The economic crisis, political space and the political moment for left-progressives

Chris Lowe

The election of Barack Obama, the still-deepening economic crisis created by conservative deregulatory policies, and the persistent, protracted stases over war, the constitutional order, civil rights and liberties and the ecology created by Bush-Cheney-Rove and their minions have opened up new political space and possibilities. Left-progressive efforts to use that space and take up those possibilities can be seen both at the national level and locally and regionally in Oregon and the PNW. The local dimensions will be acted on in a Town Hall Meeting on the Economic Crisis today, Saturday, January 31 from 1-5 p.m. in Portland, which brings together a large coalition of forces and groups, spearheaded by Jobs with Justice and parts of the labor movement.

What fruits these efforts will bear remains to be seen. This essay tries to put them into a strategic analytical context. For that context, I want to focus on a concept of "political space," situated in this moment in time.

Back in the 1980s in South Africa, open, organized internal political resistance to apartheid re-emerged on a permanent basis, after decades of having been driven underground. It took the shape of what came to be known as the Mass Democratic Movement, centered in independent trade unions, and a wide coalition of civil society organizations. Thinkers and organizers in that often used the term "political space" in debating strategy and identifying intermediate goals in the larger long struggle.

One aspect of the concept of political space was that it provided a way to evaluate compromises. For example: should trade unions enter into a system of registration and recognition by the government, after having been entirely illegal, despite the degree of legitimacy this granted to government power and the legal system? After fierce debates, the bulk of the unions and the movement decided yes. The opportunity to exist and operate openly could be used to organize and press further. A key element of this decision was that the unions accepted recognition, but ignored other attempts to restrict them that the government sought to impose. That course was relatively easy, since the unions had been ignoring harsher restrictions and full illegality anyway.

In 1992, despite knowing the vast differences between South Africa and the U.S., I somewhat naively thought that this idea could be useful in thinking about relationships between left-progressives and Bill Clinton after he won the Democratic presidential nomination. Many had misgivings about the Clinton-Gore ticket's roots in the Democratic Leadership Council, and rhetoric of compromise with Reaganism. Even so, Reaganism had us on the defensive, divided and losing ground on so many fronts. A Clinton administration would at least reduce the onslaught and create greater political space for reorganizing.

A piece of my naiveté was that, in itself, political space is passive. Its meaning depends entirely on what one does with it. The South African debates took place within determined mass movement already organized in active, creative struggles and intent to expand their organizing. U.S. left-progressives had nothing comparable. In the event, on the whole, we settled for respite from the worst of Reaganism. Some agreed to work with Clinton mainly on his terms -- a few who worked inside the administration later resigned over welfare "reform" or other matters, in addition to those who were thrown under Bill's bus before that term came into vogue. Others stayed out and grumbled or complained about Clinton's compromises to little effect. Despite a number of efforts to organize more or less inside or outside, we never worked out the inside vs. outside dilemmas, often failed to cooperate, and in the end did not effectively take what space there was to build an active movement that could change the terms of engagement with the political system and further widen the space for progressive change.

Today we are in a political moment that in some ways is comparable to 1992, and in some ways quite different. The victory of Barack Obama and the expanded Democratic majorities in Congress have again opened up new political space. They confront us, as in 1992, with the question of what to try to do with it.

However, unlike Clinton, and despite his post-ideological if not exactly centrist rhetoric and his cautious policy positions, Obama does not present himself as providing a more tempered and temperate version of preceding conservative politics. He ran on an unambiguous platform of "change." His rejection of "partisanship" includes a rejection of Bush-Cheney-Rovism, which was of course intensely partisan.

And the rhetoric of the campaign is not all. While various critics have treated his rhetoric of change, belief and hope as essentially lacking content, if not actually a smokescreen for continuing business as usual with the usual ruling elite suspects, even for skeptics the current deteriorating economic situation makes their portents far from certain.

On the one hand, Obama's rhetorical skills have mobilized millions in raised expectations, albeit inchoate, unorganized and in all likelihood often conflicting expectations. On the other hand, the sharpness of the current economic crisis caused by conservative deregulatory philosophy and policies, coming on top of protracted weakening of the country by wars stupid, illegal or both and by persistent assaults on the constitutional order for the benefit of narrow elitist interests, demands action, and dramatic action.

