The Triangle

Issue date: 10/10/08 Section: Ed-Op

Media Credit: ProPublica

Much has been said and written about the $700 billion government bailout. It has been a front page topic in our daily newspapers for some time now. A great deal of TV airtime has been spent analyzing, discussing and reporting the latest news on what the legislators and the executive in Washington are doing and not doing about the bailout. So far, the American people have been told by the analysts and reporters that the causes for this economic problem - so serious that it requires government intervention - were unwise investment decisions, speculative financing and greed by the denizens of Wall Street.

Until now, no one - especially not corporate mass media - has informed the American people that the greatest government bailout in the history of America demonstrates unequivocally that the 30-year-old Reagan (Thatcher) Revolution is over, kaput. Their organic-intellectual mentors, Friedrich von Hayek, and Milton Friedman were flat wrong. Neo-liberalism, their "Washington consensus" rationality of governing that shrank the role and activities of the state to a size that Grover Nordquist could "drown in the bathtub," that expanded exponentially deregulated and free markets, free trade, free flow of finance capital, that "extended the rationality of the market … to areas that are not exclusively or not primarily economic", that repealed the Glass-Steagall Act of 1933, has ended in a global economic catastrophe of tsunami proportions.

The result? The old rationalities of governing, Keynesianism and the Welfare State, are back. But they are back with a significant twist. This time, Henry Paulson (who owns $634 million in Goldman Sachs stock), Ben Bernanke, Christopher Cox and "the man in the White House" are not traitors to their class. On the contrary, the government bailout they favor is nothing more than the mechanism necessary to return the status quo ante.

Now, with the government as their adjunct providing taxpayers money, they want to return to the well-lubricated economic machinery that has denied the American people a strong national health care program, that has denied American families paid family and medical leave, that gave corporate America NAFTA, that took jobs from Americans and exported them to countries offering cheap labor costs under their system of a globalized economy, that gave rise to an enormous concentration of wealth. According to Doug Henwood from the Left Business Observer, in 2005, "the wealthiest one-tenth of 1 percent of individuals in the U.S. enjoyed about the same amount of income as the bottom 50 percent - which is to say, in a country of almost 300 million people, the 300,000 at the top collectively earned as much as the 150 million people at the bottom." And year after year, the U.S. has had the highest Gini Coefficient - a measure of income inequality - among Western industrialized nations.

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