POLITICS APRIL 23, 2009
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My colleagues Frank Foer and Noam Scheiber have written a compelling account of the Obama administration’s approach to economic policy. And although I don’t pretend to know the president’s mind, I might agree with their summary statement that “Obama has no intention of changing the nature of capitalism.” Still, I want to make what may seem to be a paradoxical argument: that regardless of the president’s intentions, he will change American capitalism in fundamental ways--in particular, he will alter the relationship between the government and the economy. My argument rests on what he has actually proposed to do and how his proposals, if enacted, would situate his administration in the history of American economic reform.
Americans have been notoriously loath to undertake reforms that increase the role of government. That goes back partly to our Lockean liberal heritage of minimal government that marks us off from Europe with its absolutist past. The only times that Americans have permitted major changes in government’s role have been during economic crises, social upheavals, and war--that is to say, during the Civil War, the Progressive Era and World War I, the New Deal and World War II, and the Sixties (circa 1961-1974). If you look at these periods, and at the intervals between them, you find certain patterns that may help explain what is going on today.
Reform and reaction: Periods of major reform have invariably been followed by periods of reaction: the Civil War by the era of Robber Barons and Social Darwinism; the Progressive Era and World War I by the Twenties of Calvin Coolidge and Andrew Mellon; the New Deal and World War II by the Robert Taft Congresses and the Eisenhower presidency; and the Sixties by Ronald Reagan, Newt Gingrich, and George W. Bush.
The limits of reaction: In these periods of reaction, attempts were made to undo and reverse prior reforms, but the efforts always fell short, and the reforms were preserved, if in weakened form. The Robert Taft Congresses failed to eliminate collective bargaining; Eisenhower, to the distress of conservative GOPers, kept social security in place; Reagan, Gingrich, and G. W. Bush tried, but failed, to eliminate the regulatory reforms of the Sixties. In addition, during these periods of reaction, the government’s share in the gross domestic product never fell below the plateau established, except during the world wars, by the prior reform era.
Reform builds on reform: Each of the reform eras picked up on the unfinished agenda of the prior era, and in some respects, went beyond it and into uncharted waters. The New Deal nationalized the state reforms of the Progressive Era (such as unemployment compensation), but also radically expanded the sheer quantitative role of government in the economy. The Sixties expanded social security and added Medicare and Medicaid, but it also radically widened the definition of what government could do to include things like worker safety and environmental protection (which is different from Progressive Era conservation).
Now how does this apply to the Obama administration? Its relationship to the Sixties is similar to the Sixties’ relationship to the New Deal. It is reviving and expanding the regulatory state of the Sixties, particularly in the areas of the environment, consumer protection, worker safety, and financial regulation. It is attempting to make good on the promise of universal health insurance that failed in Congress in 1971. It is also committed to tax reforms and social programs that will redress post-Sixties inequality. The Obama budget, for instance, contains $100 billion in tax increases on the wealthy and tax cuts for everyone else. It would also make college more accessible to lower- and middle-income students.
But the Obama proposals also go well beyond the Sixties in certain respects. First, they pick up on an approach to industrial policy that began circulating among Democrats in the early Eighties, but has never been successfully implemented. That is, its proposals seek to change not merely the pace of production, investment, and consumption, but what is produced and consumed. Most notably, it is using the budget to shift the locus of industrial production toward “green” jobs and products. It is making dramatic changes in transportation with its intervention in the auto industry and in its funding of high-speed rail.
Of course, the Eisenhower administration invested in transportation through its massive highway program, but there is a subtle difference here. The Eisenhower administration’s intervention was largely in response to pressure from the auto, construction, and real estate and developer (suburban housing, malls) lobbies. Obama’s proposals aim to alter and reverse existing trends. They are an effort at national planning. And it doesn’t matter, incidentally, whether the administration tries to get its way through manipulating the market or through outright control of investment; what matters is that it is using its governmental power to change the American economy in basic ways.
Finally, there is the sheer size of Obama’s intervention. Obama’s stimulus program and its budget are going to lift overall government spending from the 30s to well over 40 percent of GDP. Its 2009 budget, along with other public spending, could reach 45 percent of GDP. That’s in response to a crisis, but as has happened before, the extent of government intervention is likely to remain permanent .