The political space for progressive action opened up is thus much larger than that represented by Bill Clinton in 1992. The situation is more volatile and potentially amenable to real change for the benefit of real people, even if we were to assume the worst accusations were true about Obama's lack of sincerity about change, which they may well not be.

But, again, in itself, this political space is passive. Again, its meaning will depend entirely on what we do with it. And here again I think there is a difference from 1992, which is that left-progressives, including those who worked and worked hard to elect Obama, as well as others more skeptical of him, have a clearer understanding that they must advocate actively from the get-go for their values, aims, and the interests they seek to promote.

There also is a kind of mental wrestling going on, not only among progressives as a group, but often within individuals. Thirty years in the wilderness have created habits of cynicism and bitterness that don't meet current needs. Yet equally obviously, given the lack of cohesiveness previously described, credulity and passive reliance on Barack Obama's rhetoric makes no sense either.

At this moment, the point is not to focus on what might or might not be wrong with Barack Obama and those closest to him, or with Congress, nor yet to focus on what might or might not be good about him and them. It is too soon for either. The point is to put up a challenge and a demand that he and they lead us in certain directions and not others, in as effective a way as possible, without prejudging the response, see what happens, and respond to that.

Pushing hard for real change that can offer real hope to ordinary people facing potential disaster requires holding both optimism and skepticism in mind and heart at the same time. Giving up either will be the same as giving in completely to one or the other. Either course would be self-defeating.

Some degree of coalescing around such an approach can be seen at the national level. The centrality of the labor movement in pulling together protests and pressure against elite-oriented responses to the financial crisis, to a considerable degree overcoming organized labor's own internal divisions, has been a good sign. With respect to healthcare access reform, four organizations focused on promoting a unified national government-funded health insurance system ("single payer") have united to coordinate their efforts: Physicians for a National Health System, the California Nurses Association/National Nurses Organizing Committee, Healthcare for All, and Progressive Democrats of America. In the anti-war/peace movement, the largest coalition, United for Peace and Justice, last month held a national assembly that both embraced the spirit that drove Barack Obama's victory and insisted that the anti-war motives and desires of Obama supporters and the American public as a whole go beyond the cautious positions of his platform, tailored as it was for insider policy elites.

I believe other examples could be cited; these examples are just ones on which I happen to have focused.

Locally some of the same forces can be seen coming together, partly in connection with national organizations and partly not. For me, one straw in the wind is a local grassroots activist who was indefatigable as a MoveOn Portland Council caller for Barack Obama in the presidential campaign. She has been just as relentless in working to build up the January 31 Town Hall Meeting on the Economic Crisis. That Town Hall Meeting is a further development of work that began with a demonstration in early October outside the Federal Building downtown, opposing the no-strings-attached Bush-Paulson Wall Street bailout, as part of nationwide organizing. The October demonstration was addressed among others by AFL-CIO national organizing director Stuart Acuff, who happened to be in town, by Barbara Dudley of the Oregon Working Families Party and PSU, who gave a fiery and potent speech, and by Jo Ann Bowman of Oregon Action.

Dudley and Bowman are also on the schedule for the Town Hall Meeting, along with Tom Leedham, Secretary-Treasurer of Teamsters Local 206, who ran as a democratic reform candidate for the national Teamsters presidency several years ago, national labor journalist David Bacon, Lewis & Clark College Economics professor Marty Hart-Landsberg and PSU Sociology professor Veronica Dujon.

What's less visible is that both the October demonstration and the mobilization for today's meeting on the Economic Crisis drew on coalition work that has been developing for some time among politically activist sections of the local labor movement, the immigrant rights movement, the peace/anti-war movement and other social justice oriented groups, including many people who were activists for Obama and Jeff Merkley and others who were not. Locally in Portland and in Oregon the healthcare reform link is not as strong as it is nationally, perhaps partly because PDA in Oregon is still getting off the ground, and certainly because of the local shadows of Senator Ron Wyden's different approach nationally, former Governor Dr. John Kitzhaber's different approach locally, and the legacy of a questionably run, spectacularly failed state single-payer initiative campaign a few years ago, now possibly being misread in light of changed health policy dynamics in the labor movement.

Whether such forces in localities across the country can pull together into a cohesive or at least relatively coordinated movement to seize the moment and take advantage of the political space currently opened up by the economic crisis remains to be seen. Moreover, real change that will give real help and real hope in the near term to ordinary Americans facing personal crises, threats and fears will require a wider political spectrum than left-progressives.

