Campaign Updates and Media Headlines 10/10/08
THE FALL OF AMERICA, INC. (by Francis Fukuyama, writing in Newsweek)
The implosion of America's most storied investment banks. The vanishing of more than a trillion dollars in stock-market wealth in a day. A $700 billion tab for U.S. taxpayers. The scale of the Wall Street crackup could scarcely be more gargantuan. Yet even as Americans ask why they're having to pay such mind-bending sums to prevent the economy from imploding, few are discussing a more intangible, yet potentially much greater cost to the United States—the damage that the financial meltdown is doing to America's "brand."
Why would anyone listen to Francis Fukuyama? The fall of the Soviet Union, he said in 1992, was The End of History, meaning that communism had lost and capitalism had won, and that was that. There would be no more experimentation with financial systems. Of course, the Soviet Union was never really communistic, but what does that matter when you’re promoting yourself with a really catchy idea that has a catchy title? So here he is, almost 20 years after the fall of the Berlin Wall, telling us that capitalism, too, will fall, unless we use propaganda to keep that from happening.
If it means the end of wild west type dealings in the world’s financial markets, then this wake-up call could be a very good thing—in the long run, of course. In the short run, however, many people will be dead. And that is because we lurch back and forth between extremes, time and time again, rather than dealing consistently with the problems inherent in free societies. If the goal were always to make policy that takes into account human frailties and the need to guard against them, and to follow strategies that maximize the benefits to the greatest number of people in the society, we might be less prone to these pendulum swings.
Unfortunately, what has happened here in the U.S. is that a few right-wing families have spent hundreds of millions of dollars over the last 40 years to build a propaganda-pushing infrastructure that has been very successful in moving the country to the right—at least nominally. That was in reaction to a decisive move to the left in the 1960s, at least in terms of social issues. If the objective were to keep us on an even keel, then the proponents of populist policy would be spending something to educate the public that right-wing policies do not provide the best outcome for the most people. But they’re not doing that. Maybe they think it’s the mainstream media’s job, but unfortunately the mainstream media has become the corporate media, and its minions push the corporate agenda.
From the book I would finish, if I could ever find a publisher:
The right wing has convinced far too many people that government is always bad and business is always good. We must have a healthy skepticism about both government and business, and to be effective in protecting our interests, government must be at least as powerful as the most powerful combination of corporations. We do not have to be cynical, just cautious—as cautious as we are in other aspects of our lives, as when an insurance salesman or a stockbroker calls and says he has a great deal for us. Right winger Grover Norquist has said he wants to reduce the size of government until it is so small he “can drown it in the bathtub.” But we can afford to reduce the power of government only as far as we reduce corporate power, or we have no protection from corporate bosses. Do we also want to drown corporations in the bathtub?
And we must balance the powers of government, as the founders intended. Right wingers have been content to grant extraordinary powers to George W. Bush, but they have not thought of the consequences. We must always remember that whatever powers we grant to someone in office that we trust, will also be available to those who come after, people we may not trust as much.
We must begin to think of government not as the solution to all our problems, and not as an institution that can never solve a problem, but as a tool we can use to solve what the majority agrees are our common problems… We must demand that our government represent all of us.
I wish we had a presidential candidate from a major party who was willing to take on this challenge. We don’t., so I’m voting for the Green candidate.—Caro
Global stocks rebound after plunge on bailout failure (AP)
Bargain-hunting helped lift the London, Paris and Hong Kong stock markets Tuesday after investors worldwide had dumped shares following the unexpected rejection of a US financial bailout package.
US stocks swing sharply in early trading (AP)
NEW YORK - Stock prices swung sharply in early trading Friday as investors again dumped stocks but also scooped up shares that have been devastated by more than a week of intense and panicked selling. The Dow Jones industrials, down nearly 700 points in the opening minutes of trading, recovered to a loss of just over 125 and then headed lower again.
Must reading now (by Paul Krugman)
I would be remiss if I didn’t link to the insta-booklet from Vox EU, Rescuing our jobs and savings. I agree completely with Baldwin and Eichengreen’s summary of what must be done — this weekend, if at all possible:
• Policy makers must move boldly to stabilise the financial system. The basic elements are:
• A quick bank recapitalisation with global coordination
• A guarantee of deposits and/or loans with global coordination
• Further, coordinated macroeconomic stimulus.
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