In a Financial Crisis, Who Do You Call? The Democrats!
Ernest Partridge, Co-Editor
The Crisis Papers
September 23, 2008
the time for all good Democrats to come to the aid of the capitalists.
However, if the Democrats are to be of any help, first of all the
capitalists must come to the aid of the Democrats.
There’s an election coming up in just six weeks. What is the fat-cat,
Wall Street tycoon to do about it? He and his well situated
buddies can direct bundles of cash to various campaigns, they can order
cadres of lobbyists to lean on candidates, and they can issue orders to
the corporate media to slant their (so-called) “news coverage" this way
or that. They can, for all practical purposes, decide the outcome of the
So what do they do? Heretofore, the answer was pre-ordained: Boost the
Republicans and slam the Democrats. Rig the elections. Override the law
(e.g., Bush v. Gore). And then, as a consequence, the lobbyists will
write the laws for a compliant Congress, taxes for the wealthy will be
slashed, regulations will be dropped. And the bill will be charged to
future generations. In short, capitalist heaven on earth.
As any economist worth his tenure will tell you, this is the road to
ruin. And it appears that we have followed that road to its destination
– just short of a presidential election.
“Take care what you wish for: you just might get it!”
So what is the electoral choice before our hypothetical tycoon? On the
one hand, a brilliant, Harvard cum laude lawyer, teamed with a
seasoned legislator, nominated by a Democratic Party that has drifted
somewhat to the right of what used to be called “moderate
Republicanism.” On the other hand, an aging befuddled warrior and a
self-confessed economic and computer illiterate, ranked at the bottom of
his graduating class, running with a clueless fundamentalist fanatic
with a pretty face.
Faced with this choice, many of the filthy-rich GOP movers and shakers,
creatures of habit as they are, will no doubt dance with the dude that
brung ‘em. But to those few who have been jolted by the financial shocks
of the past week into a willingness to pause and reflect for a moment,
this essay is for you. (See also, my
Dear CEO: Is This
Really What You Want?)
The Democrats must save capitalism, again.
What happens when you let a bunch of kids into a candy
store, unsupervised by any grown-ups? Of course, you end up with some
unhappy youngsters with full-blown belly-aches. Then it's past time to
bring back the adults and plenty of Pepto-Bismol.
Analogously, in the novel “Lord of the Flies,” William Golding described
what happens when a rabble of young undisciplined egoists are tossed
together. Also Thomas Hobbes in his classical treatise, The Leviathan
(1651). It’s called, “the state of nature,” wherein life, according to
Hobbes, is “solitary, poor, nasty brutish and short.”
In economics, it's called
“market fundamentalism,” whereby wealth flows
from the producers of wealth (the workers and the middle class, i.e., the
“whiners”) and from the social and physical infrastructure, to the
owners and controllers of wealth until, with the economic foundation in
ruins, the system collapses. Unconstrained capitalism, like
communism, contains within itself, the seeds of its own destruction.
As Nobel economist
Joseph Stiglitz puts it: "The fall of Wall Street is for
market fundamentalism what the fall of the Berlin Wall was for communism
-- it tells the world that this way of economic organization turns out
not to be sustainable."
It happened to the Soviet Union in 1991. Now it’s our turn.
The remedy? Government and the rule of law, or as the late biologist,
Garrett Hardin put it, “mutual coercion mutually agreed upon.” (Hobbes’
solution was a dictatorship, but his successors, Locke and Jefferson,
devised a more benign solution: rule of law and government by consent of
The last major economic belly-ache took place some eighty years ago, and
was called “The Great Depression.” The people of the United States
responded by throwing the perps out of office, and bringing in the
reformers: FDR and the Democrats, of course.
So our question to the hypothetical tycoon: Who is best suited to get
you (and us) out of this mess that you’ve created? The folks who gave
you the keys to the candy store, or the grown-ups that came to your
rescue with remedies that proved effective in the past?
Sarah Palin and the Revenge of the Christoban.
The traditional Republican poobahs are facing a revolt
of their proletariat, and it ain’t pretty.
Our hypothetical corporate oligarchs are not, by and large, Jesus
freaks. Many are non-Christians (Jews, agnostics, or unaffiliated), or
if Christian, of traditional denominations such as Catholics,
Episcopalians, Methodists, etc. The oligarchs tend to be graduates of
prestigious universities, and scientifically literate. In fact, many
corporate executives are trained scientists and engineers, and, in any
case, the success of their enterprises depends directly on the
application of leading-edge scientific research and development –
notably, the computer, chemical, energy and pharmaceutical industries.
However, these corporate executive and scientific elites do not comprise
a politically significant number of voters. So they have cleverly
enlisted “the religious right” as foot-soldiers in their political
campaigns by promising to outlaw abortion and gay marriage and to put
God and creationism in the public schools.
But now the oligarchic political generals, after failing over the past
decade to deliver these goods, have been overthrown by the “soldiers”
who have taken over the Party, and have, in effect, ordered the GOP
presidential candidate to put one of their own on the
And just how extreme is Sarah Palin? A Wasilla neighbor,
Phil Munger, is not
"She wanted to get people who believed in
creationism on the [Wasilla school] board. I bumped into her after
my band played at a graduation ceremony at the Assembly of God [a
church]. I said, 'Sarah, how can you believe in creationism - your
father's a science teacher.' And she said, 'We don't have to agree
on everything.' I pushed her on the earth's creation, whether it was
really less than 7,000 years old and whether dinosaurs and humans
walked the earth at the same time. And she said yes, she'd seen
images somewhere of dinosaur fossils with human footprints in them."
