Are We On Board a Ship of State called the Titanic?

The utter chaos of Congressional leadership in dealing with the current financial crisis (which parallels so much of what happened in 1929), along with the failure of clear Presidential leadership, seems to have placed us all on a ship of state called the Titanic. Under the direction of House Republicans, who appear to have taken control of the ship in Washington (without any knowledge of how to steer it), we now seem to be heading full steam ahead into the iceberg named Free Market Fundamentalism.

From The Great Crisis of 2008:

Politicians and talking heads in the corporate media repeatedly refer to the current crisis as the "greatest crisis since the Great Depression." This puts the cart before the horse, and confuses both history and understanding of the current crisis.

Before there was a Great Depression, there was the great financial crisis and crash of 1929, which delivered us into the Great Depression. The Great Depression was not a financial crisis. The Great Depression was the economic fallout that resulted from the failed efforts at dealing with the financial crisis that precipitated the great crash of 1929 and the continuing economic turmoil of the years that followed, which lasted until 1933 when Roosevelt replaced Hoover as President and overthrew the destructive ideology of free market fundamentalism with a more rational approach to economics and government action.

For most of his administration, Bush and his Republican party have channeled many of the failed economic policies of the Coolidge administration. Now Bush seems to be channeling Hoover by accepting the need for some kind of government intervention while failing to provide any clear and forceful leadership to his own obstructionist Party, which remains stuck in the ignorant policies of the Coolidge era and the totalizing ideology of free market fundamentalism.

In the absence of failed presidential leadership, Republican Senator Shelby and the House Republicans (now possibly aided and abetted by John McCain) are championing the very ideology of do-nothing free market fundamentalism that led us into this current crisis. And by doing so, they are leading us full steam ahead, like the Titanic, into the iceberg of a repetition of the very mistakes of inaction that drove the United States into the Great Crash of 1929.

So instead of simply repeating ad nauseum the stupid and misleading mantra that we are in the worst financial crisis since the Great Depression, the media and bloggers need to be discussing these historical lessons and educating the public and our politicians (and especially the House Republicans) about the errors of economic understanding and failures of governmental policy that delivered the US and the world into the crash of 1929 and the Great Depression that followed from this financial collapse.

No matter how much economists have emphasized that we cannot fall into such a crash today because economists understand how to avoid making the same mistakes, the best and brightest of economists cannot prevent the politics of fear and ignorance from taking charge of events in Washington in ways that prevent those who understand the historical causes of the 1929 crash and the Great Depression from acting. After all, hasn't most of the Bush administration been about rejecting all evidence of good science and historical understanding in order to obstruct governmental action on climate change and other pressing problems in favor of Republican ideology and governmental inaction?! This current crisis therefore seems to be the perfect culmination of where Bush administration policies have been leading us for the last eight years.

However smart Bernanke and Paulson may be, they cannot prevent the nation, guided by ignorance and fear, from rejecting all historical wisdom and repeating the tragic errors of the past, including those of 1929. This repetition is what now seems to be happening as the rescue plan of Paulson/Bush is being stabbed to death by House Republicans who believe that the "free market" should be allowed to magically solve the problem by itself.

But it was precisely a religious belief in the free market and doing nothing that allowed the financial crisis of 1929 to turn into the Great Crash of October and November 1929, and the Great Depression that followed.

Thus we now appear to be on a ship of state called the Titanic, without any coherent Congressional or presidential leadership, heading full steam into an iceberg called free market fundamentalism, which will most surely sink us all if it is not forcefully rejected and pushed out of the way by clear leadership and rational economic policy.

With the rebellion of the House Republicans against the Paulson plan, the parallels between our current crisis and the crisis of 1929 preceding the Great Crash are increasingly chilling (and all should brush up on this history through a reading of John Kenneth Galbraith's concise and brilliant The Great Crash 1929):

1. Throughout the 1920s, the Coolidge Administration encouraged economic policies of free market fundamentalism and "irrational exuberance" that encouraged all kinds of market speculation, amazingly similar to the last eight years of the Bush administration.

As Galbraith notes, "the Coolidge bull market was a remarkable phenomenon. The ruthlessness of its liquidation was, in its own way, equally remarkable" (109).

"Confidence did not disintegrate at once.... Through September and into October [1929], although the trend of the market was generally down, good days came with the bad" (Galbraith 92).

During the weeks immediately before the Crash, there were frequent pronouncements of continued confidence in the market, such as this one by Charles E. Mitchell, a director of the Federal Reserve Bank of New York (and a leading cheerleader of free market fundamentalism), on October 15, 1929: "The markets generally are now in a healthy condition . . . values have a sound basis in the general prosperity of our country."

And on October 22, 2 days before the beginning of the market Crash on Black Thursday, Mitchell said that market conditions were "fundamentally sound," and concluded that the whole situation "would correct itself if left alone." Even after the first big market dive on Black Thursday, Mitchell continued to utter positive words that emphasized the "fundamental soundness" of the market, stating that the "fundamentals were unimpaired" (104-105). (Perhaps John McCain and the House Republicans have been channeling Charles Mitchell!)

"The singular feature of the great crash of 1929 was that the worst continued to worsen" for an entire month, until the market had lost 50% of its value by mid-November (Galbraith 108, 135).

But somehow the historical reality of the Crash that came before the Great Depression, and helped to precipitate it, seems to be getting ignored by politicians and the media. Is this because they don't want to admit openly the similarities between the days before the crash of 1929, and our current crisis? Or is it simply because they don't understand the basic facts of this history? Is fear or ignorance governing this silence about parallels between 2008 and 1929? I suspect it is a combination of both.

But whether our politicians in DC and our corporate media are ignoring these lessons out of ignorance or fear, it is clear that public lack of understanding, as it exerts influence on politicians in Washington, is now greatly aggravating the dangers of the current crisis. To help avoid the collapse of the financial system that will surely come if free market fundamentalism is allowed to interfere with clear action, the best thing we can all do is to educate each other and demand that the media and the politicians begin to discuss and understand the dangerous parallels between our current financial crisis and the crisis of 1929.

If we want to avoid repeating the mistakes of the past, we must emphasize to all the one clear lesson taught by the tragic failures of leadership in 1929: FREE MARKET FUNDAMENTALISM--the belief that the free market will solve a financial crisis if it is just allowed to do its thing--WILL LEAD US INTO THE ABYSS of economic collapse and a new great depression.