Thus we need not only to pull our own socks up, but figure out how to voice the demands we believe necessary and commonsensical in ways that get others to coalesce with us. It's something we've failed at before. There are aspects of both the formal structure of government and practical distribution of power in the United States that make it difficult, along with elements of the internal political culture of the left. The new political space derives mainly from unsteadiness in practical power, which does not touch those other historic obstacles.

Yet if demands for reforms favoring the popular and working classes are not made in a powerful and organized way from the left, enough to affect the debates across the political spectrum, it is all too likely that the expectations raised by Barack Obama's election will collapse. They could end up as the politics of Peter Pan, Tinker Bell and Bob the Builder: "Faith and trust and pixie dust -- we can fly!"; "Can we fix it? Yes we can!": nice stories for children, to be sure, but not real change.

Yet again, by the same token, falling prey to cynicism about that rhetoric stripped to its most simplistic can rapidly turn into a type of self-fulfilling cop-out at which U.S. left-progressives often excel. The hunger in the public for change was real even before the depth of the economic crisis became apparent, and was not limited to Obama supporters. The crisis has made real change imperative. Cynicism is cheap, but we can't afford it, and we oughtn't indulge it, IMO. Likewise with sniping at one another. We all have to play our parts, insisting that President Obama and the Congress play the ones that should be theirs, and backing them in doing so, if and when they act not just for the benefit of those in the center and at the top, but for the broad common good.

Can we make a substantial difference and open still further space for progressive change if we try? I don't know. But I do know that we can't if we don't try.

  • Eric Sommer (unverified)

    Hi Chris, Please take a look at my article, which has been widely circulated via various newsmedia and websites 'Time for a social movement to nationalize U.S. banks. Let me add that mass resistance, including coalitions of trade union, women's, anti-poverty, and anti-forclosure groups, can and should organize to produce demonstrations, symbolic burning of 'bank cards', and if necessary mass civil disobedience to shut down bank headquarters, fanincail institutions, and wall street (Taking care not to impede ordinary retail bank operations which ordinary people depend on for daily financial needs). This is probably the only way to save the day, given the ever-greater give-aways to the finance capital.

  • Eric Sommer (unverified)

    A movement like this needs a name and I suggest something like "Mass resistance to break the power of finance capital". Eric

  • Idler (unverified)

    "Conservative deregulation policies" caused the crisis? Which ones? Gramm-Leach-Bliley,which a Democratic president declined to veto,and which in key respects made the U.S. system more like the European one?

    Let's suppose that GLB created new exposures. In the case of the financial crisis, what was that exposure to? Answer: bad mortgage debt, in which Democratic policy played a huge role. In the case of regulating the sale of subprime mortgages, the Republicans struggled to impose more regulation, not less. Democrats resisted mightily.

    There were a variety of weaknesses in the financial system some of which have more Republican fingerprints than Democrat. However, what made those vulnerabilities matter as much as they did was the bad debt that put this crisis in motion (it started as the "subprime" crisis and metastasized owing to those exposures). "Conservative policies" had nothing to do with it.

  • Bill Bodden (unverified)

    Many people who were not mesmerized by Obama's rhetoric because, in part, they knew how the system worked said before the Democratic primary and since that if Obama was to live up to his promises, real and implied, that it would take a movement of the people to do just that. Two groups invested heavily in Obama: Corporations and ordinary citizens. Given most of Obama's appointments it appears the former have mostly monopolized his attention. Now it is time for the rest of us to remind Obama of his own words about being a president of the United States - and not of Wall Street.

    The town hall meeting Chris referred to in his opening article is something that will be needed and must be repeated throughout all 50 states.

    Today's town hall meeting is wisely limited to economic problems. Clearly, after the criminal and barbaric events in Gaza and the planned increase of forces in Afghanistan there will also need to be town hall meetings dealing with foreign affairs in the near future.

  • (Show?)

    Idler, you'll notice I said "conservative," not "Republican." Also, you might notice that the column isn't particularly pro-Clinton. Many partisan Republicans hated Bill Clinton for a number of reasons. One was that they saw Clinton as stealing their thunder. Leftier Democrats (& non-Democratics on the left) often disliked him, or his policies, for much the same reason. Both saw him as "Republican lite," which they regarded as bad for different reasons.

