My column today — well, yesterday — on Princeton Patch.
There remains in the media a love for the Clinton years that should be belied by the facts. Yes, the economy was doing far better then than it is now, but much of its greatness was based on the acceleration of a shift to a financial services economy that was impossible to sustain.
Clinton’s policies — deregulation of the financial industry, including the demolition of the commercial/investment bank wall — created a financial free-for-all that sent Wall Street on a gambling spree that first blew up the tech bubble and, when it finally popped, turned to the housing market, which went crazy and then collapsed.
The destruction of the American economy, which had been years in the making, was a bipartisan effort. But this history, as Dean Baker pointed out yesterday in a post on Clinton’s new book, seems to have been forgotten. Here is Baker’s take:
Clinton promoted both the growth of the stock bubble and the over-valuation of the dollar. The latter came about when his administration organized the “saving” of East Asia following its financial crisis in 1997. The harsh terms of the bailout required the countries of the region to run huge trade surpluses in order to meet their payments. This meant raising the value of the dollar against their own currencies.
Other developing countries wanted to avoid ever being in this situation so they too began to accumulate reserves at a huge pace after 1997 by keeping down the value of their own currencies against the dollar. This led to the huge run-up in the dollar and therefore the large trade deficit that we saw in the last decade and continue to see today.
The demand gap created by the trade deficit was filled by the housing bubble in the last decade. With the bubble now burst it can only be filled by government budget deficits until the dollar falls enough to bring trade closer to balance. Given the enormous disaster that resulted from his economic mismanagement (which could have been reversed had anyone in the Bush administration been awake), it is highly ironic that President Clinton would write a book offering economic advice to the nation.
Ironic, perhaps, but typical. War hawks, so wrong about Iraq, remain the dominant voices in the foreign policy debate, so why should we expect the mainstream media to listen to critics of the capitalist system or banish the men (and yes, it was primarily men) who tanked the economy.
I’ve mentioned this before, but it bears repeating: Congressional focus on the deficit at a time of severe economic malaise is downright foolish and dangerous.
And, as Dean Baker points out, it also is just one more example of how deformed our politics has become. The existence of a supercommittee, first, demonstrates a distortion in priorities. We need a rebirth of the commons, a sense of common good and shared sacrifice that has disappeared.
That means wrestling the economy back from the legalized criminal enterprises that control our economic lives. Corporations control our economy and our political system and they have used their power to rig things — to create, in Dylan Ratigan‘s words, “a platinum citizenship” — and protect their own prerogatives.
The supercommittee’s focus on “entitlements” — it’s not should we cut Social Security, but how much should it be cut — even as both sides avoid going after the bog boys just shows where Congress’ loyalties lie.
This essay from the Slovenian political philosopher Slavoj Žižek, which ran today in the Guardian and on Common Dreams (where I saw it), fairly sums up the failed readings of the #OccupyWallStreet protests by the traditional media and political classes.
The expectation among the power elite is that the challenge to power will coalesce into a traditional reform agenda, one that tunes up the system and makes it a bit more fair without challenging its core assumptions.
But there is something else going on here, a desire not for nominal reform but for reformation. As Žižek makes clear:
The problem is not corruption or greed, the problem is the system that pushes you to be corrupt. The solution is not “Main Street, not Wall Street”, but to change the system where Main Street cannot function without Wall Street.
The ultimate solution is not a half-measure jobs bill, like the one being pushed by President Obama — or even a much more robust, New Deal-like bill such as the one being proposed by U.S. Rep. Dennis Kucinich (which I support in the interim) — but a dismantling of our failed economic system.
Capitalism, as it now exists, commodifies everything and makes it subservient to profit. Consider health care. Rather than focus on health, our system is focused on cost; the power is held corporate health firms (insurers, drug companies, hospital chains) and all decisions are viewed through the lens of minimizing costs — even if it means denying legitimately needed care. And rather than overthrow the system, our elected representatives — who get their campaign money from the industry — opted to leave it in place with some minor tweaks.
The same dynamic holds when dealing with the financial system, the manufacturing sector, the provision of gas and electric — and the use of the commons. Visit a mall — our new main streets — or a planned community like Twin Rivers in East Windsor, where homeowner rules supersede decisionsof the general voting public.
What is important about the protests is the protesters’ sense of “the commons,” the sense that there is something that binds us all together and something that we all hold as important.
They are not communists, if communism means the system that deservedly collapsed in 1990 – and remember that communists who are still in power run today the most ruthless capitalism. The success of Chinese communist-run capitalism is an ominous sign that the marriage between capitalism and democracy is approaching a divorce. The only sense in which the protesters are communists is that they care for the commons – the commons of nature, of knowledge – which are threatened by the system.
So forget the calls from people like Bill Clinton and Barney Frank to come up with some kind of detailed plan (or in the case of Franks, the odd accusations that the protesters were somehow to blame for the failure of the political classes to do the right thing). Clinton and Frank — and Obama and most of the Democrats — have no interest in revolution. Minor changes that might ameliorate the pain of capitalism while leaving the financial classes whole are what they are after.
The protesters know that even if the politicians and pundits don’t.
It’s an odd dynamic. There are far too many people who view efforts to aid those less fortunate than us as encouraging the poor to stay poor, as if anyone wants to remain in poverty when they have a chance to be self-sufficient. The dismissiveness and nastiness that we were met with by some is truly disheartening.
Thankfully, most people are generous and wan to help their neighbors. If you are one of the generous ones, stop by the ShopRite on Route 130 in East Windsor before 7 tonight or between 10 a.m. and 7 p.m. tomorrow and make a contribution. The people at Rise and those they help will be grateful.
