|
| |
Foundational Dry-Rot the Work of Greedy GOP Termites
By Bernard Weiner
Co-Editor, The Crisis Papers
October 14, 2008
Let's talk about the moral issue underlying our current economic crash,
and, more broadly, America's slide from the heights of its international
economic and political power.
Here's the simple thesis: It's impossible to sustain for long a
structure that rests on faulty foundations. Inevitably, that structure
will collapse. The U.S. was resting on rotting foundations that
Republican ideology had built (enabled too often by Democrats, sometimes
because they'd been bought off and sometimes because they were too weak
to do much about it). It was a matter of time until the inevitable
catastrophe occurred.
Let's fold in some history here. Both communism in the Soviet Union and
fascism in Italy and Nazi Germany were so weakened by internal
contradictions, based as they were on a warped view of reality, that
they began imploding from within and thus were more vulnerable to
pressure from without. As a result, they eventually, and relatively
quickly, disappeared. Hitler's "thousand-year Reich" was gone in 12
years. After several decades, the communist "wall," that metaphor for
permanent communist rule, fell virtually overnight.
Both authoritarian systems were ruled from above with iron fists and an
enormous propaganda infrastructure. There was little tolerance for
dissent, oppositional parties were wiped out, and citizens were spied on
constantly by their government. Democracies, despite their many flaws,
are ruled by leaders dependent on the "consent of the governed," and
dissent and alternative views are recognized as indispensable
correctives on the universal tendency in politics for corruption and
over-reaching.
When the neo-conservative extremists took over the Republican Party in
this country and then the Executive Branch of government, in their
arrogance they bragged about how they were now "history's actors" who
"create our own reality" that everyone else would have to adjust to.
Even before 9/11, the White House initiated massive, illegal spying on
Americans; the supposedly free press to a large extent became a
corporate propaganda arm of the ruling political ideology; and both the
opposition Democratic Party and the Legislative Branch in general were
marginalized, neutered, rendered largely irrelevant by the "unitary"
Executive. White House Press Secretary Ari Fleischer warned those of us
in the reality-based community to "watch what you say." Dissent could be
dangerous to one's health. Then-Attorney General Ashcroft equated
opposition to Administration war/police policies as giving aid and
comfort to America's enemies, in essence charging "treason." (He told
Congress: "To those who scare peace-loving people with phantoms of lost
liberty, my message is this: Your tactics only aid terrorists -- for
they erode our national unity and diminish our resolve. They give
ammunition to America's enemies, and pause to America's friends.")
WARS BASED ON IDEOLOGY
The war of choice begun by the CheneyBushRumsfeld ideologues against
Iraq is an essential part of the moral and then political crash of the
Republican Party. Wars of choice only work in the long run when they
rest on clear support of the population back home, when the citizenry
agree with the necessity for the conflict because there is a
demonstrably-proven imminent, national-security threat. Neither of
America's two great wars in the past 40 years (Vietnam, Iraq) have
rested on that foundation.
Given the effectiveness of modern-day propaganda techniques, it's easy
enough to take a country to war with a patriotic public behind it. But
when the reasons for the war are faulty, based on lies and deception,
devoid of a moral justification, not based on demonstrable proof of
imminent threat, those wars cannot be conducted successfully and support
for those misadventures begins to rot and creates a moral decay in the
social fabric. Or, to switch metaphors, it's as if a swarm of ravenous
termites were to invade the moral system and begin chomping away at the
wood in the floor and in the support posts.
Over time, this infection seeps throughout the entire body politic,
weakening it. The population begins to notice the discrepancy between
what the rulers are saying and the reality they know, and support for
the war quickly begins to wain. Vietnam was lost not only on the
battlefield but in the population at home, which altered its initial
support to determined opposition within a half-dozen years. The American
public developed its consensus on the now five-year-old Iraq war -- that
it was a mistake to invade and occupy and should be brought to a close
as soon as practicable -- at least two full years ago, and, for many,
even earlier than that.)
THE ECONOMY AND GREED-ROT
As long as the economy and other major systems propping up the ruling
elites work well, dissent remains at relatively low levels. Such was the
case in the U.S. for a number of years in the CheneyBush presidency.
But the Administration, with an ideology that rested on a greed-is-good
foundation, with no reason to consider "the public good" when making
policy, disparaged and discouraged regulation of the financial system.
The result, in effect, was state-sponsored looting of the treasury and
citizenry by the titans of finance and industry (who, of course, just
happened to be the biggest political and economic supporters of the
Republican Party).
Most of this laissez-faire thievery was carefully concealed from the
citizenry. But slowly the middle-class public came to understand how the
financial system really worked. The scandals involving some of the
largest corporations in America -- the Enrons and WorldComs and Arthur
Andersons and so on -- reinforced ordinary Americans' feeling that, per
usual, they were getting the short end of the stick while they wound up
paying for the resulting social damage caused by the greedy. Clearly,
they reasoned, the CheneyBush government was in cahoots with the
plutocracy against ordinary Americans' interests. An even earlier
example occurred when the taxpayers had to bail out a corrupt
savings-and-loan system. This was the so-called "Keating Five" scandal,
in which five U.S. Senators, among them John McCain, were publicly
shamed for their roles. That scandal had prepared the citizenry for
distrust of the financial and political systems, and maybe even of the
way capitalism seems to work in the real world.
