The Federal Government has now assumed the role of senior partner in the economy. We’re not just talking the usual tax breaks, bailouts, subsidies, loans, and shelters provided for the corporate sector but the active involvement in commanding huge sums of capital and becoming the chief stockholder. The financial system has been turned over to centralized political planning; and has not only been met with necessary approval from investment firms but has also prompted some to even refer to a “paradigm shift” having taking place, an admission that should have everyone anticipating what actually privatizing the profits and politicizing the losses will actually come to mean.
Remember that the free-market libertarian panacea was always in denial of the implicit reliance of corporate power on government (in)action, and the various preferential treatments given to high finance which inevitably created the “welfare state for the rich” rallying cry. This past week however has only made it glaringly evident that state capitalism has sealed the deal and is here to stay. The alleged “paradigm shift” to thus be debated is whether we want merely a fusion of Thomas Hobbes and Max Weber through increased bureaucratic planning with some idolatry of the state thrown in for good measure, i.e., more of the same but hopefully kindler and gentler, or state actions which includes the kind of political accountability and democratic empowerment these canonical political figures – not incidentally – only precluded.
For Benjamin Barber,
the way out lies not just through technical fixes or pumping public money into failing banks and insurance companies. It means reasserting our rights as citizens to regulate the market. It means insisting we will not support the new 'socialism of risk' unless we also share in the profits (that's another way to reduce taxes!)
In short, it means consumers must become citizens again, reclaiming their democratic right to fiscal transparency, political oversight and market regulation. It means the public sector must come back not just in the default mode when the private sector fails, but actively and constructively so that the public weal takes precedence over private interests in good times as well.
Presently the political debate is mired in the slogans and poses of electioneering. Regardless of who you vote for it is important to know however the depth of the problem which many of us have been trying to emphasize. Just consider, for starters, how slow and almost irrelevant McCain and Obama have been this week when compared with the frenetic wheeling-and-dealing done by Paulson, Bernanke, et. al. The political discourse is utterly behind real developments. Indeed the nature of the problem today is encrusted corporate power which has not only dominated every facet of our existence but steadily paralyzed and corrupted the political culture; it is consistently anti-democratic, and it breeds powerlessness. A powerful state with an embalmed democracy at its side is only doomed.
Remember the words of George W. Bush who said, "I think the best part of this job is to set in motion big changes in history...its unbelievably exciting to be in a position to do that." The truth is that crisis sleeps with opportunity but too many people want to keep it a secret.