyone hold that dogma to be correct, according to which the state is the problem and not the solution and that the market, as long as it remains undisturbed, will always do the right thing? How credible are these ideas if the high priests of the neoliberal ideology in these dark days are compelled to have the state intervene in the economy more massively than ever before? With the rescue of AIG, the largest insurance company in the world, and the mortgage giants Freddie Mac and Fannie Mae, the American government has put through the largest nationalizations outside the Communist world.] [my emphasis]
Actually, he's a touch premature. The nationalizations could fall apart if the Republicans are really determined to take down the world economy in a Gotterdämmerung scenario along with their own Party. But you get the idea. Technically, Washington Mutual, the largest bank failure in American history (at least as the week begins!), was also briefly nationalized and then immediately sold at a dirt-cheap price to JP Morgan.
There's no way to predict how the current crisis will affect major economic alignments in the coming years. People make economic history just like political history. So it depends on what decisions people make.
I get the impression that most European leaders would like to get the hell out of the situation in which the United States, whose voters are willing to allow people of the caliber of Dick Cheney and Don Rumsfeld - and may Athena forbid, Sarah Palin - to run our government, dominates world finance.
Remember how the Cheney-Bush administration was so upset over the red-green coalition government in Germany that refused to go along with their merry adventure to liberate Iraq? And how they showed blatant favoritism to now-Chancellor Angela Merkel's CDU/CSU Party in the German elections? I was always amazed that the Republicans expected Merkel's government to be so much different than her predecessor Gerhard Schröder's.
What does Angie's conservative party think about the US economic approach? Funny you should ask. Because the Frankfurter Rundschau published an interview in its 27-28.09.2008 edition with the CDU/CSU Party leader in the Budetag (lower House of Parliament), Volker Kauder, on the current crisis, "Der freie Markt braucht Regulierung". The parliamentary leader of Merkel's conservative party says:
Die Union ist Anhängerin der Sozialen Marktwirtschaft. Das ist das Modell der Zukunft auch international. Der freie Markt bleibt die Grundlage. Aber er braucht Regulierung, damit nicht die Starken die Schwächeren fressen.
[The Union [CDU/CSU] supports the social market economy. That is also the model for the future internationally. The free market remains the basis. But it needs regulation, so that the stronger don't eat the weaker.]
Kauder had recently said in the Budestag that now those who had opposed additional controls ont he financial markets had been taught better. Asked by the interviewer how he meant, Kauder replied:
Den einen oder anderen aus Wirtschaft und Banken, der meinte, der Markt löse alle Probleme. Vor allem aber habe ich USA und Großbritannien gemeint, die beim G-8-Gipfel die Kanzlerin und den Finanzminister belächelt haben, als sie weltweite Regelungen forderten.
[This or the other one from business and banking who thinks that the market solves all problems. Above all I meant the USA and Great Britain, who at the G-8 Summit laughed at the [German] Chancellor and the Finance Minister when they proposed worldwide regulations.]
Did I mention that he's the parliamentary leader of the German conservative Party that Bush's people like so much?
The financial crisis is hitting Europe harder and harder. That means pretty much, harder and harder by the day, just like our American banks are falling. The biggest victim so far in Germany has been Bank Hypo Real Estate (HRE). Merkel's government arranged for other German banks to provide extra capital to bail them out.
They haven't resorted to massive nationalization yet the way our "red" (Republican) government in Washington has. But spreading the risk that HRE is carrying due to those subprime-mortgage securities we've come to know so well over the last week (or at least we've heard about them a lot, I'm not sure even their creators understand them) is not necessarily a better solution. Robert von Heusing argues in Verstaatlicht alle Banken!Frankfurter Rundschau Online 29.09.2008 argues that nationalization would be better. In fact, he goes on to argue that nationalizing the entire banking sector would be a good idea. Which we could mock as European statism or something, if the conservative American government weren't frantically pushing Communist-scale nationalizations as we speak.