At the least, the Obama budgets will shift even more dramatically the balance of economic power away from the private and toward the public sector. The American relationship of state to economy will begin to look more like that of France and Sweden, whose non-crisis budgets total over 45 percent of GDP. And our politics may change accordingly--shifting public opinion on regulation, spending, and taxes well to the left. On the relationship of the state to the economy, European “conservatives” (say, Nicolas Sarkozy) are well to the left of our “moderates” and even occasionally our “liberals.” It’s hard to imagine, but the Republicans of the next decade could begin to sound like moderate Democrats today when discussing certain domestic policies.
Of course, what I have described are largely proposals rather than accomplishments. Obama has the perverse benefit of a crisis to spur reform, but not to the extent that, say, Franklin Roosevelt did. Roosevelt took office after four years of a Depression, with unemployment nearing 25 percent and with bankers, businessmen, and their Republican backers thoroughly discredited. Obama is being forced to battle bankers and corporate execs; and the Democratic leadership in Congress faces filibusters from irresponsible or deeply ignorant--take your pick--Republicans and even from some so-called centrist Democrats.
It won’t be easy for Obama to get national health insurance or to finally put the financial sector in its place. And if his opponents are victorious or if he is too timid, the United States could head in an entirely different and more unpleasant direction than it would head if he were successful. There will probably be a return to deregulation and capital gains tax cuts--but when they don’t work (and they won’t), we might be forced to venture even deeper into the dark recesses of the American right.
John B. Judis is a senior editor of The New Republic and a visiting scholar at the Carnegie Endowment for International Peace.
36 comments
Come on John. I read about Obama abandoning his campaign promise to renegociate NAFTA. Then Thomas Frank points out in his WSJ op-ed that it appears Card Check is dead on arrival in the Congress. Between the Democrats in Congress and the Democrats in the White House labor appears to have vanished into thin air. So where is the "fundamental change" in the capitalist political economy for the working class?
- george walton
April 23, 2009 at 3:02am
Right-on brother.
- Gary AndrewS
April 23, 2009 at 6:27am
I have noticed in life that common sense is not common and yet common sense and common law comes from the people, not from the government. Collectively we should know that government planning, control and intervention harm more than help. Capitalism rewards those who work hard. Socialism rewards those who don't. Free market capitalism makes it easier for more to benefit than does government intervention. Capitalism encourages us to do our best. Socialism rewards mediocrity. Do we really want to be a nation of mediocrity? The Left encourages diversity yet believes in policies that foster sameness and mediocrity. Are we as a nation too lazy or apathetic to listen and seriously consider what the end result of progressivism may be? Do we want to be a nation of mushrooms? I hope not!
- Rick
April 23, 2009 at 9:20am
Well said, Rick.
- wpc
April 23, 2009 at 10:28am
Well said, very well said. If you don't mind, I'm going to use that bit for basis of my own future arguements.
- charliehorse
April 23, 2009 at 11:37am
Finally an honest radical. I can respect this article though I loathe the position it takes. If the President and his minions would take this position publically, we would have a choice. But they are afraid to be honest and to take responsibility for their positions. And rightfully so, I think.l I'm betting that most voters would reject the authors position and analysis. I'm also betting that the President and his allies know that this approach will lead to economic disaster and will ultimately run away. After all, they are mostly self-seeking politicians who are more concerned with their own power and wealth than with the public good.
- SeekingRationalThought
April 23, 2009 at 12:11pm
I may have been too eager to praise the author's honesty. I do applaude his courage in clearly stating where he and the President want to take the economy. Upon reflection, however, I also think that he is trimming his sales a bit by referring to these policies as changing capitalism. If the government controls what is produced and consumed, we don't have a capitalistic economy. What Mr. Judis is really calling for, but is not willing to state clearly, is the end of capitalism. People may differ on whether the resulting system is better or worse than capitalism, but we must be clear that it will not be capitalism. Anything less lacks intellectual integrity, confuses the conversation and leads me to suspect that Mr. Judis understands that clarity might be deleterious to his goals. I hope I'm wrong on this last suspicion.
