Once again, the willful blindness of the free-market worshipers is absolutely astonishing.
If you are going to have a market-based economy, you have to assume that people will continue to consume. A lot.
But what if people have no money?
What if the cost of living and wage increases do not keep up with each other? Like, say, what if the price of oil quintuples in a nine-year-period, affecting the costs of essentials like gas and food, but real wages either increase only slightly or actually DECREASE? And then what if your ARM mortgage payments suddenly go from $200/month to $2,500/month? And then what if you don’t have health insurance and your son gets hit by a car? And then what if your company is “downsized” and you lose your job?
Let me ask the free-market orthodoxists – like Alan Greenspan – how’s that gonna work out for us?
“The crisis will leave many casualties. Particularly hard hit will be much of today’s financial risk-valuation system,” he wrote.
[Translation: No, mortgage companies, it’s not safe to loan $800,000 to people who make $40,000 a year. No one could have anticipated…]
While insisting that current risk management models and econometric forecasting methods remain “soundly rooted in the real world,” he said risk management can never be perfect.
“It will eventually fail and a disturbing reality will be laid bare, prompting an unexpected and sharp discontinuous response,” Greenspan said.
[Translation: The shit’s gonna hit the fan.]
He added, however, that he hoped one of the casualties from the worst U.S. financial crisis since World War Two would not be the spirit of broad self-regulation within financial markets.
Well, OF COURSE. Don’t let the fact that deregulated markets led to this crisis cause us to, um, regulate the markets!!!
Look. The fact that we’re even listening to this man on finances is a symptom of our national illness. It’s like coming to the doctor who gave you heart attack medicine when you had arthritis, and expecting him or her to suddenly be competent to treat your problems. We simply cannot give up the idea that trickle-down economics works.
Why can’t we? Well, because if we did, we’d have to admit that “Fuck you, I’ve got mine!” is not a basis for society, and that yes, we ARE responsible for our neighbors.
I believe that fundamentally, we Americans are a generous people. But we also have our beloved myth of American self-sufficiency, which has been metastasized by corporatists into this malignant tumor of libertarianism. It has caused us to build walls between ourselves and our fellow Americans. The poor are poor because they’re lazy. There is no more institutionalized racism in this country. Everyone has health insurance through emergency rooms. Taxes are “stolen money.” You get the idea.
The truth that very few in the punditocracy will admit even now, is that we need the New Deal. We need it all the time, and it is the only basis on which our democracy will work. We need to invest in people, not corporations. We need to provide a social safety net. We need to invest in the arts and in education. We need to rebuild our infrastructure and invest in alternative energy. We need to leave Social Security alone.
Sorry, conservato-fascists, your way doesn’t work. You can take your ball and go home now.
The adults are taking over in 2009, and we will clean up your mess yet again. But don’t expect us to let you be in charge of the playpen until you’ve grown up.
We’ve learned our lesson, and this time, I hope it sticks: or we may never recover from the NEXT Republic Great Depression.