If the free market fundamentalism of the House Republicans is allowed to rule the day in Washington, and prevent clear action, prepare yourselves to be standing in soup lines by next year....

And lest anyone think the tragic consequences of free market fundamentalism during the crisis of 1929 are not important enough to understand today, remember that it took the United States market economy 25 years to fully recover from the Crash of 1929. Although the new policies of the Roosevelt administration and eventually World War II helped to lift the United States out of the Great Depression, it was not until 1954 that the Dow Jones recovered the level it had reached before the crash of 1929.

(And in light of Warren Buffett's recent investment in Goldman Sachs, I should note that Chapter 3 of Galbraith's book is titled "In Goldman, Sachs We Trust." Let us all hope Warren Buffett's attempt to shore up Goldman Sachs on Wednesday was not part of a repetition of the history of the past. At least we know that Buffett is NOT a free market fundamentalist, and even supports higher rates of taxation for the wealthy.)

Addendum

Galbraith (177-186) provides an excellent summary of the five characteristics of the "fundamentally unsound" economy of 1929 that made the Great Crash possible:

1. The bad distribution of income.

2. The bad corporate structure.

3. The bad banking structure.

4. The dubious state of the foreign balance.

5. The poor state of economic intelligence.

As Galbraith laconically summarizes this state of affairs, "there seems little question that in 1929 ... the economy was fundamentally unsound." And in the face of this fundamental unsoundness of the entire system, it was the "triumph of dogma over thought" that pushed this unsound system into collapse.

For a few days Bernanke and Paulson--who are at least able to think and are not controlled by dogma, and have actual expertise in economic matters--seemed to be in charge of dealing with the financial crisis. But now all the stupidities of Republican politics and ideology--which brought us to this crisis--have torpedoed the proposals of the few thinkers in the administration. And we are now once again witnessing the "triumph of dogma over thought."

This should be no surprise. The current crisis is the perfect culmination of all that the Bush administration has been leading us toward. Now the only question is: Will rationality and sanity be able to reassert itself in ways that save us from repeating the mistakes of 1929, or will the dogma of free market fundamentalism prevail, and sink us all?

Onward to the GREAT CRASH of 2008: Will Free Market Fundamentalism Defeat the Bush-Paulson Plan and Push the Market Into the Abyss?

Have the self-destructive tendencies of an unrestrained capitalist financial/political system finally pushed the system into fundamental meltdown? (Or, Is Imperial Over-reach and systemic financial corruption forcing the United States to follow the path of the Soviet Union in the 1980s?) And if so, what will emerge from the ashes?

From The Great Crisis of 2008:

We seem to be watching a Shakespearean tragedy of world-historic proportions playing itself out in this historical moment. Within this tragedy, which now seems to be catapulting us all into financial disaster and economic depression, McCain seems to have chosen to play the absurdist role of a comic actor within the larger tragic drama. But while Shakespeare's comic characters do not usually play a major role in the overarching tragic drama, McCain seems to have chosen to place himself and his sidekick Palin at the center of this emerging disaster.

We must therefore ask: Does McCain fully comprehend the role he has chosen to play? Does McCain understand that in choosing to place himself in the midst of the debate over the financial crisis in Washington, he has chosen his personal political interests over the interests of the country that he has repeatedly said he would place first?

As our nation and the world pivots on the edge of an abyss that could make the financial panic and market crash of 1929 look pale in comparison, we are being forced to witness the spectacle of John McCain's pretensions to being the savior of the nation, while he aids and abets the splinter group of House Republicans that seems determined to have us repeat the mistakes of free market ideological totalitarianism that brought us the Great Crash of 1929 and the resulting Great Depression. the religious mantra of this ideological crowd is "the free market, limited government, and financial discipline" uber alles.

Under the guise of heading to Washington to save the nation from disaster, instead of continuing his political campaign and appearing on David Letterman's show last night, McCain (in no particular rush, and after taking time to do a full round of media interviews to announce he was 'suspending' his political campaign in order to take up the role of savior of the nation) arrived in Washington today -- to do what exactly? Did McCain rush to the White House with a commitment to helping Democrats and Republicans come to a common ground of agreement on a rescue plan? Did McCain meet with Obama to discuss how they could work together to help their two parties resolve this national crisis?

No. Rather than offering substantive assistance to a contentious meeting at the White House, where McCain could have played a constructive role by helping to lasso resistant Republicans into quick agreement on a comprehensive plan for fending off the increasing danger of a complete meltdown of the capitalist market similar to that of 1929, McCain (who has admitted his lack of economic understanding) seems to have come to Washington to aid and abet the reactionary Republican rebellion of the economically ignorant and outraged against the Bush-Paulson rescue plan.

Perhaps McCain, in the face of his declining poll numbers, recognizes that he is in the most difficult of political positions--a position that would actually require him, per his own oft-repeated words, to choose "country first" over his personal self-interest, by championing a cause that would put him at odds with a Republican base that has suddenly discovered it is the victim of a class war it has long ago stopped fighting. These Republicans, as part of a bitter awakening, are finally mad as hell, and are rising up en masse against the very plutocratic rule and policies they have twice voted into the White House.

But now, as all their political chickens are coming home to roost, these Republicans and Bush Independents have suddenly realized that they may be forced to pay the tremendous financial costs of the disastrous Republican financial, economic, and war policies that they have supported for the past eight years. Rather than accepting painful responsibility for the expense of the failed policies they supported with their votes, these folks have apparently chosen to raise a national tantrum of opposition to the one plan that might possibly save them and the nation from the ultimate consequences of these failed policies: Market Crash and Economic Depression.

Ironically, it was the Bush-Paulson plan that attempted to come to grips with, and accept some responsibility for, addressing the disastrous consequences of the failed "free market, limited government" ideology. But for those still in the grip of this totalizing ideology, who believe they possess the ultimate Truth--in defiance of the reality collapsing around them, defending this ideology to the bitter end is all that matters. For these mad Republicans, the hard truths of history learned through the experience of the 1929 Crash and the Great Depression, are of no value. And now the entire nation and world may be forced to bear the crushing costs of the ultimate failure of this ideology.

