You have to dig awfully deep to find something good to say about the economic turmoil swirling around us. These are painful times, and as is often the case, the many are paying the price for the recklessness of the few.
Yet if we play our cards right, some deeply embedded and highly destructive ideology may collapse just as hard as an overleveraged investment bank. And the fact that this possibility is occurring a mere few weeks before an historical election...well, all I'm saying is that we may be looking at a valuable silver lining to the storm clouds hovering overhead.
What is ideology anyway, and what's so bad about it? The dictionary says that ideology is simply a set of beliefs that form the basis of a system. Nothing wrong with that. Where you run into trouble is when the ideology itself blocks the system from learning, from self-correcting.
That's been the problem with our politics and economics in this country in recent years, if not for decades. Ideology under this definition has a unique characteristic: it is impervious to facts.
I've seen this through the lens of economic policy. Advocates for supply-side, trickle-down tax policy, both academic economists and top economic officials, continue to argue that large tax cuts for the wealthiest households are the most reliable way to stimulate growth. Yet the evidence belies these claims, with the Bush tax agenda as exhibit A (see also Reagan and Thatcher).
You know what does happen when you cut rich people's taxes? They get richer. In this way, Bush managed to amplify the historically extreme wealth inequality that the market itself was generating over the 2000s, as did Reagan in the 1980s. In contrast, during the 1990s, under a more progressive tax regime, economic growth was much more broadly shared (to be precise, the top continued to pull ahead in those years, but unlike the 1980s or 2000s, middle- and low-incomes grew as well).
So there it is: supply-side ideology is impervious to evidence (stop the presses!). And for a contemporary example, you need only look back to last week, when John McCain released his economic plan to help folks battered by the recession. The plan included a cut in the capital gains tax by half (from an already too low 15% to 7.5%).
As I wrote here, this type of income, such as the profits from selling appreciated assets like stocks, is so concentrated among the wealthiest families, that only 0.2%, or $4, of the gains from this cut will reach middle-income folks. Yet smack in the middle of the worst financial crisis since the Depression, this is what a presidential candidate comes up with.
Okay, you're thinking, that's politics. It's no blazing insight to point out the politicians espouse bad ideas driven by some decrepit ideology, nurtured by the lobbying machine that benefits from the spoils.
But the ideological stench goes--or maybe 'went', if we're smart--much deeper. When asked the other day for a simple explanation of what caused the financial crisis, I answered "Ideology." You may think "greed" is a better one-word explanation, but my theory is that greed is a constant. Folks, whether on Wall St. or Main St., are no greedier today than yesterday (an assertion without proof, but I'll bet it's true). What's changed is an ideologically-driven politics that allows and amplifies greed, instead of checking and constraining it.
In financial markets, this manifested itself in the belief that market forces themselves would control greedy impulses, punishing those who took positions that were unsupported by economic fundamentals. Lenders who made bad loans would be disciplined by losses; bets on derivatives would help us manage risk, not, as ultimately occurred, amplify risk beyond our wildest fears. Investors would quickly recognize those banks that borrowed too much to support their operations, and would avoid them until they got their balance sheets in order.
There were, of course, people whose visions were not blinded by ideology who warned about these excesses. Years ago, the head of one of the financial regulatory agencies tried to regulate derivatives but she was blocked (Greenspan said at the time, "Regulation of derivatives transactions that are privately negotiated by professionals is unnecessary.") Ned Gramlich warned the Greenspan Fed in the early 2000s that the subprime market was becoming unhinged, but again, the ideologues in charge failed to act, assuming self-regulating markets would take care of it. My colleague Dean Baker recognized the housing bubble long before it popped and loudly warned about it, yet he was unheeded, dismissed as a pessimist who simply didn't understand the perfect machinations of markets. I wrote a book about the trouble this type of economics--I called it YOYO (you're on your own) economics--was causing.