But it wasn't just the more-profits-at-any-price elites that took the
country over the economic precipice. There was almost a universal
mindset among the citizenry, fueled by denial and an exceptionalist
notion of America uniquely blessed by God, that refused to acknowledge
that what goes up inevitably must come down. For nearly three decades,
the U.S. economy (with a few relatively minor glitches) has been in a
bubble of positive movement upwards. It was believed that the stock
market would continue to surge in that direction, that the value of
one's home would continue to rise sharply as a matter of course, and
that low credit-rates would remain in place. But the foundations for
that prosperity were rotten at the core.
WHEN BUBBLES BURST
Reality has a way of bursting bubbles, of bringing us all back to earth.
Cash was plentiful and the housing market was way overbuilt and needed
buyers. Devoid of any serious oversight and regulation,
private-sector
banks and other institutional lenders began offering more and more
attractive introductory mortgages to a segment of the public hungry to
own their own homes as a symbol of the American Dream; contractors and
the Bush Administration joined the hype. The contracts, often arranged
through predatory lenders, were loaded with arcane, small-print caveats
that many either could not understand or chose to ignore, such as how
and when the sub-prime rates would rise.
New home-owners figured they'd be able to refinance when those low
initial rates went up in a few years because the rising equity value in
their home would more than match the new mortgage costs. When that
pattern of rising home values stalled, the economic bubble popped, and
foreclosures began en masse when families were unable to afford the new
mortgage rates.
It's possible that this economic downturn could have been absorbed by an
overall healthy economy, but other things were happening to help create
a perfect storm of financial disaster. For one, greedy Wall Street
investment houses -- again, virtually unregulated by government -- began
inventing all sorts of sketchy derivative instruments ("bundled
mortgages," "credit default swaps"), based on the supposed value of
these real-estate mortgages, and sold them widely both in the U.S. and,
ominously, to banks and other major players abroad. Huge portfolios
worth trillions of dollars based on these instruments were, and for all
we know are still, held by these institutions and individuals and thus
can cause even more damage to the world economy.
These instruments and derivatives were, so to speak, little more than
Ponzi schemes for making quick money, and were hyped by investment firms
and hedge funds to those investors and institutions looking to place
their available money in a steady wealth-producer based on "real
estate." But there was little that was "real" about the "estates"
supposedly behind those financial instruments. And when the foreclosures
and abandoned homes began to litter city after city, development after
development, the whole economic house of cards, built on greed and
denial, came tumbling down.
The above analysis comes to you from someone whose graduate training was
not in economics or finance. (My degrees are in government &
international relations.) However, I think the analysis provides at
least a partial explanation for how we Americans, along with the rest of
the world, wound up in the catastrophic mess we're in today.
Veteran economists tell us that at some point in crash cycles, the
bottom is reached and things start to turn around. I'm sure that's the
case, but that doesn't take away the immediate pain most people are
experiencing right now and will continue to experience for years in the
U.S. and around the world. Despite what might happen on any day in the
stock market, the value of personal assets for hundreds of millions of
people worldwide might well be cut in half or more, governments will
slash essential services, the poor will get more destitute, the middle
class will be pushed further down the ladder with many winding up in
bankruptcy and poverty, even many wealthy folks will take serious hits.
And it will take many years for most societies to climb back out of this
Great Depression pit.
In short, being at the locus of the disaster, we Americans are truly in
for it, and the next few years ain't gonna be pretty. Just ask the
generation that went through the previous Great Depression in the
1920-'30s.
THE POLITICS OF DEPRESSION
Everything changes now, including the current presidential campaign.
John McCain certainly knows that. The chances of his assuming the
presidency have virtually disappeared, since he was a key pusher of the
Republican ideology of deregulation of business that helped lead to the
debacle we're in today. Still, McCain fights on, claiming to rein in the
worst aspects of the hate and fear his campaign has fomented, while
continuing to circulate TV ads and comments, many from his running-mate,
that rest on the fomenting principle that Barack Obama is someone voters
should fear in the White House.
In short, McCain wants to have his cake and to eat it too -- to call in
his rallies for calm and respect while Palin and the other campaign
surrogates and TV ads continue painting Obama as a scary, somehow
foreign presence in the body politic ("palling around with terrorists,"
"not one of us," etc).
A President Obama would certainly know that his administration would be
financially unable to carry out many of his promised projects and would
be able to do little more than preside over a greatly injured economy
and start to repair the damage. Of course, an Obama election victory
assumes that Karl Rove and his dirty-tricks minions can't successfully
fiddle enough with the election totals in a Democratic landslide (and do
you believe they won't try? what would dissuade them since they've never
been punished for stealing earlier elections?), and also assumes that
Bush would not attempt to declare martial law and rule by "emergency"
decree during this current financial crisis.
In short, America is now paying the price for decades of denial, greed
as state policy, and an unwavering adherence to the now-discredited
philosophy of governmental deregulation. How we begin to climb out of
this pit of Depression will determine the viability of the continuing
American experiment.
Copyright 2008, by Bernard Weiner
Bernard Weiner, Ph.D., has taught
government & international relations at universities in California and
Washington, worked as a writer/editor at the San Francisco Chronicle for two
decades, and currently serves as co-editor of The Crisis Papers (www.crisispapers.org).
To comment: crisispapers@comcast.net .
|
