The Upcoming Political Crisis in Washington
David Gordian | March 9, 2009
www.globalresearch.ca/index.php?context=va&aid=12627
Global Research
In recent days we have seen even mainstream Democratic figures as Joe
Stiglitz and Paul Krugman sound the alarm on what seems to be uncertainty in
the Obama administration. Stiglitz, Krugman et al. are following in their
essential critique a path well worn over the past few weeks by a range of
commentators to be found as much among the Austrians as those on the
liberal-to-left part of the spectrum. The fundamental point is, of course,
that it is now clear to all but the militantly unreflective that Obama can -
perhaps - save the Real economy or - perhaps - save Finance (i.e. Bank bond-
and shareholders), but certainly not both. The increasing, but still
relatively gentle, criticism of Stiglitz, Krugman and their ilk is owing to
the fact that it is becoming all too clear that Obama is still unwilling to
engage Finance in what might turn out to be the greatest intramural fight
capitalism has ever seen.
As always with the all-things-to-all-people Obama, it is possible to
sift through his recent speeches and find words of comfort (to those who opt
for saving the economy rather than Finance) even as the Fed, FDIC and
Treasury keep pouring out trillions to Finance. Further, in areas as
critical as civil liberties and Empire, Obama has managed to speak out of
both sides of the mouth in a manner seldom if ever seen in history and - so
far - to avoid the messes that usually come with that. [Examples: the U.S.
upping the ante with Africom's new adventures, with forces moving further
afield into S. Lanka, B'Desh and yet simultaneously getting brownie points
for half a dozen nice words about speaking to Syria; doing all that is
needed - including an unsavory folding before Rove - to maintain all of Bush
43's assertions of unrestricted executive power, while heightening the
rhetoric about a new dawn of American Values; opening to Iran, but
appointing Dennis Ross as the new U.S. legate, etc.]
That the vast majority of citizens of the U.S and of its principal
tributary nations are generally unconcerned about the expansion of liberal
militarism, unless it is unsuccessful or impacts their standard of living
negatively, and have no problems with dictatorial presidential power, unless
it hurts them directly, is evidenced by the fact these and related issues
were non-starters in the last electoral round. The Battle of the Bailout is
different for one brutally simple reason: there is simply too much at stake
for the two rival formations of capitalist power to come up with the usual
compromise solutions that have seen unity in the face of past challenges.
The devil is in the details and while there is a surfeit of sets of
details any one of which makes for fascinating reading, a look at the big
picture as regards the politics of the Crisis is in order. If Finance is
saved at the cost of further trillions of a publicly funded bailout, it will
be in a position of almost unimaginable strength as far as the further
consolidation of ownership of the US (and world) Real economy. Therefore, it
is hard to see how non-Finance capital can possibly be enthusiastic about
allowing these rentier interests to acquire at bargain-basement prices great
swaths of their various industries. At the time of writing, market
capitalization of several Fortune 500 firms is being pummeled by the very
crisis that Finance - as proximate cause, pace Marxist friends - has
triggered. On February 20, 2009, GM, admittedly on the verge of bankruptcy,
had a market capitalization of less than $1 billion. It doesn't take much
foresight to see what the vulture brigade of Finance would make of this
unique conjuncture. Likewise, the sense of outrage that non-Finance capital
feels at the prospect of the crisis being exploited so mercilessly by the
very forces that caused it is an additional guarantor that acquiescence is
just not in the cards. The Rubin Gang around Obama may intone as menacingly
as it likes the promise that failure to bail out Finance will lead to the
end of capitalism and the American Way of Life, but this time it's not going
to fly.
(Let it be noted in passing that such warnings delivered by one side
of the mouth are and will continue to be accompanied by sad songs from the
other about, e.g., the transfer of wealth from poor to rich that has
occurred in the past few decades [engineered thanks largely to the Rubin
Gang itself, of course.])
The contours of the upcoming political battle are not yet clear: each
side will use its surrogate experts, agitators and useful idiots, but the
very gentleness of the Stiglitz/Krugman warnings are an indication that such
as they still hope that mortal combat may be avoided. This is, of course,
pure fantasy. These two groupings, acting in concert, are the force that has
given us a) the national security state, b) multiple armed interventions,
covert and front-door, from Guatemala and Greece, to Iraq, Pakistan and fill
in the blank, all the while building an executive power that Augustus would
have envied, so neither of them are going to be put off by the prospect of
political conflict. More important, they both know the real score: the
bailout of Finance will debase the integrity of U.S. economic and political
power, and by consequence, that of the entire capitalist world that has come
to depend on the U.S. as the last line of defense against chaos. So in that
sense the long-mooted euthanasia of the rentiers is the "right" prescription
and will be seen as so by both the leaders of the "Real" economy and by the
public at large, save those who remain unable to distinguish between Bailout
and Stimulus. But the genesis of the crisis itself reveals the stark truth
about the actual existing balance of power: the controlled bubble-bust
economy of the past two decades is not simply the core engine of growth for
world capitalism; far, far more importantly it is both the result of and the
ongoing reinforcement of the political and intellectual hegemony that
Finance has built up before and during that time.
No hegemonic power has ever willingly given up its position of
dominance and there is no reason to suppose that the forces that paid for
and orchestrated the Washington Consensus through use of the U.S. state -
i.e. the power that backed it up - will be the first, though Stiglitz and
Krugman are to be commended for suggesting that they do just that.
David Gordian is a feature film producer and student of international
affairs, with a special interest in South Asia. He currently lives in
Toronto.
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