John McCain has a rescue plan for his campaign, and don't count him out yet. In returning to Washington, he hopes to deliver his Republican Caucus for the Bush-Paulson plan, plus a few concessions to the Democrats. The clue is the statement by former Speaker Newt Gingrich hailing McCain's move as great leadership. Gingrich, of course, speaks for the wing of the party most opposed to government intervention. It's a big it, but McCain also hopes the vote can be engineered by the weekend, forcing a cancellation of the Mississippi debate. He wants to emerge from this as a problem-solving leader, leaving Obama to look like a mere "debater." We'll see.
The proposed Wall Street bailout is the ultimate lipstick on a pig. Progressives should oppose it, no matter the cosmetics. I speak as a 20-year veteran of electoral politics, not an economist, when I say there is no way this Congress and the White House can agree on any reforms commensurate with the scale of the $700 billion theft.
This is a plan that Mussolini could have written.
What Barack Obama himself should do is a different matter. He has a track record of proposing greater regulation of Wall Street starting before the current crisis. He would like to appear "responsible" during and let McCain's long record of deregulation mania going back to the Keating scandal speak for itself. But Obama, in being too cool, may allow McCain to reinforce his "maverick" status by taking the more populist position.
This is about the presidency, not only the economy.
Progressives should say No to this deal and begin a new phase in building a real progressive movement and more populist Democratic Party in the direction of economic democracy.
On Iraq, progressives have succeeded in discrediting the neo-conservatives, centrist Democrats, and humanitarian hawks. Public opinion in general, and 85 percent of Democratic voters, are with us.
For those same five years, we have had a harder time winning the economic argument. But we have succeeded in blocking the momentum of the WTO, especially towards Latin America, and turned many Democratic politicians against corporate trade policies. The public is with us on protecting Social Security and repealing tax cuts for the rich as well. The trouble has been challenging the core notion behind privatization and deregulation, that is, the myth of the "free market", trusting private banks and corporations, the geese that lay the golden eggs, to invest in the common good. Everywhere you look today, the trend is towards private financing of schools, colleges, economic development, political conventions, sports teams, even thousands of non-governmental organizations, including progressive ones. Treasury Secretary Paulson, for instance, just became chairman of the board of the Nature Conservancy, threading their futures together. The public sector declines while inequalities grow. Regulations are stripped away.
Many have lost the way from the principles of the Populists, Progressives, Socialists and New Dealers. Those political ancestors saved capitalism in their own ways, but at least they believed in a strong, growing public sector to assert the public good where markets failed. They put more than lipstick on the pig. Collective bargaining, social security, public utilities, regulation of banks and corporations, and the direct election of senators were a few of the reforms that resulted in those eras.
Today the Democrats are looking for the minimum concessions that will help them cave. Since the Clinton era, or perhaps really the Carter era, progressive economic thinking in the Democratic Party has been narrowed to the choices of lipstick again and again. They are incapable of saying No, even to the greatest stick up in the history of our economy. This is the "shock treatment" explained by Naomi Klein, in full view.
Bush and McCain will be satisfied this week if the Democrats win Congressional oversight, modest re-regulation, and perhaps limits on compensation for the executives who are to blame for the catastrophe.
But given the political situation, there is no possibility of any package of concessions that comes near the magnitude of the theft.
For the moment there is little that serious progressives can do, unless -- and this is my hope -- people unexpectedly go into the streets. But we should realize and drive home the argument that free markets are a faith-based lie, that privatization is greed without fetters, that the public sector must be restored to the role of defending the public interest. The two grand strategies of the empire - militarization and privatization -- are failing everywhere from Pakistan to Bolivia. The space is wide open for a populist, progressive, anti-war agenda, rising from below.
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