Another day of WTF as everyone tries to figure out what this complete financial and political debacle means for their homes, their jobs, and their pensions.
A bit of historical insight from Howard Fineman which some of you might have missed in yesterday’s welter of bad economic news: Bailout Ushers in the Era of Obama
Fineman has articulated clearly something I’ve been suspecting all along since the amazing bailout debacle of the last few days: this is the death knell of Modern Republicanism.
Even if Sen. Barack Obama loses the presidential election – and of course he may – the playing field of our politics now has shifted seismically in his philosophical direction.
The era of cowboy capitalism has died, largely of self-inflicted wounds. Who knows what’s coming now? I do: A new era of tight business regulation and government intervention in the markets.
For now, and perhaps for many years, there will be no going back.
Fineman then traces back the beginnings of Modern Conservatism to Reagan, Hayek and the contention that Government intervention only made things worse.
These laissez faire chickens are now coming home to roost. It is Wall Street, which has cashed in on a tide of deregulation, that is now coming cap and hand to the government. The hypocrisy is stunning. As Nouriel Roubini, who foresaw this whole crisis, writes:
This is again a case of privatizing the gains and socializing the losses; a bailout and socialism for the rich, the well-connected and Wall Street
This has many echoes to me – though writ on a much larger scale – of the crisis of British Conservatism after the downfall of Thatcher. The Conservative Party was then a coalition of two forces: social authoritarians who opposed all the liberal expressions of what they called the ‘permissive society’, and economic libertarians who preached a Hayekian view of small government and minimal intervention.
For a while they stuck together, but as soon as their interests diverged (especially in the sovereignty crisis of how to to pursue Britain’s role in the European Union) the coalition fell apart catastrophically. The Conservatives went on to lose the next three elections
I see a different but parallel version of that in the ideological and fiscal bankruptcy of the Republican Party today. The bizarre shotgun marriage of McCain and Palin is one expression of it. The tumultuous and unprecedented revolt of House Republicans against the plan of their President is another.
I see a long term collapse and near civil war among these divergent forces: but I’m a Brit watching from afar – though subject to the same credit crunch and potential depression as you all. Do you see the same thing as I do?