Thursday, September 18, 2008

"Relief for the Greedy, Not for the Needy"

by Norman Markowitz

Mass media is talking about Wall Street "greed. "McCain and Palin, the candidates of the party that Wall Street has supported in virtually every election at least since 1884 are also denouncing "greed." Rightwing economists are 'accusing" the Bush administration of violating the sacred principles of free market policy, going "further" than any Democratic administration, and sending bad signals to the rest of the developed world, which in the past it has led toward a "return" to the holy land of "laissez-faire" capitalism, away from the captivity of government regulation.

What is really happening. Barack Obama's comment that this far-reaching crisis is the final verdict on an economic philosophy which has completely failed is a good starting point to understand the present moment. The U.S. government and European governments are pouring hundreds of billions of U.S. dollars or their Euro equivalents into deregulated banks and brokerage houses and the insurers of those institutions. While this may be necessary to prevent a rapid global depression (since the "free market" is not now nor has it ever been "self-correcting." Only, I would say, a lunatic or a "neo-liberal" ideologue would contend that leaders should let the market take its course, "ride out the storm."

But, the sort of state intervention that we are seeing today is intervention from the top in order to save the top, the sort of intervention that even Herbert Hoover accepted in 1932 when the Reconstruction Finance Corporation was created to loan money to banks and other institutions faced with collapse. It is, as Franklin Roosevelt said about a different issue during WWII, the attempt by the conservative coalition in Congress to oppose a program of progressive taxation to pay for the war, a policy of "relief for the greedy, not for the needy." It is also a continuation of the sort of policies that the Reagan administration was compelled to enact when they "bailed out" the Savings and Loan industry from the disastrous speculative collapse that their deregulation policies brought about.

As Marxists we must say over and over again that capitalism as it develops is about the creation of monopoly for private profit, about the use of the state to subsidize the activities of the capitalist class as completely as possible, subsidizing speculation and bailout out failure. According to mass media, the Bush administration has already pumped in nearly half a trillion into the system (near about one year of military industrial complex budget expenditures) and few are talking about comprehensive "re regulation," action to deal with the unregulated global hedge funds, reviving long buried concepts like "excess profits" as part of a policy that would connect progressive taxation to a general regulatory policy that would punish rather than reward predatory speculation.

As Marxists we see the crisis as structural, long-term, and not resolvable ultimately under capitalism, which was the position that Marxists took in the Great Depression of the 1930s.

But that does not mean that we are the left equivalents of the free marketeers, waiting for the collapse and the revolution as they wait for the revival if the "free market" remains "free." We understand that state fiscal policy, taxation and regulation are necessary to protect the interests of the working class. The policies we have advocated in the past are very different from those which the representatives of the capitalist class have advocated and continue to advocate. When they were implemented they were generally successful. In an updated form, they remain vital today, although of course they are not necessarily the only short and medium term solutions.

We support what in the depression was called a "tax on wealth," meaning a serious program of taxing corporate capital and wealthy individuals and families through taxes on high incomes, investments, business transactions, for the purpose of subsidizing the working class in the form of employment and social welfare. We also as in the past, see public ownership and control of sections of the economy, including partial or complete nationalization of banking as a serious option. We reject the "trickle down" theory in all of its expressions and start with the principle that state intervention in the economy is necessary to save the working class and that state policies and subsidies should be centered on the working class and on those sections of capital whose policies expand working class employment and purchasing power.

On that basis we can begin to work with liberals and progressives and influence them to move in that direction. On that basis we can provide masses of frightened and "hungry" working class people with serious nourishment for their understanding, not the junk food that mass media is providing, the choice between "free markets" and capitalist bailouts, which is like a choice between Big Macs and Whoppers.