We can perhaps understand the anger and frustration of working and middle class Republicans who have suddenly realized they've been betrayed and sold down the river by a Party they believed to represent their interests. Perhaps McCain has realized all too clearly that if he chooses to work with Obama and the Democrats to champion a quick constructive deal, he will place himself at odds with the swelling Republican groundswell of people who have finally recognized that Republican plutocratic policy has sold them down the river for profit? And now this mad public is demanding its pound of flesh, and is seeking revenge on the capitalists of Wall Street who betrayed them, even if this means bringing on the next Great Depression.

And many of these very same Republicans apparently continue to hope that the Republican Party--in the person of the wealthy McCain (with at least seven houses and 13 cars)--will somehow magically change the color of its stripes, and transform itself into a party of the common working people.

While the war in Iraq and the failures after Katrina were not enough to reveal the dangers of reliance on Republican ideology and politics, apparently this financial crisis has finally been enough to raise the long-suppressed class war within the Republican Party to the surface. But unfortunately the price of this twisted discovery of class war and rejectionism in the midst of the greatest financial crisis since the days of the Crash of 1929, may well be . . . the Great Crash of 2008, and a twenty-first century Great Depression.

But in the end it can hardly be surprising that our country would be brought to the brink of financial and economic collapse at the very end of an Administration that has done everything possible to undermine the financial and political stability of the nation. Is it any great surprise that the past eight years of misguided economic policies, systematic doublethink, governmental corruption, and war and terrorism-obsessed politics that have characterized the Bush administration, have brought us to the edge of this abyss?

There seems to be some kind of ironic world-historic justice working behind the scenes to direct this tragicomic drama. Onn Wednesday night we watched a President who shamelessly took us into a major and unending war on the basis of distortions and lies, and who is now broadly distrusted and even despised as the person who could not save the people of New Orleans or lead the nation in reconstructing the city after Katrina, stand up before the nation and beg it to trust that he could rescue the nation from a financial disaster that he had largely helped to create. And Thursday we witnessed his own Republican party spurn his appeal, and thus prove President Bush's utter powerlessness in the face of this crisis.

The pitiful irony of Bush's speech was only underlined by the fact that he could not bring himself to admit any responsibility for bringing on this crisis. Instead, he seemed to be displacing responsibility onto an abstract historical development, and onto the individuals and banks who took advantage of the kinds of cheap loans that his administration's policies had encouraged. Not only did he refuse to admit any responsibility for bringing the country to this extremity, but even more absurdly and tragically, Bush attempted to continue to defend the very principles of the anti-regulatory vision of the free market that has brought us to the edge of the complete collapse of the global financial and economic system, as if this collapse is simply some terrible accident of history having nothing to do with the failures of this ideology and the policies spawned by his Administration.

And now, the ultimate humiliation and ironic justice has been handed Bush as his own Party members have rejected his plan for solving the crisis by throwing the very free market ideology he championed back in his face. And with the seeming encouragement of John McCain, this totalitarian strain of the Republican party seems to be winning the battle in Washington, and may scuttle the entire Bush-Paulson plan.

As a result of this class war and rebellion from with the Republican Party, we are now beginning to face the increasingly real possibility that the capitalist financial and economic system will be pushed over the edge of the abyss by members of a Republican party that rejects the rescue plan of its own President, in the delusional belief that the same free market/ anti-regulatory ideology that has delivered us into this crisis will somehow magically rescue us from having to pay the consequences of this many years of failed policy

While major economists (including John K Galbraith) have argued that we should never have to suffer through the experience of another Great Depression because we have the technical knowledge and governmental institutions that allow us to intervene to prevent such a crisis.

But this assumes human beings will collectively act on and apply the economic knowledge we have when necessary to prevent such an eventuality. But if politicians reject this knowledge, in favor of free market fundamentalism, they will be choosing to go the way of the folks who brought us the Great Crash of 1929 by constantly repeating to themselves in the days before this crash: If we just allow the free market to work things out, all will be fine.

So, if you believe in the Free Market, and fresh grapes--
"Don't worry, be happy....."

And prepare for the Great Crash of 2008 by reading J.K. Galbraith's The Great Crash 1929.

Robert Reich's Wise Advice on the Current Crisis

Former Labor Secretary (under Clinton) Robert Reich has posted 3 excellent posts on his blog providing key perspective and suggestions for responding to the current crisis:

We tell poor nations they have to make their financial markets transparent before capital will flow to them. Now it's our turn. Lacking adequate regulation or oversight, our financial markets have become a snare and a delusion. Government only has two choices now: Either continue to bail them out, or regulate them in order to keep them honest. I vote for the latter.

Especially valuable right now--as our Congressional leaders rush like a flock of lemmings to embrace in fear whatever the Republican administration hands them, in a new application of the Shock Doctrine to our entire nation--are Reich's recommendations for the basic principles that should be incorporated into the coming Congressional "Bailout of All Bailout" Bills:

1. The government (i.e. taxpayers) gets an equity stake in every Wall Street financial company proportional to the amount of bad debt that company shoves onto the public. So when and if Wall Street shares rise, taxpayers are rewarded for accepting so much risk.

2. Wall Street executives and directors of Wall Street firms relinquish their current stock options and this year’s other forms of compensation, and agree to future compensation linked to a rolling five-year average of firm profitability...

3. All Wall Street executives immediately cease making campaign contributions to any candidate for public office in this election cycle or next, all Wall Street PACs be closed, and Wall Street lobbyists curtail their activities unless specifically asked for information by policymakers...

4. Wall Street firms agree to comply with new regulations over disclosure, capital requirements, conflicts of interest, and market manipulation. The regulations will emerge in ninety days from a bi-partisan working group, to be convened immediately. After all, inadequate regulation and lack of oversight got us into this mess.

5. Wall Street agrees to give bankruptcy judges the authority to modify the terms of primary mortgages, so homeowners have a fighting chance to keep their homes. Why should distressed homeowners lose their homes when Wall Streeters receive taxpayer money that helps them keep their fancy ones?

If Congress is truly interested in being responsible to their primary obligations to the American people, instead of doing (as usual) whatever is quickest and easiest so they can get out of Washington according to schedule for their long election vacation, they will avoid passing any Blank Check Mega-Bailout Bill that does not incorporate Reich's key principles.

