It's both a normative assertion and an empirical observation, that since 1945, no government in an industrial democracy has gotten this wrong for any length of time.
The only partial exceptions I can think of, and I would argue that they are not really exceptions, is the countries under IMF tutelage in the financial crisis of 1997-8, and maybe Russia during shock therapy. And what makes them not really exceptions, in my view, is that they weren't really functioning as democracies with respect to economic policy at the time of the crisis - economic policy was being determined elsewhere - and moreover, when the consequences of following the IMF policies were made manifest, the policies changed - the countries' policies, the IMF policy, and the policy of following instructions from the IMF. As I expect the Post Office to continue to deliver the mail, as I expect the Social Security Administration to continue to send Social Security checks, so I expect the U.S. government to continue to behave, as it has continuously since 1945, as if 1929 has not been erased from memory. As it did during the S&L crisis, as it did in 1987. I am not, of course, saying that everything is fine. There is a lot to be fought over in terms of the equity in the government's intervention, and the failure of regulation that allowed the bubble, etc. in the first place. I'm saying that the possibility of the Big One is remote, because the track record suggests that the government will intervene to stop the Big One from happening, and that the government is quite capable of doing so; and if there is any, very unlikely, prospect of the government not intervening, then people should demand that it intervene, and there is every reason to believe that such a demand will be successful. It might well take more democracy than we have now to reform the regulatory system, to make the intervention policy more equitable. But even the limited democracy we have now should be sufficient to prevent the government from pursuing the policies of 1929-33. It's too obvious. It's one thing to deceive people about Iraq. But you can't hide 25% unemployment, people in the U.S. are not going to tolerate that. On Fri, Mar 21, 2008 at 5:48 PM, Jim Devine <[EMAIL PROTECTED]> wrote: > Robert Naiman wrote: > > I totally agree that ' "reasonable government policy" doesn't fall > > from the sky.' My point was that in industrial democracies, post-1945, > > "Great Depressions" don't fall from the sky either. The last 100 years > > of historical experience suggests that the U.S. could only suffer a > > "Great Depression" if the U.S. government pursues policies that abet a > > "Great Depression." And people should reasonably expect the government > > not to pursue such policies. > > Why? people should reasonably expect the government not to invade > countries like Iraq, too. and people should reasonable expect the > government (and its agents, like the Fed) not to promote gigantic > financial bubbles that require expensive mop-ups and/or recessions. > But these things happen. Part of the problem (at least in the US) is > that the state isn't subject to very much democratic control and has > been able to misinform and disinform the public. > > "Informed democracy" might be a utopian slogan at this point in > history, though things might change in the future. When you say that > "a modicum of informed democracy should suffice" below, is that a > normative assertion, i.e., of what should be? or is it a statement of > fact? > > > > While I am all for a "mass workers > > movement," it shouldn't be necessary for this purpose - it hasn't been > > necessary in the past. A modicum of informed democracy should suffice. > > It's true that the US government (I can't speak of the Canadian one) > doesn't _always_ run the economy into the depressionary ground. There > _are_ other forces (as Patrick and I both mentioned) besides a mass > workers' movement that counteracts the tendency of the > laissez-faire/"feed the financiers" cliques to drive the economy into > disaster. > > One force is that _after_ a financial disaster, the capitalists > themselves usually sober up and turn against the drunken behavior of > the financiers, etc. Bringing in other political forces (the middle > classes) to provide political backing, they impose financial > regulations like those of the New Deal. But that kind of reform > movement was driven ahead by fear that _something worse_ (from the > establishmentarian perspective) would hit, i.e., communism, anarchism, > socialism, or fascism. The social disorder of the 1930s formed FDR's > backbone. > > To ruling out any semblance of a "mass workers' movement," we can > think about the late 1940s & the 1950s in the US, in which the labor > movement was split, was rid of its more militant elements, became > bureaucratized, and thus started its long decline. Absent the kind of > pressure that produced social democracy in other countries, there had > to be a white knight (as it were) to create forces that shore up the > economy. As both Patrick and I mentioned, this was military > Keynesianism, which included such niceties as the GI Bill and the > building of the National System of Interstate and Defense Highways. In > a context where the US was literally "on top of the world," this > stabilized the US economy, along with (in decreasing order of > importance) the financial reforms left over from the 1930s, and a mild > version of the welfare state, a leftover from the mass struggles of > the 1930s. > > Of course, this stable system eventually led to squeezed profits and > stagflation, which (along with fading memories of the Depression) > started the movement to engineer a replay of the 1920s. But that's > another story. > -- > > > Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own > way and let people talk.) -- Karl, paraphrasing Dante. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