- SeekingRationalThought
April 23, 2009 at 12:49pm
George and Gary, The fundamental change for the working class is right where it has always been; just down the road in Worker's Paradise. J
- J Lee
April 23, 2009 at 1:21pm
“As we know… Those who care what happens to their neighbors are called Socialists… Those who don’t care what happens to their neighbors are called Sociopaths… Both are incurable… Both can be treated… with care… Jesus said, ‘Love your Neighbor…’ [Mark 12:31]… then went beyond the old scriptural codes. [Leviticus 19:18 & Hadith 1:2:12]… Jesus said, ‘Love your enemies, bless those that curse you…’ [Mathew 5:44] He didn’t say this because He was weak, but because He was wise… He understood that the first step toward true peace is to love just enough to listen… so as to understand other peoples and so gain their respect… then their trust… Jesus cared…” Gary AndrewS, Author of “No Gods Before Me”
- Gary AndrewS
April 23, 2009 at 1:36pm
My God - reading Judis and Dionne on Obama has become like reading Tiger Beat on Davy Jones...
- emcgargle
April 23, 2009 at 1:42pm
Rick has his aphorisms down, but none of it makes sense. Judis says that the US may end up looking more like Europe. And so, let's look at Europe's countries. OK, France is messed up, but that's just the nature of the French. Ignore them. Look at the rest of Europe. A continent of mushrooms? If so, count me in as a mushroom. America would perhaps lose a bit of the rags-to-riches narrative that never rang that true, but rings hollow today. As to George, whether or not Obama will be a shill for unions is beside the point. We could end up with a planned economy but weak unions. And hey, France's unions are always bringing the country to a halt over one thing or another.
- Yoshi
April 23, 2009 at 2:12pm
Sir, one expects commentary in an intellectual magazine to adhere to intellectually responsible use of terms. You use the phrase "American Capitalism" to refer to a mixed economy, not Capitalism. The changes you discuss, whether those proposed by Obomba or those advocated in the past, but not implemented, do not provide us with Capitalism. What your article smuggles into the discussion is not a change of the American economy so much as it redefines Capitalism. Whether or not that change is socialism or some other system is explored in depth by a writer who dares to define her terms before making comparisons. Though publshed in 1966, long before the author could have heard the name of our current President, today's reader finds her talking about his ideas and policies, nevertheless. This prescient article is "The New Fascism: Rule by Consensus", written by America's philosopher, Ayn Rand, and published in her book, which actually discusses what Capitalism is: Capitalism, The Unknown Ideal. Read, learn, enjoy!
- Paul Beaird
April 23, 2009 at 2:39pm
Nice sophistry if I'm intrepreting you correctly. And you are vague enough that I may be misinterpreting you. You set up a straw man and then tear it down. The choice isn't between socialist who care about their neighbors and sociopaths who don't. Its between a socialist philosophy which purports to care and those of us who are not agenda driven and therefore see the results of both socialism and capitalism. Socialism destroys lives, families and economies among other things. Good intentions may make you feel superior or like yourself a little more, but they don't erase the guilt for the the bad results of the policies you push. Get real and discuss actual results of policy and stop name calling.
- SeekingRationalThought
April 23, 2009 at 3:19pm
Rational thought, my ass. Lazy tired ass rhetoric from someone with nothing else to say? You betcha. Ah yes, the inevitable tidal wave of tedious platitudes about the banality of government versus the glories of the marketplace blah blah - do you people really think you are saying anything creative or interesting? Gee, no one has ever had those particular observations before, you're geniuses! Why bother with yet more tired, lazy natterings about socialism? Let's see you THINK: I'd like to see ANY sort of objective reflections on the catastrophic failures of our specific economy that took place under the policies that were in place the last 20 years, not platitudes, not theoretical economies on talk radio - ours in all its unique splendor and history. Let's hear exactly what you would have done to address these failures both before the explosion occured and now. What would you have done differently if you were George Bush, Henry Paulson, Barack Obama? How would you have run the economy differently at any point in the last twenty years? Why? Compare your ideas to what was actually done and defend yours. How would you have addressed the bank failures as they were happening? Can you explain why these banks failed? And how it could have been avoided? Do tell! Do you disagree with Obama's decision not to nationalize the banks? Why or why not? Does total de-regulation of capital markets work? Provide examples (hint: no. Another hint: the government has successfully regulated huge swaths of our economy for generations, it sets telecom rates, it sets interest rates, postal rates, electricity rates - which only sky rocketed when deregulated - and on and on). Should the SEC have enforced the laws they chose not to? Why or why not? Your thoughts on taking apart Glass-Steagall? Should Alan Greenspan have listened to his fed govenors five years ago when they expressed deep concern about the growing fraud in the sub-prime market? Why or why not? What do you think of both Clinton and Bush both pushing home ownership as the ideal? And if this is too tough, if Rush hasn't handed out his talking points for the day (which are always the same anyway), just try answering one of these question. And if THAT is too tough, at least say SOMEthing ANYthing original. Every time anyone says socialism, they immediately flag themselves as morons. Get up off your lazy ass duffs and say something of substance. I dare you.
