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Another World IS Possible.

by ManfromMiddletown Sat Oct 11th, 2008 at 05:46:02 PM EST

When written in Chinese, the word "crisis" is composed of two characters - one represents danger and one represents opportunity.
JFK-Remarks at the Convocation of the United Negro College Fund, Indianapolis, Indiana, April 12, 1959

Introduction

We live in interesting times. Times of crisis.  Yet within that crisis lies opportunity.  

In his book, Great Transformations: Economic Ideas and Institutional Change in the Twentieth Century, Mark Blyth explains to readers that times of economic crisis are in fact times of opportunity.  


Opportunity to change the economics ideas that are the blueprint for the construction of economic institutions. The destruction of the old order requires the a new order be built. The old order is destroyed by uncertainty, not risk.  

We live in uncertain times, the old economic ideas that said that pumping $700 billion into banks to recapitalize them would end the crash.  It did not.  The old ideas have thus been broken.  In an economy ordered by risk, the cost of given actions are calculable within a margin of error.  In an economy dominated by uncertainty, the result of any action is essentially unknown.  We live in an economy dominated by uncertainty, the last time this was true was during the 1970s, and resulted in the rise of neoliberalism.  The period of uncertainty during the 1930s resulted in the regulation of the economy by the national state, and the collapse of the network of international trade.

In looking to where we head now, I'd like to point to 5 hypotheses put forward by Blyth:

  1. In periods of economic crisis, ideas (not institutions) reduce uncertainty.

  2. Following uncertainty reduction, ideas make collective action and coalition building possible.

  3. In the struggle over existing institutions, ideas are weapons.

  4. Following the delegitimation of existing institutions, new ideas act as institutional blueprints.

  5. Following the delegitimation of existing institutions, ideas make institutional stability possible.  

These five simple statements say so damn much.  This is what is happening today.  We are in the midst of a process of change which will structure the way that the economy functions for the rest of all our natural lives.

They tell us a great truth.  Economic crises are both moments of great danger and great opportunity.

The Danger

The danger is that this entire process of institutional change pulls back the curtains on the mechanisms of power in capitalist societies that are rarely subject to change. Crisis necessitates change, though.

You have to be willing to accept that nationalization rather than being verboten may be the answer. You have to recognize that markets are not self-regulating, they require state intervention in order to ensure that they don't destroy the means by which societies provide for their material needs. It means accepting the proposition that the concentration of wealth is detrimental to the economic health of societies, and arguing for income redistribution as a means to attack wealth inequality in the long term.  It means recognizing that decision making rules that constitute the electorate as a function of ((individual * wealth) +(individual * wealth)) rather than individual + individual are fundamentally flawed and in contradiction to democratic principles.

This is a tall order.  I really doubt that either of the current US presidential candidates can pull it off.  Historical sequence matters, and the consequences of sequencing are drastic.

Consider the Great Depression in the United States and the 1928 election.

Al Smith vs Herbert Hoover.  The parallels are striking.  Al Smith was a "historic" candidate, the first Catholic who might become president of the United States.  Herbert Hoover was a "moderate" Republican often at odds with his own party.  Both believed that the use of popular government as a means to battle the excesses of big business was nothing less than communism.  

Smith would later become a bitter rival of FDR, supporting an attempted military coup attempt against him in the 1930s and the presidential candidacies of Republican candidates in 1936 and 1940.

Now consider a counterfactual.  What if Smith had won in 1928?  The ability of the party of the center left to move to the left evaporates.  The inability to move left within the existing party system means no Democratic New Deal, reform must occur outside of the system rather than within it.  Social liberalism must yield to one of two worlds: 1) Social Democracy, 2) Non-democratic social orders whether fascist or communist.

Social Democracy arising from outside of the system means that conservative reactionaries are able to attack policies promoted by the working class to protect themselves as communist revolution against the "natural" order.  If in opposition action by the Left is crushed following the example of the Asturian revolt of 1934 in Spain.  If in power, the presence of party originating from outside of the system leads economic elites to conservative revolution to restore the order they prefer, i.e. conservative military uprising.  Civil war. Death, destruction, etc.

All this because there was no way to make the needed change in the system, requiring a change of the system.

If Obama wins this election and is "Smith-like", the change of the system must occur, because change in the system has been excluded as a possibility.

As for the possibility of reactionary revolution in America, consider that this possibility is more plausible now than it was at any time in the 1930s.  Because in the 1930s, military power was the preserve of the state.  When the coup leaders approached Gen. Smedley Butler, he turned the tables on them.

