Yesterday the new Secretary of the Treasury presented an outline of the Economic Rescue Plan, and presented it in the general context of the Obama's administration's strong criticism of the banks and brokerage houses and their auxiliaries aka finance capital. And the stock market went down sharply. "Wall Street," "the Market," and other inanimate and metaphysical entities, were "disappointed" in the report, "upset" that it wasn't "specific enough," that it has not a "clear" plan.
What is going here? My educated Marxist speculation is that Wall Street wants what it has wanted in one form or another from the federal government through modern history, what one critic called during WWII "socialism for the rich," that is, benefits without responsibilities.
They got that in its fullest sense in the Reagan-Clinton-Bush era, when finance capital and capital generally got "deregulation" and an army of military and other subsidies along with guaranteed "bailouts" from federal agencies when their speculative baubles collapsed. When I outlined the concept of "Socialism for the Rich" in a class I was teaching during the Reagan era and asked students to try to define it in their own words, one student caught the principle brilliantly when she said " do everything for me. Don't do anything to me." That sums it up perfectly, then and now.
There are criticism's that can be made of the Treasury proposals. Although it is really a symbolic issue (albeit an important one) the cap on executive compensation for banks and other firms receiving rescue funds should be much stronger. While it is good that the Obama administration, raised the issue(for the first time since Franklin Roosevelt unsuccessfully proposed a $25,000 salary cap during WWII) the Treasury's retreat on here can be seen as a small setback. More importantly, the Treasury is not advocating the creation of government authorities to supervise finance capital's use of rescue plan money, hoping to use various incentive plans to prevent both capital hoarding and other misappropriations of funds.
But I doubt that those reasons are the causes of finance capital's criticism, reflected in the sell off yesterday by large institutional "investors" or multi-billion dollar funds, those who shape the daily prices of stock and the flow of capital. Nor do I believe that they want an item by item central plan over a definite period of time (something like a a state capitalist version of the old Soviet Five Year Plan, which would really make them accountable). What they want is what they had under Reagan and Bush co-existing with the fiction of regulation.
What upsets them I think is those parts of the Treasury's report that suggest that aid to student loans, cars loans, home loans, might be radically expanded from the 200 billion previously proposed. What finance capital wants is "caps" on spending that benefits workers and consumers, caps to "restrict deficits" while providing capital without strings to banks and other financial institutions. This would permit them to tighten the screws on workers and consumers and also profiteer with greater interest payments (ironically, one should remember those in the U.S. and internationally who are asking for "bailouts" that must increase deficits are largely those who collect the interest on the deficits).
The Obama administration is just beginning and it is beginning in very encouraging ways. But it will, as any Marxist would tell the President, have to develop dialectically through its conflicts and confrontations with the banks and corporations of the system that it is trying to save, just as the New Deal government had to move after its first two years to support far -reaching legislation (social security, unemployment insurance, the Wagner Act, the WPA, the National Youth Administration, minimum wages and the forty hour week) to advance the interests of the working people against the banks and the corporations. We should all remember that the capitalist class in the first years of the New Deal used the National Recovery Administration to set up company unions and price fix in their interests, and Agricultural Adjustment Administration subsidies both legally and illegally to drive tenants and croppers off the land,. T he leading sections of capital saw the new administration as a "temporary" expedient to deal with the depression, an expedient to be gotten rid of once the emergency rescue legislation for capital had stabilized the situation. I am sure that the leading sections of capital today see the Obama administration in a similar light.
Far more direct regulation of capital is in my opinion necessary. A better redistribution of public investment to aid working people is also in my opinion necessary. But my and any non ruling class individual's or group's opinions matter next to nothing without mass organization and consciousness around these issues. Through both its inevitable conflicts with finance capital and the growth of such organization and consciousness, the Obama administration should and hopefully will come to similar conclusions in the months ahead.