    In that framework, the Democrats who acted as they did in the deregulation process were acting as conservatives or forwarding conservative policy or adopting conservative perspectives and expectations of results.

    Part of the point of the column is the question of whether something similar will happen again under the current political circumstances, how likely it is, and what those of us who thought the 1990s knee-jerk religious adulation of markets in both major parties was bad thinking might do to stop it happening again. Those who turned the market into a shibboleth ignored the well-established history of what markets do when insufficiently regulated -- build speculative bubbles that burst & push the economy off the rails, to mix metaphors a bit. Part of the situation is an opportunity to return to basing policy on understanding empirical history of markets' behavior -- which might or might not be returning to policies abandoned for the sake of worshiping markets.

    But if you want to give up the frequent conservative (including Republican but also Libertarian & perhaps other) claim that preference for "free markets" and concomitant dislike of regulation of markets is specifically conservative, fine. Say that the crisis was caused by conventional bipartisan group-think that grossly exaggerated the self-regulating capacity of markets. I still say that group-think developed under the influence of thinkers who styled themselves as both "pro-market" or "free market advocates" and as "conservatives," who came to great influence under a president who likewise insistently portrayed himself as a conservative and to whom almost all modern strains of American conservatism look when seeking an iconic symbol: Ronald Reagan.

    The ultimate point is that financial deregulation failed to have the consequences predicted by proponents, and is now having a number of the consequences that regulatory defenders who lost those battles did predict, at least as substantial risks that ought to be too great to take.

    As for regulating subprime mortgage debt, given Republican control of the White House for the last eight years and of Congress for a considerable part of that time, and given the propensity of "blue dog" Democrats to side with them on economic matters, I can't think their struggles were all that mighty, but suspect instead that the mortgage industry interests were able to take full advantage of the outlook behind Tom DeLay's "K Street Project."

  • LT (unverified)

    "Gramm-Leach-Bliley"---the one which broke down the wall erected in the 1930s:

    The purpose of the Glass-Steagall Act was to control speculation and prohibit a bank from owning other financial institutions which would create a conflict of interest, such as investment banks and insurance companies. The Glass-Steagall Act was enacted in 1933 after excessive risk-taking that contributed to the Great Depression <<

    Therefore, because " a Democratic president declined to veto", we are all supposed to march in lock step because party members never question the actions of one of their own, even more than a decade later?

    Derivitives and all those other fancy financial instruments so many people did not understand were good things?

    And,, Posted by: Idler | Jan 31, 2009 9:21:46 AM you've got the wrong party.

    Democrats aren't that kind of lock step partisans--at least not every registered Democrat. Whenever I see a debate between Obama or Biden and Pelosi, Reid, or any other leading Capitol Hill Democrat, I cheer. That is evidence all Democrats do not think alike.

    Republicans were not always robots either--I say that as the granddaughter of an anti-macbine Republican from the 1930s.

    There were those of us who groaned when the Glass-Steagall Act was overturned. I think it was the lowpoint of Jim Leach's career--otherwise he was a moderate, midwestern Republican.

  • Zarathustra (unverified)

    An excellent, scholarly piece, ime. One bit hit me as somewhat odd, though. It was a bit like a WWII German youth that sees a rocket for it's scientific wonders, without thinking about the regime that produced it. It has to do with the statement,

    But, again, in itself, this political space is passive. Again, its meaning will depend entirely on what we do with it.

    Our entire character has become essentially colonial. Within the colonial lived experience, all spaces are moderated by the space of death and the cultural bounds of terror. New political space may be passive, but it's genesis, it's ground, is the culturally mediated space of death and culture of terror which inscribes itself into the flesh of the colonized. The space of death is of necessity a zone of control and a controlling zone, maintaining the hegemony or cultural stability of norms and desires that facilitate the way the ruling elite rule the ruled in the land of the living.

    Deeply dependent on sense and interpretation, terror- and particularly wars on terror- nourishes itself by destroying sense. Thanks to Idler as I don't have to illustrate that statement, you can just read his post (you need to add some logic, though, to be a proper apologist)! Business is logical and, to the rationality of market logic, the culture of terror and space of death is about cost-effectiveness.