If latter day coupsters approach Blackwater's Erik Prince, will we be so lucky?

The Opportunity

Another world is possible.  Hidden in this crisis is the chance for real change, the kind that can set the economy back to benefiting the people.  

In the end.  Either the people will control capital, or capital will control the people.  That may sound vaguely communistic, but that's not it at all.  We are not mere cogs in a machinery of history driven by impersonal economic forces.

Economics is not antecedent to politics.  Politics is antecedent to economics.  The masses may be master to the machinery of the modern economy, or they may be subject to it.

All economies require the redistribution of wealth and the subordination of the individual to social production.  The question is whether these processes will be subjected democratic control, or whether they will be a means by which economic elites control the masses.  

Polanyi was correct in his insight that markets are not self-regulating in 1944.  Central to Polanyi's understanding of the way that the world works was the idea that traditionally economies have simply been the means by which societies provide the material means of their existence.  They are not the directing force in social life.  They are embedded in a system of values that places primacy on providing the means for men to live in dignity.  

But in modern societies, the rise of market fundamentalism leads to the pursuit of profits becoming the guiding force in social life.  All things must be subordinated to the logic of the market.  Even things like healthcare, which is driven by forces fundamentally alien to the logic of the market. In time, the devaluation of all that is human through the conversion of man and nature alike into nothing more sacred than a sack of potatoes, prompts backlash.

Men and women are not object to be worked upon by economic forces.  The proponents of the ideology of market fundamentalism insist that the economics is the product of the natural, divine, order, while politics and demands for economic redistribution and the deeper demand to be treated as people not objects is regarded as profane vanity.  

Liberalism as a social order in which the belief that the market can be left to regulate itself denigrates human dignity by allowing people to be turned into the vessels of labor that may be bought and sold with no more thought than that involved in the sale of a sack of potatoes at the same time that it proclaims to be acting to be the defender of liberty.  The denigration of human dignity through the commodification of man, leads the working class to look for something that can give them meaning.

Man demands meaning is his life.  If denied that he will seek to create.  As the destruction of the old social order which provided meaning and order to the individual is undertaken, ironically in the belief that the individual is being "liberated", man is set "free" adrift in a social order in which his relation to other people is mediated by one drive, the pursuit of profit.  People become a means by which the individual seeks his own gain, they are turned into objects.

Man rebels against the drive of the market to render him a commodity by embracing any ideology which places him within a value system- in which he has value. The door to dictatorship is thus opened.

The alternative to dictatorship as a means to reinstall a social order is social democracy.  The decision by society to become the conscious master of the market, so that the market is constrained within a system of social values valuing people over profits, requires that the view that the market reflects a divine order beyond the understanding of fallen man be condemned.  

Democratic societies must make the conscious decision to become master to the market.  Change must occur.  The question is whether this occurs in the system or requires a change of the system.

In the current economic crisis this means that the market must be returned to the limited realm it was permitted following the Great Depression.  

The drive for profit in the market is a means to the end of society providing its material means of existence, not an end unto itself.

And by allowing the market to become an end unto itself, we have imperiled the means by which our society provides the material means of out existence. Quell ironie!

Now comes the time to put the market back into its cage.

Another world is possible.

Today news has emerged that the GM and Chrysler are in talks concerning a possible merger.  The total collapse of the US auto industry is looming over the American economy.  

One option is for the companies to be allowed to merge, and hope for the best.  Of course if they both fail, the likely result is that the companies will be snapped up by foreign firms.

There is another way.

The time has come for the US government to nationalize GM, Ford, and Chrysler, and use financial control to ram through the retooling towards more fuel efficient vehicles.  And it's not just autos, nationalization can an should remain an option for any company that is simply "too important to fail."

This economic crisis brings the opportunity to change the variety of capitalism that exists in the United States.... for the better.

In simple money terms, the capital cost to purchase and merge the Big Three into a competitive US owned auto firm is small.

GM has a market capitalization of $2.77 Billion.

Ford? $4.5 Billion.

Chrysler was sold to Cerebrus by Daimler for $6 billion in May 2007.  At that time GM shares were selling for $30, and Ford for around $8.  So if we assume that Chrysler is only worth 20-25% of its 2006 sale price because it has experienced a similar fall, then Chrysler is probably only worth around $1.2-$1.5 billion now.

So the outright purchase of the US auto industry would cost around $9-$10 billion.  It's true that this would also involve assuming around the risk that the companies would continue losing $40-$50 billion annually until the company can be turned around.  