So what makes me think we have a chance to change all this? What evidence suggests that the next time Dean identifies a bubble, or Krugman points out a policy mistake in action, or some regulator actually tries to do her job, someone in power might listen to them?
Well, actually, quite a lot. Jeez, it's the George W. Bush administration that's nationalizing the nation's banks! Talk about ideology on holiday. Not that you'd want to read too much into that...I suspect Bush himself doesn't really get what's going on. But there is no spring in the step of conservative ideologues these days. They've seen their model crumble, and history is quickly passing them by. They may clutch their Milton Friedman texts and rage against the most extensive government intervention in the economy of their lifetimes, but no one is listening to them.
Last week's final presidential debate was also instructive in this regard. As Joe Klein (that's Joe the journalist, not Joe the plumber) nicely deconstructs it here, McCain was "...locked in the coffin of conservative thinking and punditry. He spoke in Reagan-era shorthand. He thought that merely invoking the magic words "spread the wealth" and "class warfare" he could neutralize Obama. But those words and phrases seem anachronistic, almost vestigial now."
Amen. The old ideological blows aren't landing the way they used to, and this has presented an opening for much-needed change.
Which brings us to Obama. When it comes to ideology, I think voters are positively responding to the impression that he is not steeped in the type of ideology that ignores evidence. It's not that he's non-ideological--he's been a Democratic politician for years and a community organizer before that. But he seems to have a strong pragmatic streak. From what I can see, and as an informal advisor I've interacted with him a few times, his approach to policy is to surround himself with all the evidence from all sides, and let the experts make their cases. Then he chooses the answer he thinks will best solve the problem. But the key word is "evidence." You will not convince him with fact-free arguments about trickle down, any more than you will with "victory must be ours."
The contrast with Bush, or with McCain/Palin (especially Palin, who seems particularly unburdened by facts) is stark, of course. And it is this confluence of events--a economic cataclysm born of stubborn ideology; an historical election where reality-based pragmatism is offered as an antidote to yet another dose of the same failed agenda--that yields this potential opportunity.
The polls suggest the majority of the electorate may be on the verge of showing these ideologues the door. Not a minute too soon...really, quite a few years too late.
This is a man who NOW has no useful purpose and should go back to his home in Texas and be very quiet!
It was clear from Senate Testimony of Paulson's flunky Kashkari ("Cash and Carry") that he wants to simply hand the banks the money and let them do as they please!
His excuse is that he does not want to interfere in THEIR business!
So TAXPAYERS give BANKS our money and they can payout Bonuses, pay off debts, or take a spa vacation!
It is also clear that Paulson is not FAST TRACKING the bailout of Homeowners!
Bush has run the most corrupt administration in American History and damaged our country and markets worldwide. The Bush Administration must STEP DOWN Immediately After the Election!
Although the purpose of your propaganda following, about Obama's spending--the charming vision of a urinating drunkard, how quaint--is also clear, the sense of it hides away behind the ideology which you do not acknowledge or own. Ah well, perhaps some day folks will want a conversation that is real, instead of hoping to obtain something by misleading obfuscation.
Ideology is tantamount to paradigm. Everyone whose brain function rises above chimps, whether s/he knows it or not, has some set of premises and organizing concepts that guide opinionmaking. These systems, unless critically examined and ruthlessly criticized, do tend to me self-perpetuating. Almost everyone suffers from a 'slow-learning-curve' in this regard; what we know becomes comfortable.
Ruling class ideology revolves around power, profit, and class privilege. To assert that supporting tax cuts for the wealthy--which Clinton showed few signs of eviscerating, btw--is ideology misses an important teaching moment. Propaganda is partial truth presented for a partial purpose by individuals with greater than average knowledge, who want to influence thinking, behavior, or feelings of those who lack facts. The whole economic program since Reagan represents a propaganda coup to support bourgeois ideology.