    Marx said as much talking about commodity fetishism. The fetishization of debt and debt-peonage is where the imaginative force, the ritualization and viciousness of colonial energies are always concentrated. Debt is where an entitlement mentality meets capitalism. Much of our military adventures in developing regions can be accounted for without resorting to theories about racism, that "we like to bomb brown people", as George Carlin has said. This culture of terror depends on primitivism. The revolutionary poet, however, can appeal to the magic of primitiveness to undermine it from within. Much of the current eco-development debate one may witness in these virtual pages are illustrative. Unseen forces- Adam's Smith's "invisible hand"- mediate these worlds, echoing the animism of the primitive.

    Without trying to explain why, it is simply the pattern of history, that everything in this kind of system depends on the appearance of trade, in which labor is neither slave nor wagelaborer, but a trader with an iron-clad obligation to pay back the advance. English social reforms of the Gladstone era stem from the ruling elite not wanting to deal with the semantic twists that arise from literal debt-peonage, where one must sort out what makes a man a debtor and what makes a debt a man. That an Englishman could be a living debt was held suspect as a concept only because the "economic" was highly manipulable and dependent on the "political".

    I think you're keying on the right bit, a "poet warrior in the classic sense". The revolutionary poet reappropriates the primitive and those symbols mediating the culture of terror toward a new end, and, in doing so, transforms the terms for the colonized and colonizer equally. "Apocalypse Now", anyone?

  • Harry Kershner (unverified)

    The foundation of the South African anti-Apartheid struggle was built on the call for a truth and reconciliation process that would once and for all set the record straight on crimes of state. Until we also engage in such a process, any attempts to induce "change" will be futile. The truth comes first.

    Today's America is based not just on the Reagan counter-revolution, but on a consistent, bipartisan process that preceded Reagan. For example:

    "[Jimmy] Carter, despite a few gestures toward black people and the poor, despite talk of 'human rights' abroad, remained within the historic political boundaries of the American system, protecting corporate wealth and power, maintaining a huge military machine that drained the national wealth, allying the United States with right-wing tyrannies abroad...

    "Under Carter, the United States continued to support, all over the world, regimes that engaged in imprisonment of dissenters, torture, and mass murder: in the Philippines, in Iran, in Nicaragua, and in Indonesia, where the inhabitants of East Timor were being annihilated in a campaign bordering on genocide...

    "Carter approved tax 'reforms' which benefited mainly the corporations...

    "He became an advocate of removing regulations on corporations and giving them more leeway, even if this was hurtful to labor and to consumers. Environmental regulation became more and more a victim of 'cost- benefit' analysis, in which regulations protecting the health and safety of the public became secondary to how costly this would be for business." (Howard Zinn, Carter-Reagan-Bush: The Bipartisan Consensus)

    Furthermore, the Carter Doctrine, i.e., that any attempt to alter the flow of "our oil" in the Persian Gulf is "an assault on our vital interests", and can therefore be repelled by military force, has been invoked by every Republican president since 1980 to initiate war in the region.

    "[Obama] has not specifically repudiated the Carter Doctrine or its underlying premises. Rather, he has emphasized the need to preserve a robust U.S. military presence in the Persian Gulf area and to use force when necessary to protect vital American interests there..." (Michael Klare, Repudiate the Carter Doctrine)

    "President Obama was a war criminal by his third day in office when he ordered illegal cross-border drone attacks on Pakistan that murdered 20 people, including 3 children. The bombing and strafing of homes and villages in Afghanistan by US forces and America’s NATO puppets are also war crimes." (in-america-speaking-the-truth-is-a-career-ending-event)

  • Bill Bodden (unverified)

    The South African debates took place within determined mass movement already organized in active, creative struggles and intent to expand their organizing. U.S. left-progressives had nothing comparable.

    And there is still nothing comparable in this country which would seem to rule out anything in the order of a truth and reconciliation commission. How could one be organized when the vast majority of the denizens of Congress were complicit in the crimes of the Bush and continue to be to a lesser extent in the Obama White House?

    The best hope we have of achieving something similar to a truth-seeking commission would require a consortium of independent investigative journalists taking on the task.

    In the meantime, I'm looking forward to a report on today's events at the town hall meeting.

  • (Show?)