Remember, however that we are in the midst of a Trillion dollar war largely being fought for oil.  With forceful administration. (Step 1. Replace top management, and limit executive compensation , including stop options and other benefits, to 10 times average pay.) With forceful administration, fuel consumption could be slashed in a matter of a view years.  Total US fleet replacement occurs on average every 7 years, which means that in 7 years the fuel efficiency of this years product should basically match that  of the fleet as a whole. 100% independence from foreign oil in less than a decade is a possibility. With plug in hybrids like the Volt, a 5 year timeframe even seems to be a possibility.

In the long term, I think that the government should maintain a 1/3rd stake in the company. With another third being allocated to labor, and the final third allowed to float in the open market.  Let creative destruction occur on a limited scale, so as to avoid total meltdown.

I think that the government can turn these companies around in the long term, and I think that a government equity stake could be used to a lot of good.  Until very recently GM issued 25 cent quarterly dividends.  Less recently the divided was 50 cents.

So let's look at the numbers for GM alone.

A 1/3rd government stake in GM would be around 187 million shares.  That would generate $187 million annually with a 25 cent dividend, $374 million if 50 cents.  And a move to focus less on allowing management to hold on to earnings under the pretense that they reinvesting them for a longer term return could raise that to a multiple.

On a large scale involving multiple companies across industrial sectors, this could become an important source of government revenue.  And if based around a dividend structure, it would be fairly stable.  

If we are going be asked to give billions of dollars to companies, shouldn't we ask for an equity stake in the companies, and a share of the profits when they come.

Conclusion

Taxation has been only but one of the methods of wealth extraction used to finance the state, historically.  

Income taxation as a means of wealth taxation raises more hackles than wealth extracted through direct ownership of the means of production.  We are staring down an economic crisis that is going to require massive government spending in order to avoid a deflationary spiral.  

The irony of the situation is that in asking for free money, Wall Street is calling for a redistribution of wealth.... from the majority that has a limited ownership stake in the market to the minority that holds the majority of market.

Although we face economic crisis, we are presented with a great opportunity.  The opportunity to democratize the market, and to install a system of capitalism that benefits the majority rather than preserving the privilege of the wealthy minority.

Imagine a world in which increases in the stock market lead to tax rebates as dividends from government ownership stakes are used to replace revenue from income taxes.

Imagine a world in economic growth leads to reductions in economic inequality, rather than perpetuating the expansion of the divide between rich and poor.

Another world is possible.

We are not objects worked upon by historical forces, we are subjects with the capacity to choose.

Display:
from the Economic Populist.

This was obviously written for a US audience, but I think that the issue is more general.  And I guess that I'm just not as good as Jerome is at going through and tweaking writing for different sides of the Atlantic.

And a treat. Listen to the song, I think that you'll share the sentiment and it's sort of relevant to the current situation.



And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Sat Oct 11th, 2008 at 05:50:17 PM EST
There is a mechanical view of society that sees failure as imperfection of design. Without getting too Mr Chancian, that green-tinged carbon skein called nature that surrounds us does not recognize failure - only death, reconstitution and renewal.

One of the arguments in favour of allowing forest fires to burn out of themselves in Finland is that a) some seeds of tree species present in the soil only germinate after the intense ground heat of a fire, and b) Soil conditions after fire favour different invasive tree species by their wind blown seeds. The forest that will grow back in half a human generation is different as a super animal from what it was before the fire.

What is happening today is more than an opportunity, it is regeneration.

You can't be me, I'm taken

by Sven Triloqvist on Sat Oct 11th, 2008 at 06:16:28 PM EST
Man demands meaning is his life.  If denied that he will seek to create.
and
Liberalism as a social order [...]denigrates human dignity by allowing people to be turned into the vessels of labor that may be bought and sold with no more thought than that involved in the sale of a sack of potatoes at the same time that it proclaims to be acting to be the defender of liberty.

That is a feature not a buck. The meaning of life should not be given by the society as a whole, but should be created or taken from a different place than the politcal power that creates the economy and with that a significant part of the living conditions. The separation of the authority, that can use violance to enforce the rules it has created - the state - and those who offer advice to meaning of life - religious groups - is a necessary condition for a truly pluralistic country.
It is a heavy, perhaps a terrible, burden for humans to be free in this decision, but your society has to become a prison or a hell, when you want to take this burden away from the people, who have found all their different meanings on their own so far.

