Greetings Economists,
On Sep 28, 2008, at 6:22 AM, Doug Henwood wrote:
So how does this apply to the Scandinavian banking crises of the
early 1990s? Did they displace it onto the U.S. 15 years later? Or
Greenland and we all missed it?
Doyle;
Or Argentina, or Turkey, or Russia, on and on. This indicates a
global aspect of the crisis rather than a focus on just U.S. systemic
problems. The obvious answer is that until it reaches the U.S. it is
regionalized problems ignored so long as it is contained. Sweden did
a bailout, Russia used oil, different solutions, different places in
time.
That also indicates some influence on the current systemic crisis.
Politically after these regional problems, it was difficult afterwards
to maintain the facade of neo-liberal financial ideology locally.
Russia is a painful example for the U.S. now. Sweden not surprisingly
used government bailouts. In the U.S. though the impact is to more or
less to jettison neo-liberalism. However, the complexity of the
situation is clear also. We see the reformist Obama returning to the
same old neo-liberal orthodoxy. I.e. money and guns make the U.S. big
and strong like Popeye's spinach.
And it seems that the global aspect of the financial crisis also
implies a distinction with the regional and national crises that
proceeded this blowout. However difficult for those in power in the
U.S. to see the hand writing on the wall, this is the end of the road
for neo-liberalism. Primarily no region wants to go through that
again, and because all can see, even at the center of power it is not
very appealing to go through austerity programs just because we need
to bailout banks that profited off neo-liberal orthodoxy.
I think it accurate to say the reformist wave is winning the election
process so far. And surprise the resistance to that is fairly
strong. In fact Obama seems quite content to mouth empty phrases
about reform and give obedience to orthodoxy. But events are driving
the election, after eight years of Bush it is quite difficult to run
orthodoxy in any form. Hypocrisy can not forestall facing facts now.
This orthodoxy has weakened the U.S. itself.
Clinton's switch to working class rhetoric amounts to showing off how
weak orthodoxy has gotten in the whole U.S. Surely a lot of workers
feel patriotic to what has worked and kept them happy, but that grows
smaller all the time. I suspect as worker anger over the evaporating
good life takes over, it would be unwise for any democrat to sound too
workerist. You can not promise that neo-liberals can solve a crisis
that has weakened the U.S. in a serious manner by doing the same old
same old. I mean class prevails now in ways that 1973 did not what
with it's sixties style cultural hopes broken in the hard lessons of
recession without political power. Just like 1973, an economic event
turns off a switch, this time our contemporary neo-liberal capitalist
gets caught fighting something stronger than the ideology. Then post
1973, cultural change went on an on in the endless culture wars of the
last 30 years. Now the dribbles and drabbles of orthodox neo-liberals
gradually exhaust itself against the tide rejecting 'free market'
capitalism. Creative destruction indeed.
thanks,
Doyle Saylor
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