Mr. Munger also asked Mrs. Palin if she believed in the End of Days,
the doomsday scenario when the Messiah will return. "She looked in
my eyes and said, 'Yes, I think I will see Jesus come back to earth
in my lifetime'."
The consequences of the successful revolt of the fundamentalist
“foot soldiers” in the GOP must be chilling to the deposed “generals.”
If, either by succession or eventual election, the Chistianists’ darlin’,
Sarah Palin, becomes President, we can kiss goodbye any expectation that
the U.S. can or will deal with the global climate crisis or lead the
world into the post-petroleum economy. Scientific education, research
and development will surely languish in the United States, while the
cutting edge of science and technology will inevitably move to Europe,
Russia and the Pacific Rim, all of which successfully departed from the
Dark Ages a half-millennium ago.
No prospect could be more dreadful to the corporate executives and
investors, who have traditionally supported the Republican Party.
The solution? Throw the barbarians out of the palace. And the most
immediate, effective and certain way for the Republicans to accomplish
this is to relinquish the government to the Democrats, who are
refreshingly free of fundamentalist hocus-pocus.
Then, after a season out of power, the Republican Party, free of the
crazies, can reconstitute itself into a responsible, moderate, and
secular institution: kind of like it was under Dwight Eisenhower.
Meanwhile, as a minority partner in the Obama administration, the
Republicans can work with the Democrats to restore America’s former
leadership in science, technology and industry by investing in
education, physical infrastructure, and basic scientific research.
Facing the Decline of American Global Influence and
As all too many regressive market absolutists have too
readily forgotten, a functioning and flourishing market is, at its
foundation, a moral order. It presupposes obedience to mutually accepted
rules and regulations, and it is based upon trust and confidence: above
all confidence that published statistical data (on employment,
investment, profit and loss, etc.) is accurate.
With the Bush Administration’s abrogation of international treaties and
agreements, its reckless deficit financing of an illegal war, and now
the disclosure of deceptive and even illegal behavior among the leading
financial institutions, that essential trust in the American financial
structure and in American good faith negotiation has been severely
To put the matter bluntly: the United States of America is no longer a
trusted partner in the global financial community.
If this loss of trust is not restored immediately and decisively, that
global community might decide to exclude the U.S. from the “playing
table.” The U.S. dollar could be replaced by the Euro as the
international standard currency, and the value of the dollar could
collapse. The multi-trillion dollar U.S. debts could be called in, and
no further loans could be granted to the U.S. Treasury. And that
would be the end of the United States as a major global power.
The United States, with its astronomically huge foreign debts, its
enormous trade deficits, its loss of manufacturing base, and its
dependence upon foreign resources (especially petroleum) is no longer in
a position to claim leadership in the global economy, or even to make
rules in that economy.
In fact, should the rest of the world (notably Europe, Russia, Japan,
China) finally decide it has had enough of American bullying and
empire-building, the world community can, if it so decides, demolish the
U.S. economy, the might of the American military notwithstanding. (See
The Vulnerable Giant).
So we ask our hypothetical stalwart Republican tycoon:
Who is best qualified to avoid such a catastrophe, and to restore the
trust, prestige, and leadership of the United States in the world
community? A self-confessed economic ignoramus, whose one-note
diplomatic repertory is “bomb, bomb, bomb”? Or a trained lawyer, skilled
in community development, and the
co-author of significant
legislation regarding arms-control, nuclear proliferation and
Moreover, imagine if you will, the impact upon the international
community, and in particular the Islamic nations, of the election of a
American President with the name of “Barack Obama.” This would
announce to the world that the United States has at last put aside its
historical racism, and is now prepared to deal with its global partners
with respect and without bias.
The rational and financially self-interested course of action for the
corporate executive and investor is to throw out the cowboys and the
buccaneers, and replace them with responsible and honorable players in
international finance. It is a solution that has the distinct advantage
of being radical, sudden and unequivocal. And it can be accomplished on
What the Oligarchs Must Do Before November 4.
Suppose our hypothetic tycoons are persuaded (a) that
capitalism must once again be saved from itself by the restoration of
government oversight and regulation, (b) that a theocracy is anathema to
the functioning of a modern, industrial economy and to a solution of
global environmental crises, and (c) that the Democratic candidates
offer a vastly superior opportunity to restore America’s stature in the
Suppose, in short, that they have decided to renounce their allegiance
to the Republican Party (at least for this next election), and to cast
with the Obama/Biden ticket.
What, then, are they to do?
Here are a few suggestions:
1. First, and most obviously, they can announce their endorsement of the
2. They can direct financial support to the Democratic campaign.
3. If they have influence or significant investments in the corporate
media, they can “unleash” that media, and direct them to practice
4. They can publicize the vulnerabilities of
paperless touch-screen voting machines, put pressure on law enforcement, and put the election industry on
notice that hanky-panky in this election will have severe consequences.
In sum, out of simple enlightened self-interest, the corporate elites
must look to the Democrats to rescue them from the morass into which the
GOP has led them.
If they are smart, that’s what they will do.
But don’t count on it.