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Tuesday, September 30, 2008

The Return of the State

posted by on September 30 at 10:37 AM

Bush, by the way, is a Republican. He may not get his calls returned these days, but he is a Republican. That would be the same party McCain belongs to, and McCain, of course took credit for passing the bill that did not pass, after non-suspending his campaign and non-leading on the bill’s progress. In fact, he not only screwed up his leadership photo op, he also managed to encourage the wingnuttiest of the House Republican wingnuts (it’s socialism! Socialism, I tell you… like the Post Office, highways and Medicare!!) How great is that?
Yes, this is precisely why I agree with the bailout. Its passing will bring to an end 30 years of unhindered neoliberalism. In the way the war in Iraq collapsed the neocon project, the housing crisis ultimately collapsed the neoliberal project. The bailout is the bullet in the heart of an ideology that marks the state as a burden and the market as the solution to all our problems. Globalization will for now not be about “the withering of the state,” but the coordination of a network of private interests (civil society) managed and stabilized by an international system of state powers. Down falls Wall Street, the neoliberal utopia; up rises the state and the socialization of financial planning. I can’t believe I’m alive to see this.
Taxpayers should wake up the politicians and ask them to tell Wall Street: “We want the same deal Warren Buffett got.” The Omaha billionaire announced he is playing White Knight to Goldman Sachs by investing $5 billion in the endangered investment house. What a big-hearted guy. Buffett is an old-fashioned capitalist who invests in companies for the long term and I am a big admirer. But Warren Buffett did not get to be a billionaire by committing public-spirited acts of charity. He plays to win.
Yes, the socialization of winning is possible for the first time in three decades.

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I was actually having a similar discussion with a friend yesterday. We share your disbelief.

Posted by kid icarus | September 30, 2008 10:45 AM

Welcome to the age of Commie Capitalists.

Posted by crazycatguy | September 30, 2008 10:46 AM
The bailout is the bullet in the heart of an ideology that marks the state as a burden and the market as the solution to all our problems.

Why would you think that? The bailout comes with no meaningful oversight. The capitalists will just take the money and run, and nobody is going to take any ideological conclusions away from this.

Posted by Judah | September 30, 2008 10:52 AM

Yes, because extremely backasswards socialism has always produced such excellent results in the past!

Never thought I'd say this, but why don't you stick to writing incomprehensible gibberish about architecture?

Posted by raisedbywolves | September 30, 2008 11:08 AM

Like #3, I'm cornfused by your support of the bailout, at least as explained here.

It sickens me, frankly, that everywhere in the media yesterday's vote is referred to as a "failure to pass," rather than a "defeat" of the very bad bailout bill. Headlines should say "Bad Bill Defeated!" It is only because of that defeat that we have the chance, now, to craft a better bill that will actually help.

The media companies, which are all heavily dependent upon the health of the stock market (owned as they are by Vivendi Universal, AOL Time Warner, Disney, News Corp, Viacom and Bartlesman) are portraying this victory as a failure, or trying to. But it wasn't the Republicans who killed that bill. It was angry American citizens who wrote and phoned their Representatives.

Let's not forget that. And let's stop supporting a bad bill. Instead, start demanding an effective one.

Posted by doctiloquus | September 30, 2008 11:16 AM

Is "the bailout" the specific bill that failed in the House yesterday? Or is there a better bill perhaps on the way that might perform more of the function you outline? I hope so.

Posted by tomasyalba | September 30, 2008 11:16 AM

so the people finally seize power and their first triumphant action is to buy $700 billion of overpriced securities from Wall Street salespeople?

I think the System just might let the people get away with that one.

I think the bailout is no new socialism, it's more of the usual socialism (applying only to the rich and politically connected).

Posted by spock | September 30, 2008 11:34 AM

Charles, if you think the past 30 years consisted of free market capitalism, you are gravely mistaken. The trend of socialism for Wall Street and free markets for the rest of us is nothing new. Please go read some Chomsky. Or Nader.

I'm really glad you've got opinions about the bailout formed by some sort of hazy ideology and understanding of the world, but thank god you're not in office.

Posted by BobHall | September 30, 2008 11:36 AM
Posted by You_Gotta_Be_Kidding_Me | September 30, 2008 11:40 AM
Talk of Armageddon, however, is ridiculous scare-mongering. If financial institutions cannot make productive loans, a profit opportunity exists for someone else. This might not happen instantly, but it will happen.
This guy may be from Harvard, but he's a stone-cold moron. Take a look at what happened to Japan during their "lost decade". This guy's philosophy, like most Libertarians', can be summed up as "pain is good for you, if you are other people".
Posted by Fnarf | September 30, 2008 11:51 AM


The lost decade was a direct result of the Japanese Government propping up banks that should have been allowed to fail.

The Japanese Central Bank set interest rates at approximately absolute zero. The easily obtainable credit that had helped create and engorge the real estate bubble continued to be a problem for several years to come, and as late as 1997, banks were still making loans that had a low guarantee of being repaid. Loan Officers and Investment staff had a hard time finding anything to invest in that would return a profit. They would sometimes resort to depositing their block of investment cash, as ordinary deposits, in a competing bank, which would bring howls of complaint from that bank's Loan Officers and Investment staff. Meanwhile, the extremely low interest rate offered for deposits, such as 0.1%, meant that ordinary Japanese savers were just as inclined to put their money under their beds as they were to put it in savings accounts. Correcting the credit problem became even more difficult as the government began to subsidize failing banks and businesses, creating many so-called "zombie businesses".

Posted by You_Gotta_Be_Kidding_Me | September 30, 2008 12:00 PM

The most straightforward and likely the only effective solution would be for the government to buy new shares in troubled banks, infusing them with liquidity to help them meet their cash flow issues. We aren't going down that road because congress wants to butter Wall Streets bread, not own it's meat, or something like that.

Posted by kinaidos | September 30, 2008 12:29 PM

I would be more hopeful regarding the demise of neoliberalism if two of its main proponents from the Clinton administration, Robert Rubin and Laura Tyson, were not on Obama's economics team. Rubin was a prime mover behind the banking deregulation that has now come home to roost and shit all over us, and Tyson could not ship jobs overseas fast enough. With Democrats like these, who needs Repugnicunts?

You would think that Howard Dean would remember his own line about "the Democratic wing of the Democratic Party" and help recruit some economists who belong to it. Robert Reich? Paul Krugman? ANYBODY BUT RUBIN!

Despite the manifest failures of deregulation, the Republicans are not going to stop pushing for it (or Social Security privitazation). The least the Democrats could do is stop helping them and start loudly and publicly calling bullshit on it. Unfortunately, most of them are too addicted to corporate fund raising to promote any freaky liberal shit. With his ability to raise money from the Netroots, Obama should set a higher standard, but sadly is not.

Posted by Buck | September 30, 2008 12:58 PM

I keep hearing that credit has siezed up. On the other hand I keep hearing Americans owe too much debt. We're a consumer nation so credit must be easy. We're too sucked in by sales gimmicks and get ourselves into ridiculous amounts of debt. Huh?

Posted by Vince | September 30, 2008 1:40 PM

vince... i'm not sure i catch your point. credit can seize up and there can be too much debt at the same time. not only that, there are different kinds of credit and debit. not all credit is seized.

Posted by infrequent | September 30, 2008 1:54 PM

It will be soon.

Now is not a good time to be late on your credit card payments.

Posted by Fnarf | September 30, 2008 2:16 PM

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