    More or less I take Zinn's points about Carter, although at the margins there were some greater complexities: elements of the Carter-era state department tried to advance human rights principles as a basis for U.S. policies. This was never uncontested and the results were at best highly contradictory. But there was enough reality to them that it threw up the Committee on the Present Danger and the migration of many Scoop Jackson hawks into the first generation of foreign-military policy "neo-conservatism" & the Republican Party (others, particularly labor movement cold warriors like Al Shanker of the AFT or AFL-CIO's president Lane Kirkland who provided a "bipartisan" fig-leaf to Reagan's Kissinger Commission on Central America). Likewise although the other cases cited are true enough and bad enough, Carter did not intervene in Nicaragua as the Sandinistas were defeating the Somocistas despite pressure to do so. And although the Church Committee's investigations into the history of C.I.A. activities preceded Carter's election, he did sign into law one of its most important fruits, the Foreign Intelligence Surveillance Act, recently gutted. The point isn't to defend Carter or the fundamental problems with bi-partisan U.S. Cold War foreign policy in the post-decolonization "third world". But the degree of contestation within the Democratic Party and Carter's own administration actually seems like a somewhat useful yardstick for thinking about what Obama & the current Congress do and don't do as things go forward. The other point about it is that if you want to go for "truth" in a South African "Truth Commission" kind of sense, you actually have to acknowledge truths that complicate broad pictures, even if there remains a clear pattern in the broad picture.

    It actually is not at all true that "The foundation of the South African anti-Apartheid struggle was built on the call for a truth and reconciliation process that would once and for all set the record straight on crimes of state." One could argue I think that the TRC was part of the foundation of the post-apartheid settlement in South Africa, that laid out the process by which a democratic constitution that could be regarded as legitimate by all could be created, without requiring recognition of legitimacy in the apartheid constitutions.

    But even then, "truth" did not start out as a primary aim for the liberation movement (and indeed not all elements of the liberation movement accepted the TRC process). Rather, the TRC reflected the fact that the liberation movement did not win its struggle outright, but achieved a negotiated settlement, which required some terms on which the former rulers and those who did their bidding could continue to live in freedom and citizenship despite the crimes of apartheid, and at least a degree of recognition that the liberation movements committed some crimes of their own in their struggles. In terms of reaching a political settlement, the TRC process was first and foremost an amnesty process. The ANC and other anti-apartheid parties could not avoid granting amnesties. They were able to make them dependent on revelations of truth that had direct benefits to numbers of victims of crimes or their families, and some political benefits as well. The TRC process fell somewhere between the fate of defeated Confederate leaders after the U.S. Civil War, who lost much of their citizenship, and the kinds of amnesties that Pinochet in Chile, and the generals in Argentina (though less successfully in the long run) were able to insist upon for themselves.

    In the U.S., we simply have no force sufficiently strong to demand successfully that our criminals even be required to seek amnesty in return for truth. Another facet of Bill B.'s point, I suppose. Nor I suspect would it be easy to find figures inside the country with the moral authority Archbishop Tutu and some of the other TRC members were able to bring that gave it sufficient gravitas and engendered sufficient trust among enough people for it to work, more or less. I'm not sure if a TRC kind of process could work if the commission were composed of people from other countries, however.

    In a way the Church Committee in its day may have functioned as a sort of TRC kind of thing, up to a point. But its work has largely been put paid now. And it was only made possible by the combination of Watergate and defeat in Viet Nam.

    Perhaps if other things get bad enough and things come crashing down comparable possibilities would emerge. Not sure that game would be worth the candle for looking into truth, but if it comes anyway, perhaps looking would be some consolation.

    One other recent example of the limits: the non-apology defensively self-serving mischaracterizations by the mass media of the source and nature of their errors in helping whip up war hysteria against Iraq in 2002 & 2003.

  • (Show?)

    Oops, I meant re labor cold warriors to say "stayed in the Democratic Party."

  • (Show?)

    Zarathustra, I was treating political space in a narrower sense intentionally, which I suppose is the point of your critique. However, while thinking there may still be some use to doing so at least heuristically for some ends, I will readily acknowledge the salience of the issues you raise and thank you for the opportunity to think about how you've posed them.

    One interesting corner of this that came up repeatedly in both public presentations and private discussions at the meeting this afternoon was the political problem of making broad reform demands inclusive of immigrants regardless of their legal status. The participants I think were ovewhelmingly in favor of doing so. Conceivably there were views that went unvoiced, though on the whole it didn't seem like a crowd unwilling to voice dissent. Those who argued for the position situated it exactly in neo-colonial relations and dynamics of global economic neoliberalism ("the Washington consensus") as the driving force of migration and population churning. Some of those folks faced the likelihood of exclusionary moves as a wedge move that would eviscerate the aims advanced for reform, others did not. No one I heard went beyond saying there was a moral imperative for inclusion and practical reasons as well, to address how to handle those wedge politics.