And as those people with all their different views on the world somehow have to interact as the world has become much too small, that everybody can live on his own, and the fruits of cooperation have become so sweet, that nobody wants to miss them, people need to communicate with each other in a language, that is as free as possible of the beliefs of the individual. The words of this language are the numbers before the sign of your currency.
Yes in this language, a person is equal to a vessel of work, but would you really want to have it different? Do you want, that all, what you really are, is part of the deal, and when your way of life isn't the way of life the others want it to be, then you are out? Social democracy will subordinate the means of life under political control. But politics is just another battle for the resources to be divided, and this battle fight is about much more than just your work, no, your whole way of life is on the table. Maybe you figure your chances and take them, as you have at least a vote in the election, but the slip of paper fetishism doesn't help you, when what you want isn't the majority view.
I won't go along with social democracy, that submits too much of the essence of human being to the battleground of politics to fight the fight, just to prevent to have less valuable causes fought on the other battle ground, that we call market.

Merging some dying car makers and purchase a couple of stocks to take the divident is of course no big deal, so no problem with that. Except of course, that when the state holds large parts of the stock market of its own country, the dividend payments will be extremely pro-cyclical. The state will get much out of the stocks, when it has anyhow high income from taxes, and will get little, when there a little taxes. Maybe you take provider of electricity, trains and some anticyclice stocks, then it may work - a little bit.
Health care is as well uncritical, as there will be only extremely few people, who generally don't want to be healthy.

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers

by Martin (weiser.mensch(at)googlemail.com) on Sun Oct 12th, 2008 at 12:05:48 AM EST
Karl Polanyi was one of the great social analysts of the 20th century.  I have since May of this year been saying that the magnitude of the economic crisis that was approaching could provide the opportunity for fundamental change.  Obama is a giant question mark in this regard.  His background and training seemingly predispose him to maintaining the existing system and negotiating compromises amongst various competing power centers.  This is looking less and less viable as an option.

Paulson's $700 billion dollar fix hasn't fixed anything yet and is not likely to.  It tries to prop up the existing financial system, which is likely fatally poisoned.  Financial institutions can't trust each other.  All know what has been going on.  Injecting capital into poisoned institutions doesn't make them credible or willing to lend.  They want to hang on to any new money to cover bad bets soon coming due and all existing counterparties know or fear that they will fail anyway.  When letters of credit for export are not accepted by counterparties as a result of fear of institution risk, trade freezes.  A more radical solution is required.

The best short term solution is to create new, untainted banks with government backing. If they are required to follow conservative practices and to direct their lending to commercial credit, or commercial paper, letters of credit for trade, student loans, consumer credit and mortgages the economy could be unfrozen.  Since banks in the US typically are required to have a 3% capital reserve, $267 billion from the US Treasury to new banks would create $8.9 trillion of new loan capacity.  That is over half of last year's Gross Domestic Product and it should suffice to defrost the credit markets in the USA.

Similar actions of proportionate scale in Europe and Asia will likely be required.  Once that has been accomplished the real economy will be released from its condition of being held hostage to the financial industry world wide.  Existing banks in the USA can be taken over by the FDIC as required, with their depositors protected they can be shorn of their toxic assets, which should be left with the bank holding companies, and merged with one of the new banks or recapitalized by the government in return for preferred senior stock and provided with new top management.  Former management can look to the holding company for their golden parachutes.

Solving the credit crunch isn't rocket science.  It just requires abandoning the idea of saving existing institutions as the first and only priority.  Save the economy and the existing financial sector can be left to burn.  If derivatives don't work as intended, the individuals and institutions damaged are no longer central to the economy and can be allowed to go bankrupt.  A large portion of hedge fund investors are high net worth individuals.  They can afford the hit better than the average taxpayer.  Note that while creating new banks with federal money would be anathema to market fundamentalists, the fact that the cost of saving them would not be imposed on the taxpayer would be wildly popular.  Creation of the banks can be justified as the surest and quickest means of defrosting the credit market and thereby saving the real economy.

The next social imperative is fixing campaign finance.    Elected representatives must be freed from economic slavery to the moneyed interests.  Our representatives cannot act in the interest of the vast majority of their constituents while beholden to big contributors.  Don't try to restrict contributions by anyone.  Just provide all candidates with threshold support with more money for their campaigns than was spent in the last election out of public monies.  Even were the cost several billion dollars per election, it would be vastly cheaper than the current system is proving to be.