- WandreyCer1
April 23, 2009 at 3:29pm
....The Eisenhower administration's intervention was largely in response to pressure from the auto, construction, and real estate and developer (suburban housing, malls) lobbies. ... Not entirely or even mostly correct. Yes, there was lobbying from the auto industry, however, Eisenhower's primary motive for the interstate highway system was related to defense needs in the context of the Cold War. Eisenhower had been impressed with the need for a interstate highway system both by his experience crossing the US in a military truck convey after World War I and by the contrast with the German Autobahn system built by Hitler during the 1930s. In fact, the legislation establishing the US Interstate System was called The National Interstate and Defense Highways Act of 1956.
- Eisenhower history buff
April 23, 2009 at 3:52pm
Jesus only asked for 10%. How much does Obama want?
- Jeff
April 23, 2009 at 4:11pm
"It won't be easy for Obama to get national health insurance or to finally put the financial sector in its place." Obama is making these gargantuan tasks vastly more difficult by refusing to increase his focus on them, instead spreading his admin's bandwidth across a multitude of low-probability, extraordinarily complex and difficult efforts. Single payer _alone_ would command most of the attention of even the most disciplined and experienced president, but Obama has already plunged into the Israeli-Arab tarbaby, taken on cap and trade, and escalated the war in Afghanistan. The reformer he most resembles is not FDR, it's guns-and-butter LBJ. Not encouraging. Time for him to FOCUS on single payer and shaping up his foolish bank rescue policy asap.
- teppy
April 23, 2009 at 5:15pm
But the money was spent by the states at 19/10 percentage. They the states decided wher to put the Interstate highways and where they went.!!!!!!!!!!!!!
- edgar jackson
April 23, 2009 at 7:12pm
WandreyCer1, I share your pain. Not really sure why you've got your panties in a bunch since my comments were responses to the article and a comment on the article. Note that the article was at a high level and note that I indicated that we need to address the facts. In fact, I think that my comments and your rant have something in common. I can't really tell what you think about the specific issues from your comment, but I do share your feeling that we need to address specifics. While I'm not sure that this is the place for it, what follows is an effort to address at least some of the issues you set out. "Rational thought, my ass. Lazy tired ass rhetoric from someone with nothing else to say? You betcha. Ah yes, the inevitable tidal wave of tedious platitudes about the banality of government versus the glories of the marketplace blah blah - do you people really think you are saying anything creative or interesting? Gee, no one has ever had those particular observations before, you're geniuses! Why bother with yet more tired, lazy natterings about socialism?" I was simply asking that we speak clearly and not try to hide behind the misuse of language and sophistry. It was a response to the article and comment. I note that you don't criticise Mr. Judis or the commentator for their failure to address your questions. Wonder why. " Let's see you THINK: I'd like to see ANY sort of objective reflections on the catastrophic failures of our specific economy that took place under the policies that were in place the last 20 years, not platitudes, not theoretical economies on talk radio - ours in all its unique splendor and history. Let's hear exactly what you would have done to address these failures both before the explosion occured and now." Again, you don't criticize Mr. Judis for his lack of addressing the issues or the commentator's confusing and vapid rant on the differences bewtween socialist and those who don't agree with them. Is it only those you disagree with that merit your contempt? If so, thats not intellectually honest. "What would you have done differently if you were George Bush, Henry Paulson, Barack Obama?" I wouldn't have forced Bank of America into a bad merger and stolen value from its shareholders. I would have probably done the TARP program, but would be very careful not to confuse politics with business (see what's happening to the auto companies). "How would you have run the economy differently at any point in the last twenty years? Why? Compare your ideas to what was actually done and defend yours." I wouldn't have forced lenders to lend money to weak credits. I wouldn't have provided the cheap money that the Fed provided. I would have regulated Fannie and Freddie and held them to their original objectives. I would not have used them to further my political career (like Frank and Dodd). I wouldn't have run up the budget deficits that Bush and Congress allowed. "How would you have addressed the bank failures as they were happening? Can you explain why these banks failed? And how it could have been avoided? Do tell!" See above. Also, I know enough about the financial system not to confuse the investment bank's with commercial banks. Investment banks were allowed a riduculous amount of leverage and that was a mistake. I would also have limited the ability of all lenders to make loans and sell them without retaining at least some exposure to the risk. "Do you disagree with