Outstanding View on Why We are in the Economic Crisis

...From the blog of accomplished journalist and author Jon Talton, entitled Rogue Columnist, posted on Friday 24 October:


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Who to Blame
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So Alan Greenspan is shocked, shocked that gambling was going on in the casino that he and his fellow radicals made of the capital markets. In his testimony before Congress Thursday, he talked about how stunned he was that the markets weren’t self-regulating, that speculation and greed led to this disaster, which he likened to a “once in a century” financial tsunami.
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But this is no act of God. The ongoing financial collapse is the direct result of the deregulation, trade, privatization and tax policies enacted by Alan Greenspan and the other rigid ideologues of the Republican Party over the past quarter of a century. The longtime Fed chairman is a disciple of the author Ayn Rand, whose advocacy of a brutal individualism has been turned into a devil-take-the-hindmost reality that would make Atlas blush.
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It’s important for the American voter to understand this. The collapse of their savings, the deferment of their retirement dreams, the loss of their homes, the decline in their earnings, the elimination of their jobs – all has been the result of very conscious policies. They were promised an "ownership society," but, as Barack Obama said, the reality is that most Americans are on their own.
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If Americans understand this, the election will not be in doubt. And, God willing, the calamity will discredit this extremist philosophy, just as happened in 1932, for decades to come. For this orthodox ideological extremism is every bit as bankrupt and failed as all its false prophet predecessors. Alan Greenspan and company, including former Sen. Phil Gramm, the great – and greatly compensated by the banking industry – deregulator and economic guru to wealthy Republican John Sidney McCain III, are the most dangerous of men: true believers.
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Perhaps this was the inevitable outcome of American conservatism. It had long slipped its ties to the small-town Republicanism of Hoover and Landon, for those small towns themselves were destroyed by the corporate power that conservatism ultimately served. It found a body of ideas from Friedman, von Mises, Hayek (who adamantly said he was not a conservative) and Rand. It found a pleasing spokesman in Ronald Reagan, a magnetic appeal in the free-lunch promise of tax cuts and grievances against government, and an opening in the exhaustion and overreaching of the Democratic, and even centrist Republican, governing consensus that existed until 1980. It then set to work, an ideology controlling the White House and/or Congress for 26 of the past 28 years.
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Yet one must note the irony, or cynical disingenuousness. This “conservatism” paid no respect to the complex and fragile tapestry of laws, institutions, customs, sacrifices, values and history that had organically and pluralistically evolved from the 1930s through the 1970s. Such respect was supposed to set conservatism apart from supposedly dogmatic socialism or idealistic liberalism. Thus, to take one small (!) example in the scheme of catastrophic policies, Gramm oversaw the repeal of the Glass-Steagall Act, the Depression-era banking regulation that had kept our financial system safe and sound for decades. Replacing it was a system beloved by a greedy banking industry and right-wing intellectuals, but with no beneficial foundation in real experience, especially in providing for the common good and maintaining the strong banking system it overturned. So much for conservative empiricism.
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Of course, we were dealing not with conservatives, but radicals who wanted to remake American society.
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Yet this golden-age system that evolved in the mid-20th century, more than any president or single policy, created the strong, admired and opportunity-rich America that so many of us remember. It was an America that made things, that built the greatest middle class in history, and repeatedly had the strength and judgment to free the world from tyranny while avoiding nuclear armageddon. It was built by Roosevelt and Johnson, Eisenhower and even Nixon. It meant good business and good government. It defied any ideological label.
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Without this lost America, you wouldn’t even have David Brooks’ “Patio Man,” the affluent, casual dressing suburbanite with his hatred of taxes and his myriad grievances against the very system that allowed him to rise. Without this America, the right never would have had such a forgiving (for awhile) playground for its empty promises and unsustainable policies. An America starving in the Great Depression, caused by many of the same Greenspanian policies, would have had no truck with this crowd.
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Greenspan and the Republican Party, the party that wrecked America (spread the meme), set out to systematically dismantle this system. It took time to eat away at a largely competent federal government, our schools, our manufacturing base, our hometown companies, our pensions and benefits, our job security rewarding hard work and commitment. They redistributed wealth to the richest and most politically connected, including those who have made fortunes from deregulation, the Iraq war and policies that blocked addressing climate change or our energy future. They moved jobs overseas, snookered average Americans into the Wall Street casino and hid in tax shelters.
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As the Republicans like to say, ideas have consequences.
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The consequences of this 25-year wrecking were cloaked by the old system’s resilience and the emergence of a rich technology economy. They were cloaked by the generational wealth created by the Americans who worked during the old system’s heyday – money still being passed along to the unthinking exurban duhs and ignos who would never vote for a black man. Finally, it was cloaked by a series of bubbles and financial swindles, culminating in the housing vortex that drew in millions of Americans, a great society become a casino society.
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Sure, the world changed too – especially with the rise of China and the emergence of Islamic extremism and peak oil. But this right-wing philosophy, which can explain things only with a tax cut, fear-mongering and labeling their opponents as “anti-American” – was singularly unsuited to address it. Conservatism can’t handle complexity.
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Now the reckoning. America can recover, but only if it understands the damage done – and who did it. And says, “Never again.”
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I have yet to see or read anything anywhere else that so eloquently, clearly, and convincingly explains our national economic circumstances of today and the background why. Talton nails everything dead on.
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