Indeed, if the Republican administration balks at a bill that adds these provisions, then the Democratic Congress should be committed to keeping Congress in session as long as it takes-- right up to the election, if necessary--to keep this most important of all issues front and center before all the American people for discussion as people consider who they will be voting for in this election.

In this "once-in-a-century" crisis (according to Greenspan), the future of the nation and the world depends on the details of the Mega-Bailout Bill that Congress hands to the American people and the world in the coming days. So we all should not only hope but call our Congresspeople and demand that this time our Congressional representatives put the destiny of the nation and world in front of its own petty interest in getting out of Washington as quickly as possible for another long vacation, while the world's financial system collapses around us.

If Taxation is Unpatriotic (says Palin), How will the Republicans Pay for War in Iraq and Bail-Out of the Financial System?

So this week, as the financial system is on the verge of collapse because of the Republicans' anti-government, anti-regulation, anti-tax laissez-faire ideology, we have the spectacle of Republican VP nominee Sarah Palin underlining the irrationality of this Republican ideology by stating that raising taxes on the wealthy would be both unpatriotic and harmful.

According to the Republican logic of Sarah Palin, asking the wealthy to pay more taxes (as Joe Biden proposed) "is not patriotism," but is "about killing jobs and hurting small businesses and making things worse." (And McCain said the idea of asking the wealthy to pay more taxes was "dumb.") Nice for those like Palin and McCain to think such things, as the Republicans continue to uphold a policy of protecting the wealthy from taxation while the middle classes and poor are burdened with the gigantic growth of the national debt for war and financial bail-outs that the Republicans have imposed on our country.

In response to this statement by Palin and the Republicans, we need to ask: if taxation of the wealthy is now unpatriotic, how will the Republicans propose to pay the tremendous costs of fighting their wars and bailing out the financial system that they have brought to the verge of collapse on their watch? How will the Republican ticket of Palin/McCain pay the gigantic trillion-dollar bill of the bail-out of the entire financial system that their own failed policies have now forced us into?

And we would also like to ask the corporate media when they will begin to uphold their own patriotic duty by asking the Palin/McCain Republican ticket some fundamental questions about patriotism, taxation, and basic economics (since Palin has raised this issue for discussion, and the financial health of even the corporate media depends on the maintenance of an ordered national financial system):

If taxation of the wealthy is now unpatriotic, how do the Republicans propose to pay for the terribly expensive war they have gotten us into in Iraq? If taxation is unpatriotic, is paying for the war in Iraq also unpatriotic? If it is not patriotic for the wealthy to pay more taxes, is it not even more unpatriotic to be placing more of the burden of taxation on the middle and lower classes, as unprogressive and flat tax proposals do?

It seems Republicans like Palin and McCain would like to continue to avoid any responsibility for answering the question of how the nation will now pay the gigantic debt-load of the failed policies the Republicans have imposed on our country. And according to the logic of Palin, if it is unpatriotic to impose more taxes on the wealthy, guess who will end up paying these gigantic expenses under another Republican administration-- the middle class and poor (through ever higher sales taxes and flat taxes and all the forms of taxation that hit the poor and middle class the hardest while they allow the wealthy to continue to walk away with million dollar salaries for running our financial system and country into the ground!!!)

Palin/McCain would apparently love to call taxation of the wealthy unpatriotic, even while they continue to ignore the gigantic tsunami of expenses that Republican policies have imposed on the American people, so that they can continue to protect the wealthy while the middle classes and poor are burdened with the ever-growing cost of paying for failed Republican policies.

Why are the media not asking these most fundamental of questions??!!

It is precisely the media's silence and lack of critical attention to the fundamentally irrational and absurd and unsustainable approach of Republicans to taxation, regulation, and economic policy that has allowed the country to fall into this mess, and even now, as things fall apart, the corporate media continues to ignore the ways the Palin/McCain team would simply like to continue this same absurd and country-killing set of irrational policies toward national finance and taxation!

When will the corporate media begin to challenge the utterly absurd, irrational way Republican policy is fundamentally undermining the future of this country?! and the ability of the vast majority of the people of this country to live decent lives?!! When will the media begin to challenge directly the funamental lack of patriotism in Republican policies that continue to destroy the foundations that support national finance and economy?

If asking the wealthy to pay more taxes is unpatriotic, how do the Republicans propose that the country now pay for the gigantic financial bail-outs that their own laissez-faire antiregulatory stance has now foisted upon us, if we are to save the national financial system and economy from collapsing like a house of cards?

And so we ask the corporate media: If you care at all about patriotism, why aren't you asking these kinds of critical questions of the Republicans, to make clear to the American public how utterly absurd and irrational is so much of what the Republican candidates are offering to the American public, as the principles that will guide their administration of the country if they are elected?!!

At a time when the entire economy of the nation and the globe is teetering on the edge of the abyss, the U.S. media continues to be facile and stupid in the face of the destructive irrationality of ideas and policy that the Republican candidates, and sometimes the Democratic candidates as well, are dishing out to us.

ENOUGH!!! When will the individual citizens and taxpayers who are part of the corporate media rise up against the destructive stupidity of the policies that have been destroying this country? When will these people get mad enough at what the Republicans are proposing to continue to do to our country to begin to speak up and raise these fundamental questions??!!

When will the corporate media begin to critique the absurdity of the bullshit people like Palin are throwing at us, so that they can continue to protect the wealthy, and pad their own bank accounts, while middle class folks are burdened with ever greater taxation and inflationary prices--which according to people like Palin, must (by logical deduction) be just fine, since only raising taxes on the wealthy is unpatriotic....

Democratic VP nominee Biden made a clear, straight-forward and rational statement about the responsibility of all American citizens, including the wealthy, to take on a fair part of the burden of paying for the privilege of being a citizen of this country. Biden was making the point that the wealthy have not been asked by the Republicans to pay their fair share. And wealthy people like Warren Buffett would agree with this statement. Paying taxes is the way we all support our country and our government. If this is unpatriotic, what does patriotism mean?

It's time for all people to ask the Republican candidates, if they think raising taxes on the wealthy is unpatriotic, how do they propose to pay the tremendous and quickly growing costs of the tremendous failures of war and financial policy that their eight years of rule have imposed on the people of this country!!!?