Obama's decision not to nationalize the banks? Why or why not?" No. I agree with THE President on this. Government doesn't have the competence to run bank's or any other business. Our politicians don't have the integrity or the honor necessary to make rational business decsions but will use nationalized businesses to further their political careers. Finally, they politicians already have too much power. I point to the Post Office, various DMV's and Amtrak to support these points. "Does total de-regulation of capital markets work? Provide examples (hint: no. Another hint: the government has successfully regulated huge swaths of our economy for generations, it sets telecom rates, it sets interest rates, postal rates, electricity rates - which only sky rocketed when deregulated - and on and on)." This bit of your rant doesn't move the discussion forward. We haven't had total deregulation of financial markets. We have had bad regulation of financial markets. There are appropriate ways to regulate any business. All laws regulate business in some way or another. Is this one of those straw men I referred to in another post or do you simply lack knowledge of the various regulations governing the financial system? Please note that I have set out above ways that I would have regulated the system. As to your "hint," you should realize that in all these cases, wiser heads have created systems to limit the opportunity of politicians to feather their own nests through these decisions. Even so, I don't know anyone who thinks the post office is well run. Many of us don't think that the Fed did a great job setting interest rates over the past 10 0r so years. "Should the SEC have enforced the laws they chose not to? Why or why not?" Of course they should. Do you think otherwise? Again a pointless point. A more meaningful discussion is whether those laws were effective or what specific new laws are necessary. "Your thoughts on taking apart Glass-Steagall?" I don't beleive that the ending of Glass-Steagall (sp? not sure)led to this crisis. That change allowed banks and investment banks to egage in each others businesses. This crisis was caused by shoddy lending encouraged by corrupt politicians seeking to satisfy the interest groups who voted for them. Of course there are other contributors such as the rating agencies, silly and/or greedy borrowers etc. "Should Alan Greenspan have listened to his fed govenors five years ago when they expressed deep concern about the growing fraud in the sub-prime market? Why or why not" Of course I do. Fraud leads to bad credits which weaken the system. I also think that those governors could have forced the issue. The Chairman isn't god. "What do you think of both Clinton and Bush both pushing home ownership as the ideal?" You left out Congress which refuses strengthen the regulation of Freddie and Fannie. Home ownership is desireable but not at any cost. It hasn't made sense for many people to buy homes for a number of years. However, it is on thing to encourage home ownership, its something else to bastardize the system to feather your political nest. This means your Barney and Chris. At least Bush and Clinton did make some effort to improve the regulation of Fannie or Freddie. Or were you not paying attention to it back then? I was. "And if this is too tough, if Rush hasn't handed out his talking points for the day (which are always the same anyway), just try answering one of these question. And if THAT is too tough, at least say SOMEthing ANYthing original. Every time anyone says socialism, they immediately flag themselves as morons. Get up off your lazy ass duffs and say something of substance. I dare you." Here I leave Rational Thought behind and unburden myself. Petty minds say petty things. I've addressed your questions to the extent possible in this forum. You however failed to address any of them yourself choosing instead to be insulting and infintile. As I said I share your pain and am embarrased that I rose to your bait. But it feels so good. Hope you learned something.
- SeekingRationalThought
April 23, 2009 at 8:26pm
Jeff, Jesus said, "sell all you have and follow me." Obama's back-to-the-90's rate is cheap at the price.
- Gary AndrewS
April 23, 2009 at 10:40pm
"Seeking Rat. Tho." Let's get real. The only real test of any belief system is in the results of that belief system when put into practice. We’ve seen what trickle-down deregulation hath wrought. From trickle-down deregulation came the “Gramm-Leach-Bliley Act” (which gutted the “Glass-Steagall Act”, which had kept the American banking system solvent since the end of the Great Depression). From trickle-down deregulation came Phil Gramm’s “Commodities Futures Modernization Act” (which created the Enron Loophole, deregulating credit default swaps). From trickle-down deregulation came the 2003 “American Dream Downpayment Act” (which pushed banks and Fannie and Freddie to make loans to people they knew could not afford them). From trickle-down deregulation came the 2004 SEC “Rule Change” (deregulating bank-required 12:1 debt-to-capital ratios, allowing banks to risk 30 times what they held in reserve, putting the entire banking system at risk of default). The systematic dismantling of the economic safeguards that have supported the American economy since the New Deal is the result of trickle-down deregulation.