With elected representatives freed from control by moneyed interests and with those moneyed interests distracted by the ongoing financial calamity in the private sector financial community, attention can be turned to health care, creation of a sustainable energy and transportation infrastructure and the creation of a social democracy and social infrastructure, etc.  This could be the beginning of a new golden age in the USA.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Oct 12th, 2008 at 01:26:10 AM EST
... system, quite distinctive from most parliamentary systems (Australia's Constitution with its governing Parliamentary Body and Senate as a genuine House of Review is something of a middle ground).

George W. Bush's abuses of the greatest concentration of Presidential power, as commander in chief of the armed forces, should not distract us from how much of the fight ahead will be fought out in the Congress. Indeed, despite winning re-election, much of George Bush's legislative programme went down in flame early in his second term.

One implication is that an essential political ploy for the Obama administration is to propose what sounds from the bully pulpit as perfectly reasonable policies, which are certain to provoke Republican obstructionism, so that Republican Obstructionism is a campaign issue in 2010. A first mid-term election like 1934 will establish conditions in which much can be accomplished in the 2011-2012 Congress ... a first midterm election like 1994 will be catastrophic.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Sun Oct 12th, 2008 at 01:37:01 PM EST
The question is whether you have a leader from the Democratic party who's willing to head left like FDR did, or whether you have someone who closes off the possibility for the Democratic party to move Left.  And if the path Left within the two party system is closed off, then the only other option is from a third party rising up to the Left of the Democratic party to push the discussion to the Left.

Maybe I shouldn't be so dismissing of the possibilities for that to happen without prompting conservative backlash.  The rise of Labour from the shadow of the Liberals stands out as a model, but that was prompted by a simultaneous expansion of the franchise, and the removal of power from the House of Lords.  In short, it was the continuation of a process of change set forth from within the system.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Sun Oct 12th, 2008 at 02:34:49 PM EST
[ Parent ]
The President can almost certainly single-handedly prevent the Congress from "heading left" in Foreign Policy. The President would have much more difficulty preventing a Congress from "heading left" if it was determined to do so.

I expect that what would be required to get a House determined to "head left" would be a sufficiently well-organized movement the succeeds in primarying obstructionist Democrats. That is, of course, the other reason why 2010 is a pivotal year.

In the US political economy, it is important that there is a strong progressive-populist component to that movement, since populist sentiment that is not channeled in the direction of constructive change will otherwise certainly be channeled in a far more destructive direction.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Sun Oct 12th, 2008 at 03:52:08 PM EST
[ Parent ]
In theory, what you say is on the ball.  That's what's written on paper, but institutions are more than something written on paper.  And I think that the agenda setting power of the US President has not been given significant notice.

My concern is that we have a US President of the "Left" who promotes liberal not social democratic policy.  And that when the pot boils over, social democratic policies do come, but from a third party.  And that you have this political "revolution" where the party system collapses like happened in Italy in 1994.  But that was not a time of economic crisis, 2008 is.

As for primarying, I think that this may actually make things worse.  Because I think that a lot of this movement has been directed (in money terms) by liberal, not social democrats, and that when faced with a conflict between social democracy and liberalism, many of the new Congresspersons and Senators have adopted a social democratic path.  

And because the movement behind these primary challenges is fundamentally liberal, not social democratic, I think that the risk exists that social democrats will be the subject of challenges by liberals.

Pelosi? She's been a god damn joke, she's the uberliberal who's been at odds with social democratic tendencies from the new members.  She blocked labor from meeting with the new members at the same time as she set up a meeting for Robert Rubin.  After I created a stink about it on Daily Kos, her staff emailed me saying that there would be a later meeting with labor.

So far as I can tell, it never occurred.  

Now who's the wunderkind behind the Obama campaign?  

Rubin and his disciples.

They were successful in using the primary to make sure a liberal , not a "social democrat" was the nominee.

Do you see a theme here?


And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Sun Oct 12th, 2008 at 05:37:15 PM EST
[ Parent ]
As for primarying, I think that this may actually make things worse.  Because I think that a lot of this movement has been directed (in money terms) by liberal, not social democrats, and that when faced with a conflict between social democracy and liberalism, many of the new Congresspersons and Senators have adopted a social democratic path.

What has been happening has been in part due to the absence of an movement up to the task.

Indeed, it seems highly dubious proposition for a movement to be built in the process of trying to primary members of the millionaires club ... the focus has to be the House.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Sun Oct 12th, 2008 at 05:57:30 PM EST
[ Parent ]
It hasn't been the ability of the "movement" that I'm talking about here, it's their identity.