When will the fourth estate of the media begin to uphold its own patriotic duty and begin to ask these basic questions of those who would have us elect them so they can continue to run the country into the ground through the same irrational policies that have guided the Bush administration?!

COMMON SENSE--FOR A TIME OF CRISIS:

Addressed to the Citizens of the United States--A People that sacrifices its liberties to achieve security is deserving of neither, and will end up losing both:

"Without Vision, the People Perish!"

*****

ON July 4, 2006, we published a new version of "Common Sense," modeled on Tom Paine's famous appeal to citizens for action during the Revolutionary Crisis of 1776.

We previously compared Bush administration policies to those of Calvin Coolidge, and predicted they would eventually lead our country to an economic crisis similar to that which occurred at the end of the 1920s. But in doing so, we did not assume the parallels would necessarily be as dramatic as they have become over the last several weeks.

Now, more than ever, and especially in light of the lack of vision being exhibited by our current political leaders and presidential candidates, there is great need for the kind of Common Sense vision that has inspired the common citizens of this country throughout its history to rise up to demand from their elected leaders and government actions and policies worthy of the Declaration of Independence that founded this country as one where ALL people should have the right to "life, liberty, and the pursuit of happiness."

So, we publish again here the first part of this Common Sense call to ACTION, and refer readers to the full blog here.

*****

Common Sense--For a Time of Crisis:

Addressed to the Citizens of the United States: A People that sacrifices its liberties to achieve security is deserving of neither, and will end up losing both--"Without Vision, the People Perish!"

*****

[Our economic and political rulers] have failed through their own stubborness and their own incompetence, have admitted their failure, and have abdicated [their responsibility] ... They have no vision, and when there is no vision the people perish. ... They have shown no realization that what they call free enterprise means anything but greed.

*****

We may well ask, are we in danger of a new caveman's club, of a new feudal system, of the creation of such a highly centralized industrial control that we may have to bring forth a new Declaration of Independence? (July 4, 1929)

*****

We are now providing a drab living for our own people ... If the process of concentration goes on at the same rate, at the end of another century we shall have all American industry controlled by a dozen corporations, and run by perhaps a hundred men ... We are steering a steady course toward economic oligarchy, if we are not there already. (1932)

This election is not a mere shift from the ins to the outs. It means deciding the direction our Nation will take over a century to come.

*****

Our task now is not discovery or exploitation of natural resources, or necessarily producing more goods ... [Our task] is ... distributing wealth and products more equitably, of adapting existing economic organization to the service of the people.

This Nation asks for action, and action now ... We must act and act quickly ... We must move as a trained and loyal army willing to sacrifice for the good of a common discipline.

*****

The only thing we have to fear is fear itself--nameless, unreasoning, unjustified terror which paralyzes needed efforts.... (All the above quotes are the words of Franklin Delano Roosevelt, as cited in Arthur M. Schlesinger's The Crisis of the Old Order, 1919-1933)

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INTRODUCTION

Philadelphia, July 4, 2006

Without vision, the People perish. And democratic government dies with them--

So the founders of this nation understood, and so they established not only a constitutional government of three branches structured by checks and balances, but also insisted that the first amendment be incorporated into the Constitution to guarantee that the freedom of the press and public opinion would serve as strategic institutions to allow the people to watch over government and make sure each of its branches fulfilled the responsibilities assigned it by the Constitution--to protect and defend the security, liberties, and well-being of the American people:

“We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.”

But this July 4, as the people of this country approach the 2006 mid-term elections in the midst of an ill-defined and ill-fated “war on terror,” the securities and liberties that “we the people” established our system of constitutional government to protect are under threat as perhaps never before in the history of our nation:

As we have witnessed in recent days and months, the free press and the security of our fundamental human rights and civil liberties are threatened not only by an executive administration that justifies everything it does--including its attacks on the free press--in the name of prosecuting a perpetual war on terror; but also by a supine Congress that has failed to exert its proper constitutional responsibilities and powers to provide effective oversight of the executive administration in carrying out both its foreign (unsupervised practices of secret surveillance) and domestic (Katrina) responsibilities.

On top of these wrongs, we have allowed ourselves as citizens to be distracted and alienated from our own proper authority to control and direct our government, even as we have allowed private corporate interests to come to dominate the key political processes of elections and policymaking, on which the functioning of our democratic government depends.

To the wrongs of an overreaching executive office, and a supine Congress, we have thus added the evil of allowing corporate lobbyists and consultants to dominate the essential functions of our government, so that what should be the people’s government, our government—a government of the people, by the people, and for the people—has become largely their government—a government of the corporations, by the corporations, and for the corporations.

Now more than ever, it is therefore important for us as individual citizens and as a nation to remember and put into practice the lesson emphasized by one of the wisest of our founders--the antislavery advocate, scientist, statesman, and philanthropist Benjamin Franklin: A People that sacrifices its liberties to achieve security is deserving of neither, and will probably end up losing both.

As a previous writer on Common Sense at the beginning of our nation’s history stated, “A long habit of not thinking a thing wrong, gives it a superficial appearance of being right, and raises at first a formidable outcry in defense of custom.” Today, the dominant custom in our government has become one of corporate lobbyists and consultants dominating both the primary political functions of policymaking and the elections essential to the maintenance of a democratic constitution.

And unfortunately we, as citizens, have by our distraction and inaction largely accepted this take-over as a fait accompli. Without the assistance of any military coup, our government has, for all practical purposes, been taken over by private corporate interests, which have come to so control the framing of elections and the policymaking agenda, that “we the people” have lost effective control of our government.

It is now time for us to unite as citizens of a democratic republic to take back the reigns of government from the corporate interests now controlling them.

For if self-government is the ideal of a democratic nation, and faithful representation of our common interests as citizens by our elected politicians in Congress is the basis of a republican nation, then corporate domination of the institutions of government is the antithesis and subversion of democratic republican government.

If we want to preserve anything resembling true democratic government in the United States in the twenty-first century, we must organize across this nation to take the reigns of government back into our hands as citizens, so that corporations cannot continue to dominate the electoral and policymaking processes in the guise of acting on behalf of the interests of the citizens of this country.

This call to action is addressed to the people of the United States in the belief that we the people still have it in our capacity, if we act now, to begin again the history of this nation, to renew its proud democratic traditions, and to re-establish here in our own country a democratic government of the people, by the people, and for the people.

