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The Right Takes The Crises As An Opportunity

To see Simon Johnson, an ex-IMF functionary with a critical and pessimistic view on recent capitalist excesses in The Atlantic was welcome but not unexpected. To read the first few graphs of an op-ed by another ex-IMF functionary with a similar basic analysis on the neo-conned op-ed pages of the Washington Post was, at first, a surprise. But deeper into the piece it turned out to be as neo-conned/neo-lib as most of the other stuff WaPo publishes.

It is a typical case of using the correct analysis of a crisis to then, in disguise, present a solution that applies the same mindset and tools that brought up the crisis in the first place.

Desmond Lachman: Welcome to America, the World's Scariest Emerging Market

I still recall the shock I felt at a meeting in Russia's dingy Ministry of Finance, where I finally realized how a handful of young oligarchs were bringing Russia's economy to ruin in the pursuit of their own selfish interests ...
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Over the past year, I've been getting Russia flashbacks as I witness the AIG debacle as well as the collapse of Bear Sterns and a host of other financial institutions. Much like the oligarchs did in Russia, a small group of traders and executives at onetime venerable institutions have brought the U.S. and global financial systems to their knees with their reckless risk-taking -- with other people's money -- for their personal gain.
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We delude ourselves that our banks face liquidity problems, rather than deeper solvency problems, and we try to fix it all on the cheap just like any run-of-the-mill emerging market economy would try to do.
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[W]atching Goldman Sachs's seeming lock on high-level U.S. Treasury jobs as well as the way that Republicans and Democrats alike tiptoed around reforming Freddie Mac and Fannie Mae -- among the largest campaign contributors to Congress -- made me wonder if the differences between the United States and the Asian economies were only a matter of degree.
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Up to here the argument seems fine - even populist and consistent with (and probably copied from) the Johnson piece and in my view correct.

But now follows the real intend and what the whole piece is constructed to aim for:

[I]nstead of laying out a realistic plan for increasing our national savings, we choose not to face up to the Social Security and Medicare crises that lie ahead, embarking instead on massive spending programs that -- whatever their long-run merits might be -- we simply cannot afford.

The right wingers are using the crisis for an attack on the few basic social programs the U.S. has. They of course never admit that these programs were created in the first place to attenuate the effects of such crises. They also have nothing to offer to replace these programs but deep poverty and early death for all people more poor then themselves.

The saving rate is already increasing quite fast. Social Security in the U.S. is financially well. Better indeed than equal programs in other countries. Alternatives like pension funds are doing much, much worse. Medicare/Medicaid financial problems could be solved with some decent price controls and anti-cartel action towards the pharmaceutical industry combined with a universal insurances scheme where everyone has to pay and gets. A well regulated single-payer health care system would also go a long way to better the international competitive situation of U.S. industries.

But the moneyed class would not like that at all. It would make it harder to fleece that money. Their trick now is to use this crisis as an opportunity to rob the masses even more than they are already doing. Imagine all the money going towards social security today being redirected towards Wall Street and the medicare/medicaid money to private insurance looters.

There have already been several attempts like this. Bush put a lot of energy into his Social Security reform campaign. It did not work back then. But now the crisis gives the wingnuts another chance. Expect many more of such op-eds. The correct analysis, recognizing the crisis for what it is, but with solutions that would only make it bigger. These will not only come from the far 'republican' right but also from the usual death eaters in the democratic caucus.

This WaPo Sunday op-ed is only preparing the ways.

The right sees the crises as an opportunity. They are right to do so. It is one for the left too. Let's use it.

Posted by b on March 28, 2009 at 20:42 UTC | Permalink

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