- Gary AndrewS
April 23, 2009 at 10:53pm
If"single payer" is introduced in this country we will have a two-tier medical system. The lower middle and working classes will be stuck with lousy government provided medical care a la Canada. The upper middle and upper classes will go to private clinics. If the government outlaws private clinics they will move to Mexico or India or wherever.
- bulbman1066
April 24, 2009 at 12:52am
"Capitalism rewards those who work hard. Socialism reward those who don't." > And "work will set you free"... I guess when the obstructionists keep saying those talking points everything will turn out peachy. Working hard taking on so many meaning depending on the situations. By that 0-1 logic high school custodians should be able to afford luxury apartments. Right now Americans want a government that work hard for them, don't you get it?! It's never about socialism or capitalism. It's about good governance in general. Here we are living in the 21st century with a lot more experience and knowledge (scientific knowledge) and obstructionists (NOT conservatives but just plain obstructionists) use the good old 19th century WASP ethic dogma to humiliate and degrade. It's true that people right now do not really have incentive to work, but they have a lot of incentive to screw their fellow men. You can thank for that not on socialism and not capitalism. You can thank for that on no-good, witless leaders who can't read without holding some lobbyists hands and can't walk without consulting the oracles from the radio.
- Anonymous
April 24, 2009 at 1:23am
Question for John Judis and WandreyCer1: If socialism is so wonderful, why did socialist regimes in the course of the twentieth century murder over one hundred million people in cold blood in the name of "social justice"? Why did those regimes fail to deliver on any of their promises? Consider the socialist countries that remain. North Korea, a concentration camp calling itself a nation, where millions have died of starvation. Cuba, a brutal police state where the average subject lives on less than a dollar a day. Venezuela . . . Zimbabwe . . . You get the picture. Yeah, I know you want nice socialism without the government-planned famines, the concentration camps and the mass executions. But there is no such thing as nice socialism. Socialism leads to the degradation of the human spirit and the destruction of all that civilization has achieved.
- bulbman1066
April 24, 2009 at 2:12am
Sure, there are plenty of aspects of the brave new economy that are deeply troubling. The bank rescue plan is crony capitalism disguised as Cheney-Wolfowitzian claims that apocalypse is nigh, the WMD will blow us up if we don't do something stup- er drastic, etc. But the nation definitely needs more socialism in that one area of our national life that accounts for half or more of the economic insecurity that US families face, the area where the market is failing, and can't be made to work: health insurance. This is in fact a pseudo-market which lacks any price transparency, hence any real price mechanism that, as in any properly functioning market, could transmit crucial information about supply, demand, choice, value, feature-function-benefit etc to market participants so as to enable the market to reach equilibrium and clear itself. Instead, we have allocation of health care by fiat-- not, as you would think, the fiat handed down by bureaucrats but the denial-of-coverage games played by a for-profit insurance mafia whose cherry-picking and self-serving rationing of health care have created a national nightmare. There is no functioning health care market. Broken, needs fixing. Single payer is the pro-family, pro-BUSINESS, pro-American solution. Single payer, now.
- teppy
April 24, 2009 at 9:03am
Let us hope that Obama is a great reformer, so that the bottom half of society is well cared for. So the GFC (Global Financial Crisis) reveals 6 trillion dollars has been lost, and the U.S. is responsible for two-thirds of this sum. I surmised way back in 1967 when Ronald Reagan became Governor of California with his Proposition 13, calling for smaller government, that his way would end in disaster. The facile and selfish way espoused by Reagan was taken up by the two President Bushes. It is a way that promotes individual greed by the wealthy, to the detriment of wider society. Now the whole world has been led into the financial swamp. Marx once wrote: "All the events and characters in history occur twice, the first time as tragedy, the second as farce." This was wrong: Reagan was farcical; G.W. Bush led us into tragedy
- Conrad
April 24, 2009 at 9:21am
What people learn from history is that people don't learn from history. Ray Moley, an FDR Brain Trust, noted that, "Command and control economies require a police state." Capitalism does not exist in such a state as 'animal spirits' or ambition (ambition is not greed) will be curtailed. Without 'ambition' there will be no growth. The saying goes in the Old Soviet Union, 'We pretend to work, and they pretend to pay us.'