For it is not by invading other countries with our military, but by remaking our own country according to the ideals of democracy, that we can most effectively influence the history of the world for the better in the twenty-first century--not only for ourselves, but for all people.

The laying a country desolate with fire and sword, and economic spoliation, declaring war against the natural rights of all humankind, and extirpating the defenders thereof from the face of the earth, in our own or any other country, is the concern of every person to whom nature has given the power of human feeling; of which humble but patriotic class, regardless of Party censure, is the Author.*

In this spirit of common human feeling, I therefore offer in the following pages a basic challenge to the American people, supported by nothing more than common facts, readily available to the public, plain arguments, and common sense in pursuit of the goal of establishing effective democratic government in these United States:

I challenge you to join together with your friends, neighbors, and colleagues across the nation to organize a powerful nation-wide movement of citizens dedicated to taking your government back from the corporate interests that are, in their short-sighted drive for unrestrained profit and wealth, driving this country and the world to ruin.

However our eyes may have been dazzled up to this point by the show of corporate interest, and our ears deceived by the pandering of corporate lobbyists; however private prejudices may have warped our political wills, or corporate interests may have darkened our political understanding, I plead with all American citizens now to open their minds and hearts to the voice of democratic political reason (not narrow party prejudice or ideology) and common sense. And if you do so as a citizen, I am sure you will begin to see what you must do in the days ahead to win your government back to the service of the common good of the citizens of this country.

Perhaps the thoughts contained in the following pages about how we, as citizens, must reclaim the reigns of government from the control of private corporate interests, are not yet wide-spread enough to shape a fundamental reform of our politics in this year's mid-term elections. Perhaps these ideas about the kind of concerted action needed by the American people to make sure our elected representatives reassert democratic control over the practices of government are not yet common enough to bring about a nation-wide transformation in policy for the common good of all the people of this nation.

But if this be so, it is my hope that these pages may serve to provoke the kind of sustained public debate about fundamental issues of democratic government that may eventually affect, over the pivotal months ahead, the kind of revolution in political understanding and vision that will allow the American people to forge the unified political sentiment needed to renew the democratic institutions of this country, and to reestablish for ourselves and our posterity a government of the people, by the people, and for the common good of all the people of this nation.

Instead of a government of and for the private interests that now dominate the country’s political agenda and law-making, we need—now more than ever—a government that will work in our common interests to establish and enforce laws (for health, safety, energy independence, and environmental protection) for the common good of all the citizens of the United States, and not just for the wealthy few or the narrow corporate interests represented by the lobbyists that pay the highest bid. Our government and the policies by which we are governed should not be up for sale to the highest bidder in our cities, our states, or in Washington, D.C.

Under the current circumstances of economic globalization, many circumstances have, and will arise, which are not local, but universal, and will challenge the faith and principles of all who believe that humankind can best govern itself and participate in fulfilling its highest destiny through democratic means. These circumstances have already deprived many people and nations of the world of the ability to participate effectively in determining their own destiny, and have caused many to lose faith in the powers of democratic self-government.

Terrorism is only one manifestation of that loss of democratic self-governing power and faith. Whether ever greater numbers of the people of the world fall victim to this loss of democratic power and faith in the years ahead may well depend on what the citizens of the United States are able to do, or fail to do, in the months and years ahead, to renew the effective institutions of democratic governance that make the perpetuation of the democratic faith possible.

Without the democratic practice to back it up, democratic faith becomes futile, at best, and at worst becomes a delusion or cover to distract attention from the imposition of the tactics of anti-democratic, imperial force. And without the creative vision needed to renew democratic practice, our democratic faith—even in this greatly privileged nation--may fail in the years ahead. The Author dearly hopes that what follows may begin to nurture a rebirth of both democratic vision and practice among the citizens of this country.

I have nothing more to say by way of introduction, except to ask that readers will, for the time they take to consider the words that follow, suspend their familiar opinions and views, and allow their patriotic feeling, combined with (rather than opposed to) their reason, to determine the justice and validity of the arguments presented here; and that in response to their reasoned consideration and discussion of these arguments, they will decide how best to put on the true character of democratic citizens for conducting the struggle ahead.

And I would pray that all of us in this pivotal election year may, as citizens, through open and vibrant discussion of the kinds of issues raised here, learn how to enlarge our views beyond those that have for too long restrained and enslaved our political imaginations, and have thereby kept us from acting effectively as citizens to pursue our own best interests and common good as individuals and as a nation. To this democratic struggle, and to the betterment of us all as citizens and a democratic nation, I dedicate all that follows.

*Who the Author of this production is, is not important at this time, since the entire object of this writing is to focus attention on the ideas and arguments here set forward, and on their implication for the immediate future conduct of the citizens of this country during this election year, regardless of the particular party or class background of this pamphlet’s author or its readers. Yet it may be said that the author has no official role or connection with any political party, and is under no sort of party influence, public or private, beyond the influence of the patriotic “party” of democratic republican reason and principle, upon which the best traditions of government in this country were established. Such reason and principle is all the more important to emphasize today, since both our dominant political parties have been governing in ways that defy and violate this reason and its principles. It is now up to the citizens of this nation to exert their democratic authority in action, in order to bring both parties back into line with principles of reasonable and good government. It is to this most truly progressive party of citizens, wherever they live and work, that the Author truly belongs.

*****

COMMON SENSE--FOR A TIME OF CRISIS continues here.

1. An Urgent Appeal to Common Sense in Support of Democratic Government

2. Worse than George II: Corporate Control of the Reigns of Government

3. The Slippery Slope Into the War in Iraq, and the Failures of Democratic Nation-Building

4. The Distinction Between Corporate Interests and the Public Good

5. Toward a Common Sense Policy Agenda for the Common Good

6. A Progressive Common Sense Policy Agenda for the Nation

CONCLUSION: Rediscovering the Meaning of Democratic Government

Great Discussion of the Current Crisis on This Weekend's Bill Moyers on PBS

For great discussion and perspective on the sources of the current crisis, check out this weekend's Bill Moyers Journal on PBS, featuring an interview with Kevin Phillips, author of Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism--

Kevin Phillips: "What we're seeing here with the actions of the Federal Reserve Board is the people who were the arsonists--the people who pumped it all up, who blew up the bubble--are now racing to show up in firemens' hats, and say, 'We're gonna solve it, we're gonna take care of all this. Oh, and by the way we're gonna keep pumping in the gasoline that we pumped in before that made a good flame, but, you know, nobody knows that....' "

"We are on the wrong track . . . . The British were absolutely top dog in the world in 1914. Two world wars and 35 years later, they were having food rationing, the pound sterling crashed, dukes were giving guided tours of their castles because they couldn't afford to maintain them otherwise. It doesn't take long, and I'm afraid the United States is coming right into that period which marks a couple of decades coming up that are going to be very difficult...."

