We live in tumultuous times. The multiple crises that afflict the globe - climate change, financial meltdown, food and water shortages, terrorism and so forth - have become consuming anxieties in many countries.
In the rich west the current financial crisis has become a tortured existential moratorium on the volatile and ethically troubled capitalist system, and the likely effects of demand contraction, rising unemployment and declining economic growth. There is talk in some quarters of a “post neo-liberal” era marked by a return to greater government (neo-Keynsian) intervention in the affairs of the nation.
Others are looking to alternative systems of economic and political engagement based on principles of social justice and human rights. Others still are looking to localism, sovereignty, self determination and community empowerment as ways of countering the ravages of rapacious capitalism.
The collapse of the international financial markets, triggered by the implosion of the US subprime market, has demonstrated with startling clarity how interconnected the global system has become and how easily unregulated financial capital can lead to catastrophe.
If Naomi Klein is right about the machinations of “disaster capitalism”, then the current crisis has the potential to also be the harbinger of repressive policies aimed at shoring up the power of corporate elites while putting a repressive lid on civil dissent. We might also remember Naomi Wolf’s stark warnings about the potential slide into fascism (“fascism drift”) under such circumstances and the likelihood that the current crisis, accompanied by economic downturn and social instability, may usher in further erosions of civil liberties.
The US has already lost a million jobs this year, retail demand has all but collapsed, and the backbone of US manufacturing industry - the fabled car industry - is facing bankruptcy caused by managerial ineptitude and stratospheric overheads. Similar scenarios of actual and immanent despair are occluding in other western countries. Faced with all this, governments have already put climate change on the backburner and many social programs are under threat. At the very least, we can expect to see radical reconfigurations in government policies and spending programs across the globe.
Meanwhile, the blame game is in full swing. Fingers have been pointed, mea culpas announced, and defences and justifications mounted. But rather than rallying to the assistance of beleaguered mortgagees in the US and beyond, the US mandarins have decided to hand over the remainder of its bailout package to the very financial institutions that contributed to the current crisis. This has bemused and horrified millions of “ordinary American people” who look to government for protection from the vagaries of the so-called “free market”, the dubious virtues of which were extolled by George W. Bush at the recent APEC summit in Lima, Peru.
Of all the tortured public (“we screwed up”) confessions that have thus far emerged, none is more evocative than that of the former chairman of the United States Federal Reserve Board, Alan Greenspan. In his anguished submission to the Congressional Committee of Government Oversight and Reform on October 23, 2008, Greenspan observed:
We are in the midst of a once-in-a century credit tsunami. Central banks and governments are being required to take unprecedented measures.
The former financial maestro claimed he saw the crisis coming but not its current scale:
In 2005, I raised concerns that the protracted period of under pricing of risk, if history was any guide, would have dire consequences. This crisis, however, has turned out to be much broader than anything I could have imagined. It has morphed from one gripped by liquidity restraints to one in which fears of insolvency are now paramount.
In downplaying the human aspect of the crisis, its architects must search for technical explanations. Thus, Greenspan muses that:
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