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Friday, September 26, 2008

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.

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