And don't miss Moyers' wonderful zinger of a critical commentary at the end of the show, in which he discusses the replacement of New York's dear old Yankee Stadium, opened in 1923, by the brand new gilded age "pleasure dome" for the wealthy, subsidized by taxpayers, where seats behind the dugout will cost $850, and behind home plate will cost $2500, and where more luxury sky box suites (rented for $600,000 to $850,000) will take up space for 5000 fewer seats for the common folks. As Moyers observes, this new gilded age stadium will "cast its shadow" over one of the country's poorest neighborhoods, "whose residents will watch from the outside, as suburban drivers avail themselves of 9000 new or refurbished parking spaces. Never mind all the exhaust, even though in this part of town respiratory disease is already so high they call it 'asthma alley.' "

Way to go Bill!-- Please keep your amazing commentaries and critical journalism coming! Now, more than ever in this era of corruption and crisis, we need your critical work and insights to help us stay informed.

And just as the Gilded Age of the 1920s was followed by the Great Depression of the 1930s, we now have to wonder: Who will fill all the expensive seats in the new gilded age Yankee Stadium in the coming decade?

KEVIN PHILLIPS
Bill Moyers sits down with former Nixon White House strategist and political and economic critic Kevin Phillips, whose latest book BAD MONEY: RECKLESS FINANCE, FAILED POLITICS, AND THE GLOBAL CRISIS OF AMERICAN CAPITALISM explores the role that the crumbling financial sector played in the now-fragile American economy.

WINNERS AND LOSERS
NEW YORK TIMES business and financial columnists Gretchen Morgenson and Floyd Norris discuss who wins and who loses in the financial turmoil.

MAJOR NEWS FLASH FOR THE PRESIDENTIAL CANDIDATES

We have an urgent news flash for the two major candidates who are asking the citizens and voters of this country to entrust them with our individual and national destinies in the most severe global crisis since the Great Depression--

NEWS FLASH for the Presidential Candidates:

THIS CRISIS IS BIGGER AND MORE IMPORTANT THAN BOTH OF YOU!

In spite of your continuing self-centered attacks upon each other, which indicate that you can actually get wrapped up in blaming each other for this crisis, THIS CRISIS IS MUCH BIGGER AND MORE IMPORTANT THAN BOTH OF YOU! And neither of you are so important or influential as to have been the source of this current crisis, so if you really want to be taken seriously, and serve some positive purpose in this current crisis, the first thing you can do is (at least) stop muddying the waters by wasting our patience and bankrupting your trustworthiness by blaming each other for the current crisis.

Playing the political blame game in the midst of the greatest crisis this country has faced since the beginning of the Great Depression only makes you both appear ridiculously trivial and unworthy of leading us through this crisis. So the minimal thing you both need to do if you want us to take you seriously as potential future leaders of our country is to put your petty egos and the political blame game behind you, so you can begin to focus attention on the real sources of our current crisis: the corrupted nature of the economic/political system that has brought us to this crisis.

Then, once you've done this minimal thing, if you really want us to take you seriously, you can show us what you've really got to offer us as citizens and voters--by showing us your analysis of the causes of this crisis and, based on your analysis, the approach you would bring to getting us out of this crisis.

ENOUGH of petty politics! ENOUGH of political bullshit! We want answers, and vision, and clear direction--NOT more of the same old petty distractions from the real crises determining our lives and futures!

In case you haven't yet heard what the heart of the American people has already been saying for a long time: We've had enough of the political bullshit, and if you really want us to take either one of you seriously enough to vote for you, it's time for you to turn off the bullshit about personalities and personal attacks and lipstick on a pig, and show us your analysis of how we've ended up in this mess and what you have to offer us in order to help us all to get out of it. It's time for you to begin to show us how you intend to lead this nation toward reconstructing out of this crisis a renewed democratic system of politics and economics that will begin to serve the interests of ALL the American people instead of the interests of only the most wealthy and powerful.

And if one or both of you cannot get over yourselves and the forms of petty politics in the midst of this crisis, then it's time for the American people to look for other candidates who will be more worthy of both the history and future of the American people and this country.

So Presidential Candidates, PAY ATTENTION to this NEWS FLASH:

It's time for you to move beyond politics as usual, or the American people will move beyond both of you.

We've had Enough, and if you can't show us you have a real alternative to the current forms of economic policy and poliltical bullshit that have gotten us into this mess, it's time for the American people to move beyond you.

THE CURRENT CRISIS IS BIGGER THAN BOTH OF YOU, WAS NOT CAUSED BY EITHER OF YOU, and the only question is whether either one of you will be able to convince us that we should really take you seriously as a presidential candidate in this time of unprecedented crisis.

We've had ENOUGH! Either show us you can move beyond political bullshit, distractions, and mudslinging, to real analysis of, and solutions to this crisis, or we will move beyond you both.

Both of you have said you embrace the politics of change; now it's time for both of you to show us that you really understand what change means.

Current Financial Crisis Unmasks the Fiction of the Laissez-faire Market

After a generation of near totalitarian rule, the ideology of the unfettered free market--which was used as a blunt weapon to weaken or destroy almost all forms of market regulation--has brought the capitalist financial system to the brink of a collapse eerily similar to the days before the great crash of October 1929.

The current crisis has forced the Fed to rediscover the need for the firm hand of market regulation and intervention to restore order and trust in a market system collapsing under the destructive weight of laissez-faire ideology. The current crisis has served to pull back the curtain of our political economy to reveal the manipulative wizard hiding behind the fiction of a laissez-faire capitalist ideology that assumes THE MARKET can function free of the structuring hand of human regulation and decency.