- xqqme
April 24, 2009 at 11:32am
Thank you Rational, for finally saying something of substance - what about starting with that next time? The pontificating about socialism is, to be polite, not relevant. I stand by my contempt for anyone who uses that term to describe the present administation's attempts to clean up the mess left by his predecessors. Inflammatory hysteria like that makes people stupid and trains them to think easy answers are out there, that everything will be OK as long as the right bedtime story is told to them, the right bad guy is slain. It is more of the same toxin that almost ruined this country and I'm not going to be polite about it. Most Americans are quite ready to grow up and accept complexity in their worldview again. As far as whether or not I love socialism bulbman, the question is grade school emotionality based on nothing but sour grapes at losing and I won't dignify it with an answer. Clinton level tax rates for people making over 250K and the biggest tax cut in history for everyone else is not socialism, you might want to check what your thoughts were when Bush said "wherever anyone hurts, government needs to be there" or allowed American citizens to be kidnapped off the streets on his say so alone. Rational - you did dodge some questions with platitudes about nefarious politicians (yawn, all Democrats natch - if you can find a poltician of any party in DC who did not take money from Fannie, Freddie, do let me know. Bush was Fannie's biggest fan BTW, que the tapes), whether or not I hold Judis to the standard I hold you to (no, Judis doesn't destroy his credibility by yammering about socialism rather than engaging the real questions of governing), generalities about the post office - never saying how it should be run differently or in what way is it run poorly? I have no problem with the post office. But I'm glad you agree that SEC laws should be enforced, Greenspan royally blew it by ignoring the obvious fraud and creating two bubble economies with falsely low interest rates (you didn't say why - which is obvious, he was blinded by ideology as Rome burned around him), that Obama was right not to nationalize the banks, Glass-Steagull should never have been dismantled, that home ownership is not an ideal. I thank you. With these perfectly reasonable answers, you completely dismantled your own argument that Obama is somehow a socialist for wanting to change these mistakes. Welcome to real rationality!
- WandreyCer1
April 24, 2009 at 12:17pm
Where on earth does Judis extract the ill-informed premise that because the Obama administration wants to focus government tax credits and monies towards "green jobs" and renewable energy that we're suddenly entering into the world of the Soviet-style 'command-economy' socialism? For those who don't think the Fed. Govt. hasn't been playing industry favorites for the last 60 years regarding energy policies for oil and gas need to stop sniffing glue in the corner. The other red herring that some posters bring up is how if we allow the Fed. Gov't to provide health INSURANCE that we'll suddenly be standing in lines for the mobile clinic run by Dr. John Bureaucrat. No where have I read any of the policy statements or studies for NHC stipulating the government suddenly start running hospitals. UHC is all about providing adequate insurance coverage for those who have not, won't and don't qualify for health care insurance under the not-so-discriminatory and administratively bloated 'private health insurance' industry. Sadly, there are many that conflate social programs with Communism but only because they themselves either fail to understand the difference or willingly try to blur the differences. The government providing a basic health insurance plan or promoting sustainable energy development does not a Stalinist gulag make.
- singlespeed
April 24, 2009 at 2:05pm
The only reason I would support some form of nationalization of health care goes to the more efficient allocation of labor and entrepreneurship, i.e., people would no longer be afraid to change jobs or start businesses solely on the basis of losing health care coverage. That amount of "socialism" (note the quotes, please) could be beneficial in that respect (I still have serious concerns about the effect on innovation and quality of medical doctors). At what point do we go too far in "controlling" the economy? There are those who want the end of capitalism (some are commenters here at TNR), but when you can have multiple generations of families in England who have never worked but only lived on public money then there is a point where it goes too far. I guess all we can do is watch and see what happens in the next 4 years and then provide our opinion via vote when the time comes to declare whether we think Obama has gone too far or not gone far enough.
