Friday, May 01, 2009

Lemming time

Ian Williams: Don’t bank on lemmings – their dogma has had its day
Tribune April 13, 2009

THE current economic crisis demands metaphors, similes, and similar poetic tropes. It is just too complicated for simple rationality.

The election of Barack Obama as President of the United States has been like changing the captain on the Titanic – after it had hit the iceberg. This is still good news. It will still be a chilling experience when we hit the icy water in our lifejackets and watch the rescue vessels pick up the first-class lifeboats first. However, before we would have been locked below decks as the water rose, but passengers in steerage might now have access to the lifeboats the previous skipper would surely have denied us.

Obama has implemented an impressive array of reforms since he took office. He has shown ingenuity, in trying to stop the ship of state from sinking. Nevertheless, on some issues, such as healthcare, the financial industry and the Middle East, he has been patching up rather than reforming.

The global and US economies are currently running under some world version of a clunky Windows programme: in time, the patches such as those that Obama and the G20 are downloading overwhelm rather than repair the already wobbly underlying structure. There really comes a time when the umpteenth crash should persuade you to buy an Apple Mac.

However, not unlike some sections of the Labour Party, Bill Clinton-era officials on the financial side of his administration work on the assumption that the way out of the crisis is to gain the “confidence” of bankers. Since these are the bankers whose Panglossian optimism led them to stampede over the cliff during the Savings and Loans scandal, and then the property boom and credit crunch, one would have thought that confidence was easily engendered in a breed so susceptible to its more extreme forms.

But while neo-liberals see a “moral hazard” in over-generous unemployment pay, their “moderate” and “rational” wings – the likes of “new” Labour and the “new” Democrats – see the only way to get the lemmings back up the cliff is to stuff their ravenous maws with taxpayers’ money. From a banking background themselves or reflexively responsive to bankers, they see those lemmings as an essential part of the process – and their huge greed as an essential cost of keeping the economy moving. In contrast, frothing conservatives are now mounting an assault on Obama and his policies for fighting the crisis and shamelessly blaming him for the financial meltdown that he inherited.

Even more shamelessly, conservatives are among the most intemperate complainers about the US administration giving money to institutions whose executives have been rewarding themselves in the manner to which they had become accustomed for the past 20 years under both Republican and Democratic governments.

It is clear that, with their customary unconcern for what would pass for patriotism anywhere else, the rabid conservatives would rather Obama failed than succeeded. If we were charitable – as they never are – we might allow that some of them may really have genuine concerns about government interference and deficits. However, many such liberal impulses are over-ridden by the way that conservatives managed for eight years to mute their indignation of an administration that ripped up the constitution and bankrupted the country in a war of aggression.

Forget the unparalleled tax handouts to the rich under George Bush and let amnesia descend on the scrapping of effective regulation of businesses, whether on financial, health and safety or environmental grounds, the Republicans sense the popular mood and want to ride with it to re-election. If this seems implausible, remember that one sitting Republican Senator owed his election seven years ago to a campaign branding his paraplegic war veteran Democratic opponent as anti-military.

Apart from Obama’s immediate advisors, the cloth ears of a significant proportion of Democrats are restraining attempts at the root-and-branch reforms that events so clearly demand. So-called “moderate” legislators have learnt nothing. Dependent on business donations, they are fighting to defend corporate malpractice and oligarchic greed against the upsurge of popular anger that the Republicans are exploiting.

This has led to the bizarre consequence that Obama administration finance experts consider it more acceptable to throw $1 trillion of taxpayers’ cash at bankers with a recidivist record of running off with clients’ and shareholders’ money than to take the banks into effective public control, let alone, horror of horrors, public ownership. Nationalisation is not a panacea – but neither is it guaranteed poison as, in the British context, the failure to take the railways back into public ownership has been. On a large scale, faced with the chaos achieved by the visible hand of the market in the collective till, Obama should not deprive himself of any potential weapon for his arsenal – certainly not on ideological grounds dictated by those whose dogma caused the debacle.

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