What I'm saying is that you have liberal bankrolling candidates who are social democrats, and then the donors act shocked when their agents don't act as liberals advancing their liberal interests.  

A point of clarification, I'm talking liberal in the economic, European, sense, here.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Sun Oct 12th, 2008 at 06:09:20 PM EST
[ Parent ]
Yes, the bankrolling of candidates by those who can write big cheques is symptomatic of the lack of a progressive movement. Trial attorneys would likely represent the largest numbers of people able to write big cheques who have distinct anti-corporatist sympathies ... other than that, most big money donors are clearly more liberal in both sense of economic liberalism and social tolerance.

And part of the conflict that you point to is intrinsic, because there are "liberals", in that double sense, who are insisting on achievement of policy objectives, for example regarding the environment and global warming, where achieving the objective is incompatible with their fundamentally liberal stance.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Sun Oct 12th, 2008 at 06:39:22 PM EST
[ Parent ]
That is why social democrats must push for campaign finance reform.  If an effective reform is enacted before the 2010 election, we could see a much strengthened progressive, social democratic component of the Democratic caucus in the House.  With someone of Kucinich's persuasion as speaker you would see a very different Democratic House.

Another significant reason to enact campaign reform is that a significant portion of the current contributors are going down in the flames of the melt down underway. Reform would obviate that problem.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Oct 12th, 2008 at 08:33:00 PM EST
[ Parent ]
... of that ... given that any progressive movement in American politics is always an ephemeral thing in the longer scheme of things, campaign finance reform would be one of the things that the movement would work to push through as a structural reform to consolidate the ability to defend whatever progress has been achieved.

The formative enterprise for a progressive movement would be taking advantage of the gross gerrymandering of Congressional Districts to elect a solid Progressive-Populist caucus and using peer-to-peer small donation networks to ambush opposing members within the Democratic majority to spook them into going along with the Progressive-Populist caucus. On the back of that, real campaign finance reform might be attainable.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Sun Oct 12th, 2008 at 08:40:51 PM EST
[ Parent ]
That may be a way to get there.  If so, 2010 would be the earliest possible date to accomplish anything.  I have my doubts that the current financial problems can be solved without directly attacking the problem, which will be strenuously resisted by the financial industry.  I don't see how incremental bail outs of the scale of $700 billion at a time are politically sustainable and I don't see how the existing bail out can succeed.  It will cost vastly more than $700 billion to blunt the effects of all of the excesses from the collapse of the bubble.  The decline in real estate values alone is wiping out over $2 trillion.  With around $50 trillion of derivative contracts coming due every month, who knows what further damage awaits?  Banks are right not to trust each other.

Were the food chain for our country contaminated from one end to the other by poisons, and people were dying in droves, adding a small portion of known good food to the supply would not solve the problem, even though that is probably what the Bush FDA would try to do.  The only certain way I can see to provide reliable credit in a relatively short time span is to create new banks operating under new rules with their capital provided by the US Treasury and taxpayer.  With a 3% reserve requirement $250 billion of the "bailout money" could capitalize new banks with a lending capability of  over $8 trillion.  These banks would be free of taint.  They would also be strenuously opposed by the financial industry.  Creating them would essentially be like releasing the real economy from being held hostage by the existing financial services industry.

The market to Bush and Paulson:

"Hands up! Your money or the economy!"

Bush and Paulson to the market:

"We're thinking, we're thinking!"

What they are thinking is that they would rather give the money to the existing financial services industry, even though there is no reason to think it will help.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Oct 12th, 2008 at 11:45:43 PM EST
[ Parent ]
when the food runs out, what would you recommend?  Join a gang?  Find the black market now, before the real shit starts?  All of this "change for the better" stuff looks good on paper (hell, Communism looked good on paper until I read that "and the state will vanish away; the people in power will give it up voluntarily"; Really? On what planet?} but I'm expecting a Mad Max world at best.

They tried to assimilate me. They failed.
by THE Twank (yatta blah blah @ blah.com) on Sun Oct 12th, 2008 at 08:02:48 PM EST
Excuse me?  

What the hell are you trying to say here?

Did you even read a damn word of the diary?

I am not arguing for communism. I am arguing that the market needs to be subject to democratic control.  I am arguing that the way out of this involves spend a lot of public money, and that money spent should benefit all.

But I suspect that you didn't take the time to read what was written before you decided to make an ignorant post, that I presume you think shows you to be clever.

Not clever.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Sun Oct 12th, 2008 at 10:25:01 PM EST
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