  • Dav (unverified)

    We have to be careful of Obama's stimulus bill. A rise in taxes and government control could reduce our rights and freedom in that we become to dependent on the government. Let's sit back and think this over.

  • Zarathustra (unverified)

    Posted by: Eric Sommer | Jan 31, 2009 6:30:37 AM

    A movement like this needs a name and I suggest something like "Mass resistance to break the power of finance capital". Eric

    Similarly, the Manchester Guardian was calling for a return of a term used in the 1930's; "bankster", as a combination of banker and gangster. Only today I guess it would be "banksta".

    You only break the power of finance capital by not borrowing, no?

    I like to think of Harry's question in terms of "why couldn't Jimmy Carter sail through the confirmation process for SOS, like Hillary did". (Not suggesting. I don't think he would be good at SOS as he's not particularly good at following orders.)

  • Idler (unverified)


    Saying further-left Democrats are “not particularly pro-Clinton” doesn’t make the former president “conservative.” My suggestion was that GLB was not so conservative that a Democratic president would refuse to pass it. You seem more or less willing to concede the point later in your reply.

    I’m willing to entertain the idea that GLB contributed to the melt down because it created the possibility of novel exposures, through permitting novel relationships between entities in different financial sectors. You not only avoid entertaining that subprime played a critical role, you steer clear of it all together. Could it be that you have never made any serious analysis of what really caused the financial crisis and just jumped at the explanation that flattered your prejudices? Group-think indeed.

    Your ultimate point “that financial deregulation failed to have the consequences predicted” is a post hoc ergo propter hoc argument. All this tells us is that there was financial failure after this particular bit of deregulation; it provides no causal explanation that the failure was caused by the deregulation. It seems as if you simply affirm your prejudices without a dispassionate consideration of the possible causes. That may be sufficient for rhetorical political purposes but it doesn’t serve the objective of avoiding failure in the future.

    Could the crisis have happened without GLB? I’m not sure. GLB did in fact provide some opportunities to mitigate the crisis in that entities were able to cross lines and purchase faltering banks. I am sure that it couldn’t have happened without the subprime mess, which is traceable to Democratic policy and the interference of government in markets.

    There were other contributing causes as well, such as sky-high leverage (by no means unique to the United States), mark-to-market accounting regulation, abuse of predictive modeling, and perverse incentive structures in debt trading that separated commission earners from risk owners—resulting in decisions divorced from rational consideration of the risk.

    As I said, Republicans have their fingerprints on some causes, relaxing debt leverage ratios perhaps chief among them. I’m not sure that was an especially “conservative” measure either; nor am I aware of any Democrats struggling mightily against it. We can debate whether “mightily” is the best adverb for Republicans’ call for greater regulation of Freddie and Fannie, but it’s a matter of record that the Bush administration called for greater regulatory oversight for years.

    In April 2001, the Administration’s fiscal budget for 2002 said the size of the GSEs (government supported entities) were a potential problem because “financial trouble of a large GSE could cause strong repercussions in financial markets, affecting federally insured entities and economic activity.” This was the first of many such pronouncements.

    For example, in September 2003, Treasury Secretary Johns snow testified to the House Financial Services Committee recommending “legislation to create a new federal agency to regulate and supervise the financial activities of our housing-related government sponsored enterprises” and to set appropriate minimum capital adequacy requirements.

    In February 2004, the Administration’s 2005 budget said “The Administration has determined that the safety and soundness regulators of the housing GSEs lack sufficient power and stature to meet their responsibilities and…should be replaced with a new, strengthened regulator.” In April 2005, speaking again before the House Financial Services Committee, Secretary Snow said "Events that have transpired since I testified before this Committee in 2003 reinforce concerns over the systemic risks posed by the GSEs and further highlight the need for real GSE reform to ensure that our housing finance system remains a strong and vibrant source of funding for expanding homeownership opportunities in America… Half-measures will only exacerbate the risks to our financial system."

    If these prescient observations fell on deaf ears, they weren’t Republican or conservative ones.