- reb
April 24, 2009 at 3:25pm
Some believe we are all now on the “Edge of Political Darkness”. They believe that the election of an articulate president will lead to “a little intellectual elite” that “can’t control the economy without controlling the people” [Ronald Reagan]. They fear for us all, and their words may well make some of us think this fear comes from a mistrust of intelligent people. But intelligent people have always led this country, either through intelligent presidents, or through intelligent elites manipulating dumb presidents. And a sharp intellect is like a sharp knife. Each can be used to prepare a meal for someone or to hurt someone - all depends on how these tools are used. The real problem, then, is not intelligence. Personally, I believe the real problem in this world, now as in the 1920’s, is greed. Will a dumb president allow a greedy elite to enrich themselves by conning working families? Or will an intelligent president protect the American people from the economic crises brought on by the very greedy? To me, those are the real questions. And the real answers cannot come from simply trusting in elite beliefs (like, for instance, the blind belief in trickle-down economics). The only real test of any belief system is in the results of that belief system when put into practice. We’ve seen what trickle-down deregulation hath wrought. From trickle-down deregulation came the “Gramm-Leach-Bliley Act” (which gutted the “Glass-Steagall Act”, which had kept the American banking system solvent since the end of the Great Depression). From trickle-down deregulation came Phil Gramm’s “Commodities Futures Modernization Act” (which created the Enron Loophole, deregulating credit default swaps). From trickle-down deregulation came the 2003 “American Dream Downpayment Act” (which pushed banks and Fannie and Freddie to make loans to people they knew could not afford them). From trickle-down deregulation came the 2004 SEC “Rule Change” (deregulating bank-required 12:1 debt-to-capital ratios, allowing banks to risk 30 times what they held in reserve, putting the entire banking system at risk of default). The systematic dismantling of the economic safeguards that have supported the American economy since the New Deal is the result of trickle-down deregulation. To the extent the greedy have controlled enough American voters through talk radio and attack ads, they have controlled our economy these past 8 years. Make no mistake - the very greedy are making out very well these days. While our jobs and our pension plans disappear, they’re buying up America for pennies on the dollar and selling her to China. Former CEO elites, with their hands on the government till, had hundreds of billions of tax dollars for their partners at Halliburton and Goldman-Sachs and other bastions of greed, but job cuts and broken pension promises for honest working folks. That’s the legacy of trickle-down economics. Jesus said, “Wherefore by their fruits ye shall know them.” [Matt 7:20] The fruits of the greedy elite these last 8 years have become increasingly bitter. Now comes the promise of a new, intelligent president. I believe, with this new president, we may now be stepping back from the edge of political darkness. Whether we move to safety depends upon him, and upon us. We don’t know if he will be strong enough and intelligent enough to outwit and outlast the greedy forces aligned against him. He will certainly need our support, and our prayers. If he fails to do what’s right, and caves to the forces of greed, I will be the first to vote against him, as I did his predecessor. But I will not be among those who would prejudge our new, intelligent president, because I believe as Jesus believed - the proof is in the fruit. Gary AndrewS, author of “No Gods Before Me”
- Gary AndrewS
April 24, 2009 at 9:13pm
reb, some years ago Toyota was looking to build a plant in North America. Georgia gave them tax breaks that added up to a free plant. They went to Canada. The health care cost them less.
- Gary AndrewS
April 24, 2009 at 9:32pm
"Barack Obama Is Fundamentally Remaking American Capitalism" [The New Republic] ---Really? All by himself? Begun while only 93 days in office, so far? Begun while making so many trips abroad in his first 90 days? Wow. "Must be a helluva man."
- p.
April 25, 2009 at 4:26pm
"Do we really want to be a nation of mediocrity?" ----This “socialism” cant is getting way old. We’re all John Birchers, circa 1975, Now? ----The majority of the American is libertarian in mindset and character. Libertarianism is the combination of the very worst of both: Socially liberal and fiscally conservative, in the present-day sense of these terms. . . . After 40 years of cultural revolution, and 20 years of implementing a BRUTAL form of capitalism that no Americans ever grew up under, it is now a "nation of mediocrity:" America is now a nation of Impoverished Moral Midgets.
- p.
April 25, 2009 at 4:38pm
I'm right with you, all those people with any bank account or a pension plan should be allowed to fail. With capitalism every bank and every financial house in the USA, along with all their depositors, is, and should be wiped out. Why do the people have to bail out the lazy indolent dumb ass suckers who put their money into banks, but were just too lazy to look after it.
- archie
April 29, 2009 at 11:11am
i wrote obama in january 2009 and warned him about killing the goose that laid the golden egg. the Judas/Judis sentiment toward the end of the article "finally put the financial sector in its place" appears to be rhetoric aimed toward sharpening the executioner's axe.
- max wilhite
May 3, 2009 at 5:00pm