The current crisis has forced even President Bush (in his brief statement of Sept. 18) to admit the need for the assertion of a firm governmental hand to keep the global market system from collapsing like a house of cards. Fortunately over the last several weeks we have witnessed the arm of the federal government rediscovering its regulatory function in the midst of crisis, as it has reached out to rescue Fannie Mae and Freddie Mac, and to orchestrate the orderly dissolution of Lehman Brothers, the effective nationalization of the global corporate insurance firm AIG, and begin to structure a new regime of regulation to try to reign in the destructive power of naked short selling in the stock market--even as Congressional leaders are now working with the administration to prepare a strategy for taking charge of over a trillion dollars of bad private debt.

Altogether, these actions are demonstrating the gravity of the current financial crisis, which is requiring the federal government to assert a comprehensive financial regulatory power in ways not demonstrated since the years of the Great Depression in order to protect and bring order to a market system teetering on the brink of collapse.

We are lucky that current leaders such as US Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke seem to have learned well the historical lessons of the Great Depression, and are therefore not repeating the mistakes (of inaction) of the Coolidge and Hoover administrations that helped to precipitate the Great Crash of 1929 into the disaster of the Great Depression.

If the same kind of incompetence and corrupt leadership were in place in the Fed and the Treasury as have been in place in other parts of Bush’s executive administration, we might already be talking about the great crash of September 2008. And while we’re not yet beyond the danger of such a collapse, the Bush administration’s admission and rediscovery of the need for the strong hand of regulation to guard the market against the excesses of laissez faire totalitarianism may finally begin to turn back the tide of financial and economic disaster.

In the next few days, including another busy weekend for the Fed, we shall see whether the leaders of our government can make good use of historical wisdom and the appropriate powers of government to fulfill their duty to provide for the safety and welfare of the American people and our economy.

Fiddling While the Free Market Burns: Onward to the Great Crash of 2008

In another brilliant commentary, titled "Fiddling while Rome Burns" (Sept. 16), NPR's Daniel Schorr dissected the absurdity of so much of the current political campaign:

Rome in its decline must have been like this, glorying in its circuses and gladiators even with the Visigoths at the gates, and so now our southern cities are lashed by hurricanes and in the North great temples of capitalism crumble and our aspirants for the Presidency have been debating issues like "lipstick on a pig." The rhythm of the campaign has been disturbed by the Wall Street meltdown . . . . But never mind--the struggle over who dissed whom, who first spoke about lipstick on a pig goes merrily on--oblivious to the disasters and perils the nation faces.

Fortunately, since Schorr uttered these words, the seriousness of the developing financial crisis has finally seemed to bring the presidential debate down to real issues, although the McCain campaign's assault on all bastions of truth and evidence continues unabated....

We can at least be glad that the two men (US Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke) overseeing many of the decisions guiding the government's response to the current crisis are not those running for President, nor the current President. For unlike the leaders of the Coolidge and Hoover administrations, and most of the Bush administration, both Paulson and Bernanke seem to be demonstrating they undertand the lessons of the 1929 Crash, and appreciate the supreme value of well-targeted and bold government action in a time of crisis. Let us hope they continue to demonstrate the wisdom of historical understanding, and that the rest of our federal leaders begin to restructure their thinking and policy action accordingly.

Otherwise, we may all soon be talking about the Great Crash of 2008.....

U.S. Capitalist Financial/Economic System on the Brink

While the two U.S. Presidential candidates have allowed their campaign to descend into stupidity and triviality, and the Bush administration is trying to restart a Cold War with Russia and foment another major escalation of military conflict on the Pakistan-Afghanistan border, the nation's financial and economic system teeters on the brink--after a second weekend of Wall Street brinksmanship to deal with the failure of two major financial firms (Lehman Brothers and Merrill Lynch) following last weekend's last-ditch efforts to save Fannie Mae and Freddie Mac from complete collapse.

The collapse of Lehman Brothers, and attendant weakness of other major financial institutions, has now produced perhaps the worst U.S. financial crisis since the banking panic that faced former President Franklin Roosevelt at the beginning of his administration in March 1933.

While the economic survival of the United States and its own citizens are increasingly on the line, and the United States is in need of state-building efforts at home to address the growing poverty rates, homelessness, joblessness and suffering of our own citizens, the national political debate (as reflected by the candidates and the corporate media) seems completely disconnected from these desperate realities.

In order to pull ourselves back from the brink, the citizens of the US need to demand two things above all others from anyone who wants to be a political leader, and from anyone who asks us to support them with votes or financial contributions in the upcoming elections:

1) Clear focus, dedication, and vision for dealing creatively with the economic, health, energy, social, and infrastructure problems in our own country;

2) In order to focus on these problems at home, a clear commitment to getting out of the war-making and state-building business overseas, so that we can dedicate all our precious human and material resources to fixing the mess the Bush administration has created at home.

Instead of this kind of focus on solving our own problems and building a viable strategy to address these growing problems, in its last months in office the Bush administration seems to be trying to get us even more deeply involved in several more wars overseas (in Pakistan, in particular). And unfortunately both our leading Presidential candidates of the Republican and Democratic parties have seemed to give permission to the Bush administration by stating that they would support military incursions into Pakistan.

When will the people of the United States and its presumptive political leaders wake up to the fact that they cannot hope to address any of these deepening crises at home while continuing to expend billions of dollars fighting wars overseas?

Just like the Soviet Union collapsed in the 1980s through a combination of military overreach and hubris (in Afghanistan) and bad economic decision-making, the United States seems to be heading in the same direction now.

Will the United States go the way of the Soviet Union?

For obvious reasons the corporate media seems incapable of considering or discussing in a critical fashion the possibility that the capitalist system may be just as corrupt in 2008 as the Soviet Communist system was in 1988.

But the survival of any meaningfully democratic political and economic system in the West may depend on whether discussion of the corrupt forms of capitalism can not only be put on the table, but be placed at the center of the table for discussion. The capitalist system, if it wishes to survive, is now in major need of dramatic reforms if it is to adjust to the demands for change arising out of the global energy, climate, and financial crises, which will bring a tsunami of change to the world's economic and political systems one way or another.

The only question is whether capitalism will be able to transform itself in ways that strengthen democratic capacities to respond to these pressing problems, or will preside over the destruction of what remains of democratic forms, as the world descends into a chaos of violence and perpetual warfare and economic destruction through the failure of political vision and leadership in the years ahead.