What, Me Worry?

No Recession, sez Dear Leader, 'specially if you feed the Ba$e more tax cuts.

WASHINGTON — President Bush said Monday that he was confident the economy would not slide into a recession, and that the American people are strong enough to promote freedom and peace abroad while their hard work fuels prosperity at home.

“I don’t think there will be a recession, and one way to make sure there is not a recession is for Congress to pass a robust stimulus package as quickly as possible,” the president said, urging the Senate to approve the package already agreed upon by the administration and the House...

It's like Naomi Klein says,

Moody’s, the credit-rating agency, claims the key to solving the United States’ economic woes is slashing spending on Social Security. The National Assn. of Manufacturers says the fix is for the federal government to adopt the organization’s wish-list of new tax cuts. For Investor’s Business Daily, it is oil drilling in the Arctic National Wildlife Refuge, “perhaps the most important stimulus of all.”

But of all the cynical scrambles to package pro-business cash grabs as “economic stimulus,” the prize has to go to Lawrence B. Lindsey, formerly President Bush’s assistant for economic policy and his advisor during the 2001 recession. Lindsey’s plan is to solve a crisis set off by bad lending by extending lots more questionable credit. “One of the easiest things to do would be to allow manufacturers and retailers” — notably Wal-Mart — “to open their own financial institutions, through which they could borrow and lend money,” he wrote recently in the Wall Street Journal.

Never mind that that an increasing number of Americans are defaulting on their credit card payments, raiding their 401(k) accounts and losing their homes. If Lindsey had his way, Wal-Mart, rather than lose sales, could just loan out money to keep its customers shopping, effectively turning the big-box chain into an old-style company store to which Americans can owe their souls.

If this kind of crisis opportunism feels familiar, it’s because it is...

Do the free-market policies packaged as emergency cures actually fix the crises at hand? For the ideologues involved, that has mattered little. What matters is that, as a political tactic, disaster capitalism works. It was the late free-market economist Milton Friedman, writing in the preface to the 1982 reissue of his manifesto, “Capitalism and Freedom,” who articulated the strategy most succinctly. “Only a crisis — actual or perceived — produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable.”

A decade later, John Williamson, a key advisor to the International Monetary Fund and the World Bank (and who coined the phrase “the Washington consensus”), went even further. He asked a conference of top-level policymakers “whether it could conceivably make sense to think of deliberately provoking a crisis so as to remove the political logjam to reform.”

Again and again, the Bush administration has seized on crises to break logjams blocking the more radical pieces of its economic agenda. First, a recession provided the excuse for sweeping tax cuts. Next, the “war on terror” ushered in an era of unprecedented military and homeland security privatization. After Hurricane Katrina, the administration handed out tax holidays, rolled back labor standards, closed public housing projects and helped turn New Orleans into a laboratory for charter schools — all in the name of disaster “reconstruction.”

Given this track record, Washington lobbyists had every reason to believe that the current recession fears would provoke a new round of corporate gift-giving. Yet it seems that the public is getting wise to the tactics of disaster capitalism. Sure, the proposed $150-billion economic stimulus package is little more than a dressed-up tax cut, including a new batch of “incentives” to business. But the Democrats nixed the more ambitious GOP attempt to leverage the crisis to lock in the Bush tax cuts and go after Social Security. For the time being, it seems that a crisis created by a dogged refusal to regulate markets will not be “fixed” by giving Wall Street more public money with which to gamble.

...The problem is not a lack of ideas “alive and available” — to borrow Friedman’s phrase. There are plenty available, from single-payer healthcare to legislating a living wage. Hundreds of thousands of jobs can be created by rebuilding the ailing public infrastructure and making it more friendly to public transit and renewable energy. Need start-up funds? Close the loophole that lets billionaire hedge fund managers pay 15% capital gains instead of 35% income tax, and adopt a long-proposed tax on international currency trading. The bonus? A less volatile, crisis-prone market.

The way we respond to crises is always highly political, a lesson progressives appear to have forgotten. There’s a historical irony to that: Crises have ushered in some of America’s great progressive policies. Most notably, after the dramatic market failure of 1929, the left was ready and waiting with its ideas — full employment, huge public works, mass union drives. The Social Security system that Moody’s is so eager to dismantle was a direct response to the Depression.

Every crisis is an opportunity; someone will exploit it. The question we face is this: Will the current turmoil become an excuse to transfer yet more public wealth into private hands, to wipe out the last vestiges of the welfare state, all in the name of economic growth? Or will this latest failure of unfettered markets be the catalyst that is needed to revive a spirit of public interest, to get serious about the pressing crises of our time, from gaping inequality to global warming to failing infrastructure?

The disaster capitalists have held the reins for three decades. The time has come, once again, for disaster populism.

Not if the Company runs the $election.