    I am by no means arguing for unregulated financial services, and in fact can’t even imagine such an animal. I don’t know of any deregulation effort that had any such thing in mind. They are usually efforts to preserve, restore or otherwise carve out a measure of deregulation and market freedom from a heavily regulated industry.

    There are all sorts of good reasons for regulating financial services, among which may be elements of irrationality that can create market failures. As I see it, regulation should work to prevent such failures, just as it should prevent people with esoteric knowledge from exploiting those without it. However, to the extent possible, we should preserve the freedom of markets to discover the real value of any commodity.

    The current financial crisis may reflect, in part, malignant irrational forces to which markets are subject. However, it also reflects the danger that certain kinds of regulation and other government interference have in distorting value. This is probably true, for example, with the havoc played by mark-to-market accounting requirements. It is unquestionably true of the policies that precipated the subprime crisis.

  • Bill Bodden (unverified)

    Nor I suspect would it be easy to find figures inside the country with the moral authority Archbishop Tutu and some of the other TRC members were able to bring that gave it sufficient gravitas and engendered sufficient trust among enough people for it to work, more or less.

    There are people in the United States with moral stature but they lack moral authority because the vast majority of people lack moral imperatives. There is considerable evidence to support this. A primary example can be found in many of the people Americans elect to Congress who are mostly and rightly recognized as corrupt but they continue to be re-elected on the basis of being "our crooks." If an honest person offers to run he or she will almost always be ignored on the grounds of being unelectable despite giving people a chance to say they want honest government. An opinion they decline to give voice to.

  • Harry Kershner (unverified)

    Re: "...we should preserve the freedom of markets to discover the real value of any commodity."

    This, like Idler's recent claims of anti-Israel bias in U.S. media, is not my religion. There is not now, nor was there ever a "free" market. The presumed "freedom of the market" is based on the heavily state-protected and publicly subsidized power of corporations and the financial industry, and the military empire required to advance and protect their profits. The "real value" of a commodity is far more complicated than its price at the store, including, for example, the so-called "externalized costs" like environmental damage, a cost that is not valued by the market.

  • Idler (unverified)

    Harry, I'm delighted to hear that you're opposed to protectionism. That is indeed another way of distorting markets.

    I also agree that there can be real costs that go beyond the production/consumption cycle.

    Producers also benefit from the security provided by the military and law enforcement, whether their countries have empires or not, and whether they are blood sucking robber barons in top hats or just garden variety Kulaks. That's why it's right that they pay taxes.

    Goods have basic costs which make them worthwhile to make or not. If they have sufficient value above cost, they'll be made. If costs are increased by government interference, those costs will ultimately burden consumers and will dictate whether certain products are made or are affordable to a wider group of consumers.

    You confuse me with some other guy if you think I'm against regulation. There are many good reasons for various kinds of regulation. But one has to factor the cost against the utility of the regulation.

    None of that has anything to do with the value of goods, which will be determined by the market one way or the other. Interfering with that market only creates inefficiency. It is sometimes justified, but it's always costly.

  • Zarathustra of Skaro (unverified)

    Great thread. I particularly enjoyed Bill and Harry's comments. So, are we agreeing that free trade and protectionism are largely fictional as incarnations of the abstract, but generally differ only in degrees?

    Personally, I think there's a role for both. They're the social equivalent of the cognitive choice whether to accommodate or assimilate. Intelligence is the degree to which the balance between the two efficiently deals with issues posed by the environment. Any organism that did one exclusively, would be regarded as retarded. Why not States?

  • Bill Bodden (unverified)

    THIS makes the case why the United States needs more of these town hall meetings and other forums throughout all 50 states to push for what the nation needs in economic, foreign affairs, national health, and other matters.

  • Bill Bodden (unverified)

    Another reason why this country needs a vibrant and intelligent dialog going - quickly. However, if the recent obsession with Sam Adams on this blog is representative of the national level of interest, then we are beyond hope.

  • Ron Miller (unverified)

    I would buy your argument that Bush and deregulation caused this economic crisis if it was limited to the US, but it is worldwide, and much worse in other (progressive) nations.

    More likely, a lack of regulation of new investment vehicles, and greed from borrowers and lenders, fueled the bubble.

    And some responsibility goes to a government bent on involving people in home ownership that have no business owning a home.

    <h2>This is not a Republican vs. Democrat issue.</h2>

connect with blueoregon