Today's collapse is not about the ideology, but about an objective failure of capitalism that this posting acts as a different sort of propaganda to cover up, at the same time disguising its own links to the ideology of profit, power, and class privilege that it does not attack.
The same market forces and ideology that created the Great Depression have been at work in the current financial debacle - 70 years on, that ideology persists. It's not going away this time either.
There is not going to be a "death" of the Republican Party, or Neocon foreign policy, or right-wing conservative ideology. They may be temporarily out of power after Nov 4, but they aren't going away, unless you believe all right-wingers will have a collective epiphany on Nov 5 and become progressives - I'm not holding my breath.
Since I'm not a Republican or a Democrat I think I can safely say that my point of view is as an outside observer, so..... I would like to offer this advice. Don't count your Chickens before the Fat Lady sings other wise you may be putting the cart before the horse. Don't take anything for granted because tides do change. Right now the Republicans in the Administration are working as hard as possible to get the economy back on track (or at least their version of it). They feel that as long as the Stock Market gets bullish again then they might have a better chance to win the election. They even managed to sucker most of the Democrats into helping with their bailout plan. So don't rejoice too soon. The Democrats must be careful and wary in order to maintain their impetus.
There were always those who opposed the idea of working people being treated with dignity. The people who were against a strong working class devoted their energies to undermining it, first with the anti-communist hysteria of the 50s. By the 1960s the internal war was full-blown.
The ideology to rationalize the theft, lies, torture and murder committed by those who want all the money and complete control is provided by Friedman today. But it was provided by others in earlier decades. The only real question is whether you believe the country belongs to the working people and should be run for their benefit.
Americans have tired of arrogant ideologues, and extremism, but the extremism of the Bush era created a tipping point. We've tired of officials who don't value statesmanship, especially when America's at risk. We've tired of those who think first - party affiliation and the political angle. We crave responsible governance. We demand officials who focus on the responsibilities of office. Not to infect an office held in the public trust with the agendas of the few.
There's been an undercurrent of this arrogance that mutes pragmatism, and dispels any honor to the statesmen who've forged our institutions. This arrogance denies all that's relevant for the petty. This anti-intellectual populism evokes disdain for thoughtful leaders who invest time and energy in reaching out instead of grandstanding and talking points. These ideologues ignore and disrespect what's made America great.
We're lost. We yearn for judgment that evokes fair mindedness; leaders who sacrificed personal gain like Ike, Teddy, and Abe. It's time for change from outrageous conceit that suggests that we somehow, in this age, know better.
Our time is now. America's rebirth will value its past as a source of understanding and an antidote to the issues of today. We will ignore those who fail to respect all that Americans have wrought through toil and blood, and we will see the howling and bellicose as shallow, partisan, and destructive to the American dream.
Should we privatize our law enforcement and use Blackwater instead of police departments? Should we, as McCain astoundingly suggested in the last debate, use thousands of military people as teachers without credentials? Has our utility grid improved with less regulation and more "competition?" Is our health care system really "the best in the world?"
Certain aspects of our country and our lives need to have "socialist" solutions. But why the name calling? Because its political and it is all about money, greed and power rather than serving the needs of the people.
And am I a communist or socialist for even uttering those words? Are we or are we not going to have a country like our forefathers envisioned? Life is and has to be full of rules and regulations. Otherwise it is chaos. The republicans have had their shot at turning this country into a failed fascist state.
Now it is time to put some real thinking to work to develop a new system. Then we can name it.
Take healthcare-do we really want to slow down the R&D in the building of the better "Mousetraps"?
Sure academia will be there but, if we had adopted a system similar to Canada and Europe, we would have turned off that spigot long ago. Most Healthcare R&D is focused on this market with the socialist systems the beneficiaries of that reality. When that happens, we must come to grips with the realization that we must accept that premise that "Healthcare is good enough now forever". Sure there will be advances but, they will be slowed considerably.
Put in another way if we had adopted that system 30 years ago, some of use would not be reading or posting here today.